As the local manufacturing sector has been declining steadily over the past 15 years, industrial packaging solutions company PackSolve is exploring opportunities in the international market to grow its business.
“With South Africa’s economy growing at a near zero rate, it is impossible to grow businesses organically on home soil. The lack of foreign direct investment, owing to policy uncertainty – besides other factors – has pushed businesses to look for other growth avenues on foreign ground,” says PackSolve CEO Alex Baisch.
For the company to establish an organic business growth of about 8% locally, the South African economy would need to grow at about 3.5%, he tells Engineering News. “As this is not happening, we are also looking to move into mergers and acquisitions as another growth strategy.”
With several large industrial projects expected to start in Mozambique, the company has earmarked the country as its first potential market.
Meanwhile, with the advent of the Fourth Industrial Revolution (4IR), Baisch says that the manufacturing sector can use skills and technology to tap into the 4IR to develop sustainable businesses in Africa.
He comments that, as the manufacturing sector remains one of the largest contributors to gross domestic product, companies should find a balance between the implementation of 4IR and keeping South Africans employed.
“We realise that employment is key to the growth of the country. However, the labour conditions in the country are dire. We are at a very crucial stage in the local manufacturing sector regarding cost-effective labour and its ability to make companies internationally competitive.”
The company is aiming to implement various 4IR platforms, such as Big Data and the Internet of Things, to ensure that it is more efficient.
Baisch points out that, although this is crucial, it will not be done to the detriment of its employees.
PackSolve operates in a niche sector, servicing the engineering, power generation, steel and heavy manufacturing industries.
While it is positive that government regards manufacturing as one of the key drivers of economic growth, government needs to accelerate the traction that manufacturing requires, he concludes.