If South Africa is to have a sustainable and economically viable green industries future, energy-intensive industries need to ensure that they do not harm the environment, by using methods, strategies and tools that aim to decouple economic growth from increased resource use and aggravated environmental impacts.

This was according to National Cleaner Production Centre of South Africa (NCPC-SA) national operations manager Reuben Kadalie, who discussed a model for increased profitability through greener production at the Clean Business Ekurhuleni conference, in Johannesburg, last month.

He highlighted, that to reduce their negative impact on the environment, industries needed to reduce their use of water, energy and materials, as well as the generation of waste and pollution through resource-efficient and cleaner production (RECP). This, in turn, addressed economic, environmental and social sustainability dimensions that focused on production efficiency, environmental management and human development respectively.

“Sustainable practices must be undertaken and industries have to meet present needs without compromising future needs. This means continuing and discontinuing many things currently being done and doing some things differently. We need to ensure that quality of life is sustained,” Kadalie stated.

He said the desired impact areas through RECP were competitive manufacturing industries, company bottom-line returns, resource-efficient and productive companies that contributed to a low carbon economy, business growth, sustainability, market access and job retention or creation.

It was important for businesses to be efficient and responsive to the markets they were operating in through repositioning or reinventing themselves to meet global competition, noted Kadalie.

He added that globalisation had resulted in the development of global commodity or value chains.

These value chains were either buyer- or producer-driven; however, most manufacturing supply chains were buyer-driven and particularly suited to global production networks, as most products could be exported at each stage of the chain.

“In terms of the global buyer-driven value chains, buyers have become more demanding. They require lower prices, better-quality products or services, shorter lead times, smaller minimum quantities and more flexibility. There is also immense pressure on manufacturing and the key driver of competitiveness is production costs,” Kadalie explained.

Further, he said that, in terms of the global move of manufacturing to developing countries, the global view was that high-wage, developed economies should be committed to high value-added, capital-intensive production, while low-wage, developing economies should be committed to low-value, labour-intensive production.

In this way, developing countries had a comparative advantage in labour-intensive production of manufacturing.

Kadalie noted that, in South Africa, manufacturing companies lost thousands of jobs each year. They also faced price pressures, buyer power, changing consumer behaviour and illegal imports that contributed to challenges in the sector.

Abnormally low investment in technologies and a large number of small suppliers, as a result of a lack of employment in the formal sector and outsourcing, also added to the challenges in the sector.

He stated that manufacturing could be complex, as manufacturers were involved from the marketing to the distribution of their product. The sector needed critical expertise in many areas, including sourcing, designing, procurement and planning.

Kadalie also added that the sector needed resource efficiency and productivity in many areas to achieve profitability.

Resource consumption in energy, materials and water was a major component of costs and was often neglected, he believed.

Green Industry Development

NCPC-SA director Nduvhuho Raphulu stated at the conference that South Africa’s Industrial Policy Action Plan (Ipap) highlighted the need to create a platform for environmental opportunities for industries to become more efficient and competitive.

One action taken by government was to develop a green industry that would become a vehicle through which industries would find it easier to comply with environmental-management acts, policies and regulatory frameworks.

In 2011, the NCPC-SA was transferred to the Department of Trade and Industry’s (DTI’s) Green Industry and Energy Efficiency unit, in line with the strategic focus of the Ipap.

The NCPC-SA is also a resource efficiency programme of the DTI.

The role of the unit is to leverage the green industry initiatives to upgrade and enhance the competitiveness of South African industry.

Raphulu said the unit’s objective included designing and implementing policies, strategies and programmes to develop manufacturing and related sectors of the green economy, contributing to the creation of 400 000 direct and indirect jobs, increasing value-add and transformation and improving competitiveness in domestic and export markets.

Its focus areas are renewable and nuclear energy, RECP, waste management and recycling, water and wastewater industries and industrial climate-change response measures.

“The enablers of a green economy are a regulatory framework and market-based instruments, such as the NCPC-SA; innovation, science, technology, greater localisation and manufacturing; as well as investment and finance opportunities,” Raphulu stated, adding that the availability of skills, partnerships, institutional capabilities and capacity were also needed for a green economy.

NCPC-SA’s mandate is to use resource-efficient, cleaner-production methods that target energy, water, materials efficiency and waste management.

It aims to improve industrial competitiveness, support the Ipap focus areas and promote the adoption of environmentally-sound business practices.