The Minister of Trade and Industry, Dr Rob Davies, has launched the 10th iteration of the Industrial Policy Action Plan. IPAP is the dti’s vision for the industrial development of South Africa.
Despite a challenging few years for manufacturing, the IPAP 2018 has outlined programmes that have done well, with the automotive sector leading the pack. Other sectors it has supported have also made inroads.
Some of the key achievement / highlights mentioned in the iteration include:
Automotive exports have doubled over the past ten years, with the sector producing 600 000 vehicles a year and supporting 113 000 jobs. The sector contributes 33% to manufacturing gross domestic product (GDP) and about 6% to overall GDP.
Leading global vehicle manufacturers, such as Toyota, Volkswagen, BMW, Ford and Isuzu, have invested R45 billion into the industry, while the Department of Trade and Industry (dti) had developed its Automotive Masterplan 2020 as part of its effort to keep the sector competitive.
The department is also pleased about its steps to rebuild the tooling industry. Through its National Tooling Initiative, foundries and tool, die and mouldmaking companies have been assisted through various dti programmes, while 1 800 students have been trained.
Metal fabrication, capital and rail transport equipment
The National Foundry Technology Network (NFTN) umbrella: A total of 44 foundries have so far been assisted through the Competitive Improvement Initiatives (CII) Programme, with interventions ranging from baseline assessments to technology-transfer, lean manufacturing and energy management. 32 foundries were also assisted with technical and regulatory support interventions.
The rail localisation sector is getting back on track after a bumpy ride with tender rigging.
“There has been an enormous amount of leakages in this sector . . . tenders that have been the product of State capture and corruption. Procurement was for imported products instead of local chains. This is one of the issues we will be putting right,” said Davies.
The steel industry
In the steel industry, an agreement had been made with the primary steel producer on a set of principles for flat steel pricing in South Africa that would ensure both the competitiveness of steel-dependent industries and the sustainability of upstream steel mills. A steel development fund has also been established to protect downstream steelmakers.
Government’s response was based on its longer-term vision of an optimal ‘end state’ for steel: A viable, competitive and sustainable industry, balancing support as equitably as possible between the interests of both upstream and downstream players.
The first support measures put in place were 1) increasing the general rate of customs duty on primary steel products to 10%; 2) increasing the tariff on a range of downstream products; and 3) the deployment of various rebates. A Steel Development Fund of R1.5 billion was also established to support key downstream steel sectors and sub-sectors.
The mining industry
Davies said he hoped the mining equipment sector could develop a niche in export sectors, while the development of fuel cells is becoming a key platform for technology-intensive investment.