The programme is broken into two components and is closely aligned with government’s increasing demand for localisation when awarding infrastructure contracts.
General Electric (GE) SA is set to invest R500 million to create an engineering and development-focused Customer Innovation Centre (CIC) that is geared towards critical skills development through innovation and technology transfer and a further R200 million investment in a supplier-development vehicle to provide technical, funding and business support to small and medium-sized enterprises (SMEs).
Tim Schweikert, GE SA President and CEO, said the investment was ultimately aimed at incorporating local approaches and innovation developed by South Africans into GE’s global product pipeline.
“The CIC will leverage South African talent to provide meaningful and dynamic solutions to this region and the world. It will become a technical resource centre and hub for suppliers and customers across GE’s business entities, as well as for the industry,” Schweikert said in a statement released recently.
The investment is also set to create jobs for around 100 technical professionals and engineers. Preference will be given to black graduates and graduates from rural areas who hold an engineering degree or the equivalent from a Further Education and Training college.
An additional R200 million has been earmarked to bolster black-owned small to medium sized enterprises’ (SME) capacity through funding, business and technical development services.
The end goal is for these SMEs to be absorbed into GE’s supply value chain to local and international multinational corporations.
Small business owners will be exposed to business development services that focus on sharpening their business acumen, operational and management skills, while the technical development services will include engineering and problem-solving support and technology transfer.
Schweikert said a possible incubation scheme for black-owned SMEs was also being considered.
GE Africa president and CEO Jay Ireland said the schemes formed part of a larger R5 billion-worth of investments that the group was making across Africa, which he described as the “final growth frontier”.
GE Africa president and CEO Jay Ireland
Ireland said the intention was to foster in-country innovation and position South African enterprises to supply into GE, as well as other global supply chains. Globally eight jobs were generated in the GE supply chain for every one created internally, but the African ratio was still one-to-one, owing to inadequate skills and supply-side capacity.
He said GE’s relationship with Transnet Engineering was showing promise, with the Koedoespoort facility not only assembling locomotives for Transnet Freight Rail (TFR), but now also for other African customers. The partnership had received orders for nearly 100 locomotives mostly for Mozambique.
“By creating new developing black industrialists, this initiative will grow existing and new businesses and provide products and services that are currently unavailable in the region, which will, in turn create long-term sustainability and economic growth,” he said.
In the first phase, eight black-owned industrial companies would be identified to supply components and services to GE as it delivered on a R7.1 billion order from TFR for 233 diesel locomotives. The order formed part of a larger R50 billion TFR order for 1 064 electric and diesel locomotives, which had been split between four suppliers.
Newly appointed Minister for Small Business Development Lindiwe Zulu applauded the investment and its potential to “unlock economic opportunities” that could drive inclusive economic growth and sustainable employment.
“Together, we must ensure that small entrepreneurs have abundant opportunities to grow and develop their enterprises in an environment that nurtures the development of these enterprises and enhances their job creation potential,” she said.