https://newsletter.mw.creamermedia.com
Africa|Automotive|Coal|Energy|Engineering|Export|Freight|Infrastructure|Iron Ore|Logistics|Manufacturing|Multotec|Power|Projects|SACEEC|Solar|Steel|Water|Equipment|Manufacturing |Products|Infrastructure
Africa|Automotive|Coal|Energy|Engineering|Export|Freight|Infrastructure|Iron Ore|Logistics|Manufacturing|Multotec|Power|Projects|SACEEC|Solar|Steel|Water|Equipment|Manufacturing |Products|Infrastructure
africa|automotive|coal|energy|engineering|export|freight|infrastructure|iron-ore|logistics|manufacturing|multotec|power|projects|saceec|solar|steel|water|equipment|manufacturing-industry-term|products|infrastructure

Small manufacturer support crucial to navigating South Africa’s difficulties

Small manufacturer support crucial to navigating South Africa’s difficulties

11th May 2023

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

Font size: - +

The inability to effectively reduce the crime rate, coupled with government interference in the manufacturing sector, slow economic growth, infrastructure deficiencies, and rising steel prices, inflation and interest rates, create a daunting landscape for South Africa’s local manufacturing sector.

In addition to these challenges, the sector – and the nation in its entirety – continues to struggle with the detrimental impact of loadshedding which is costing the country an estimated R900-million a day per stage of power outages. Strained water infrastructure and a 35.6% unemployment rate add to the difficulties.

Another pressing concern is the country’s excessive importation of goods, amounting to about $759-billion or R14-trillion a year, South Africa Capital Equipment Export Council (SACEEC) CEO Eric Bruggeman has highlighted, adding that this led to a trade deficit of about R710-billion a year.

The lack of beneficiation of vital exports such as coal, iron-ore, ferrous alloys, manganese, and the state of the automotive industry, further exacerbate the challenges.

As such, supporting the efforts of about 10 000 small manufacturers, employing anywhere between 5 and 150 individuals, is “crucial in navigating these difficulties”.

Manufacturing Circle executive director Philippa Rodseth, who participated in a webinar panel facilitated by Bruggeman this week, highlighted that the organisation’s primary mandate was to “find overseas markets and support members who aim to export globally”.

However, she bemoaned the lagging contribution of manufacturers to the domestic economy, noting that one of the main challenges they faced was the “continued lack of demand for their products”, which Rodseth said was “directly tied to gross domestic product growth”.

During Creamer Media’s local manufacturing-focused webinar on May 10, Rodseth emphasised that “addressing this demand issue is crucial for improving the performance of South African manufacturing”.

The Manufacturing Circle, in particular, is therefore actively participating in identifying local opportunities for demand generation, which includes initiatives like the Steel Master Plan and implementation projects aimed at driving demand, “not only for steel but also for the entire value chain”.

The organisation’s focus, she added, was on identifying projects in areas such as public procurement, infrastructure and private sector demand.

“By keeping a close eye on these projects, we can ensure manufacturers are well-positioned to take advantage of the opportunities they present.”

However, while local demand remained a challenge, Rodseth recognised the importance of export-led growth for manufacturers.

“We understand that exporting is a pathway to competitiveness despite the existing challenges. To foster export growth, we aim to learn from successful exporting companies and leverage their expertise. By identifying key projects and expanding the value chain, we can create additional opportunities for smaller companies to contribute to the export market,” she said.

Nevertheless, metallurgy and process engineering company Multotec CEO Thomas Holtz added that, in the face of these challenges, “resilience and adaptability are essential for operating in Africa”.

Considering that market entry barriers were high, he emphasized the importance of “operating ethically and honestly”.

Additionally, preparing as much as possible for the market being accessed is crucial to success, and can be done through, for example, investing in alternative energy sources, such as solar plants, to help mitigate the impact of power outages, both in countries such as South Africa, and others where there is not a stable power supply available.

“Despite obstacles such as freight costs and logistics issues, some manufacturers have managed to export a significant portion of their products, demonstrating resourcefulness and agility,” Holtz said, referencing Multotec’s success in being able to expand outside of South Africa’s borders.

He added, however, that “uncertainty in the global market is not exclusive to South Africa or Africa, but it's a shared reality worldwide”.

He suggested that “learning through experience and overcoming obstacles is necessary to succeed in exporting”.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

BOVA Safety Wear
BOVA Safety Wear

BOVA cemented their reputation in Africa by delivering high quality engineering through their range of safety footwear. 21 years after producing...

VISIT SHOWROOM 
SMS group
SMS group

At SMS group, we have made it our mission to create a carbon-neutral and sustainable metals industry.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

MMC, Pan African, Vanadium Resources make headlines
MMC, Pan African, Vanadium Resources make headlines
4th October 2024
Magazine round up | 04 October 2024
Magazine round up | 04 October 2024
4th October 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.136 0.213s - 127pq - 2rq
Subscribe Now