The South African Institute of Foundrymen (SAIF) was invited by the Parliamentary Committees Section: Portfolio Committee on Trade and Industry to provide input on the progress made in terms of the IPAP interventions related to the National Foundry Technology Network (NFTN), the impact thereof on the local foundry industry, and any challenges that may still affect the industry.
The NFTN has been an intervention and an example of government/industry co-operation to assist a vital but ailing foundry sector.
The meeting and presentations took place on Tuesday, 11 August 2015 in the Old Assembly Chamber, Ground Floor, Old Assembly Wing, Parliament, Cape Town. The SAIF was represented by CEO John Davies.
The Revised Industrial Policy Action Plan (IPAP) tabled in 2010/11 identified a number of sectors that have a high complementarity between investment and employment creation. Subsequent iterations of the IPAP continued to identify the potential of these sectors. The metal fabrication, capital and rail transport equipment sectors, including the foundry industry, have been identified in this regard. The IPAP set out to enhance competitiveness in the foundry industry, as this is one of the key drivers of the manufacturing sector’s overall competitiveness. The seventh iteration of IPAP 2015/16-2017/18 has been tabled in Parliament with the Minister of Trade and Industry briefing the committee on Tuesday, 4 August 2015.
In 2010, the committee had extensive public hearings on the revised IPAP, which included the metal fabrication, capital and rail transport equipment sector. This was followed up with annual engagements on IPAP. The committee has scheduled meetings to engage selected sectors to determine the impact of the interventions (or key action plans) that were identified within the IPAP on these sectors from the implementation of the revised IPAP in the 2010/11 financial year to date. These meetings would act as a follow-up to determine the effectiveness of the interventions identified within the IPAP in this regard.
The interventions related to the National Foundry Technology Network (NFTN) focused on:
• Rolling out the practical training programme in order to increase the competency of the foundry personnel
• Enrolling young foundry men/women in the New Foundry Generation Forum programme aimed at developing future managers and address the aging skills challenge in the sector
• Training workers on NQF 2-4 industry skills programme and in the advanced foundry technology course at University of Johannesburg
• Offering an apprenticeship programme at the foundry training centre at Ekurhuleni East College
• Piloting a learnership programme
• Conducting feasibility studies to establish training centres in Gauteng, Limpopo and KwaZulu-Natal and commissioning them with installed training equipment
• Recapitalising the training centres in Gauteng and the Western Cape
• Providing continuous technical support to foundries to reduce scrap rates and enhance productivity
• Implementing an on-going benchmarking programme for continuous improvements as well as profile and benchmark suppliers as part of the United Nations Industrial Development Organisation (UNIDO) Subcontracting and Partnership Exchange Programme (SPX)
• Rolling out Technology Assistance Packages to manufacturing companies successfully benchmarked in the foundry industry for participation in the Competitive Supplier Development Programme (CSDP) contracts
• Facilitating relevant research and development (R&D) to enhance technology, innovation and transfer
• Mentoring and developing emerging foundries through a two-year programme
• Aligning the Department of Science and Technology-Advanced Institutes for Tooling to national programme
• Completing technical benchmarks on permanent mould foundries and sand foundries
• Identifying and supporting new localisation and/or casting opportunities
• Assisting foundries under the competitiveness improvement programme
• Hosting the World Foundry Forum in South Africa
The committee expressed its interest to engage players in the foundry industry on the impact of these interventions.
“The dti, followed by NFTN and then SAIF/AFSA (Aluminium Federation of South Africa) made presentations, which overlapped slightly but emphasised the major issues facing the industry,” said John Davies.
“Inefficiencies in energy supply and not finding an alternative power supply was the probable cause of the contraction in the industry, which has continued to shed jobs since the 2008 economic downturn,” continued Davies.
“This outlook on the gloomy state of the industry was echoed by the NFTN, AFSA, the Toolmaking Association of SA (TASA) and the National Tooling Initiative of SA,” said Davies.
“Despite this the training programmes supported by the government, including the NFTN, the Department of Science and Technology, and the Manufacturing, Engineering and Related Services Seta had had a positive impact on addressing the skills shortage affecting the industry,” Davies told the committee.
“To date, 663 learners have attended courses and 25 diplomas have been presented to those who successfully completed at least six of the eight modules. Since 2013 customised in-house courses were completed at 17 different foundries and 44 advanced technical skills courses were held at the University of Johannesburg or at venues in KwaZulu-Natal, the Vaal and the Western Cape. Industry support for these courses has been increasing and achievement of the “diploma” has been established as a common goal,” explained Davies.
Davies has also called for more training in the sector because, despite the interventions, constraints persist.
Challenges facing the industry
“Other challenges facing the industry include import leakages which result in reduced orders and low competitiveness, rapidly rising energy costs and energy inefficiency, poor material conversion efficiency, the cost of compliance with environmental regulations, limited access to capital, cost, quality and availability of metal scrap and the perception that the foundry environment equals the three Ds – dark, dirty and dangerous.”
Scrap metal export debate
“There is also little understanding of the metal scrap export debate at Government level and it needs much more attention to find a suitable resolution to the current impasse.”
Localisation and designation programme
“All admitted that there are concerns over the implementation of the localisation and designation programme. My personal view of the level of “local content” at 60 to 70 % is actually too low to really drive manufacturing into an upward cycle, but we shall see. There are at present still too many imports and deemed local items to really get traction.”
“The process, however, was very professionally conducted, starting on time and finishing likewise. Every presentation was timed as were questions and answers. Talking, not even whispering was permitted by the chair. Very strict!”
“The chamber was the same as the one in which Verwoerd was assassinated, so it has a history. The buildings are well preserved and maintained, with everything looking “old” but in immaculate condition.”
“Whilst daunting at first, I found it a most interesting and respectful experience and it was a privilege to be in attendance!”