State-owned Transnet, the National Association of Automotive Component and Allied Manufacturers (NAACAM) and the National Empowerment Fund (NEF) will partner to boost localisation, domestic manufacturing capabilities and support areas core to Transnet’s business.
The five-year partnership will see the parties contribute towards a R224-million programme that is expected to contribute to the resurgence of local manufacturing and reduce logistics costs.
Transnet’s partnership with NAACAM, through enterprise and supplier development, aims to develop local manufacturing capacity and capability in the core business of Transnet. This is aimed at increasing local content and reducing the current over-reliance on imports.
According to Transnet group CE Portia Derby, the national logistics provider has a major role to play in enabling the growth and competitiveness of the South African economy by pursuing a domestic manufacturing agenda and supporting its relevant business units.
A historic lack of investment in logistics infrastructure has had a significantly negative impact on local industry, resulting in the loss of scale and a decrease in manufacturing industry capabilities, reads a joint statement issued on behalf of the three parties.
NAACAM executive director Renai Moothilal states that the organisation has experience in implementing programmes aimed at using localisation and supplier development as a tool for increasing domestic competitiveness especially in original-equipment-manufacturer-driven value chains. “There are learnings out of the automotive sector that can benefit the Transnet logistics sector.”
To provide the necessary financial support to the participating enterprises, Transnet has also partnered with the NEF through a 50:50 matching principle which will enable the beneficiaries to have access to an additional source of funding, while empowering them in line with Transnet’s core operations.
“In the NEF, Transnet is assured of an institution that has distinguished itself as a catalyst across the key sectors of the economy, driving the economic empowerment of black enterprises, women, youth, township and rural communities,” says NEF CEO Philisiwe Mthethwa.
She adds that, with the NEF’s other enterprise and supplier development alliances, this partnership with Transnet will hinge on pursuing localisation and industrialisation through mentorship support, skills advancement, incubation and entrepreneurship training, job creation and financial management integrity for inclusive growth.
Mthethwa says the NEF-Transnet small, medium-sized and microenterprises fund, operating under the administration of the NEF, will focus on the transformation of Transnet’s value chain, while “positively impacting” the communities in which Transnet operations are located.
Qualifying companies will be selected in a “fair and transparent manner”, in line with Transnet’s approved enterprise and supplier development policy, the parties note in a joint statement.