South Africa committed to supporting manufacturing

14 November 2014

The manufacturing sector is seen as a key driver for inclusive growth, job creation and poverty alleviation, but it has been in decline for the past three decades. This has prompted South Africa to commit resources to building and supporting it.

Trade and Industry Minister Rob Davies pointed out that the demise of South Africa’s tool, die and mould making (TDM) sector over the last 30 years had resulted in a loss of more than 80% of the country’s manufacturing capacity.

Following the decline of the sector, a partnership was set up between the Department of Trade and Industry and the Toolmaking Association of South Africa, which gave rise to a multi-stakeholder intervention known as the National Tooling Initiative (NTI). “The NTI, as a rehabilitation strategy, aims to address production and technology challenges, skills deficit and transformation in the sector,” Davies said.

On average, he estimated, the South African economy used more than R15-billion a year of TDM equipment and maintenance services, of which only 20% was provided by the local industry. This not only had an adverse effect on the balance of payments, but resulted in significant loss of technical and engineering skills and maintenance support. Given the centrality of the TDM sector, the broader manufacturing sector’s competitiveness had also been negatively affected.

The shortage of toolmakers also poses a serious challenge to achieving the goals set out in the Industrial Policy Action Plan (Ipap). The overriding goal of Ipap is to prevent industrial decline and support the growth and diversification of South Africa’s manufacturing sector. “Current toolmakers in South Africa are ageing (with an average age of 55 years) and the number of properly trained toolmakers produced per year remains very low in comparison, resulting in a continuing shortage of toolmakers in a variety of manufacturing sectors,” Davies stressed.

His department understood the importance of the TDM sector to the economy and to date had supported the NTI with over R260-million, of which R9-million had been used to equip the Tooling Centre of Excellence, set up at the South African Nuclear Energy Corporation. Supplementary funds would be earmarked in an effort to develop a state-of-the-art facility. “This investment is necessary and will assist South Africa in reversing the skills deficit, close the age gap and contribute to regaining the manufacturing competitiveness.”

Davies was speaking at the launch of the centre, on 10 November. NTI chief executive Dirk van Dyk added that the initiative needed industry participation for the programme to succeed. Under the programme’s skills development pilot phase, 1 600 students were being trained at further education and training colleges and centres of excellence. Also, more than 200 manufacturing companies had so far provided on-the-job training for the students.

The NTI was set up with the national objective of rehabilitating the South African TDM sector, so contributing to a strategic growth stimulator for manufacturing and technical skills development. Developed as a national, multi-stakeholder initiative, it is structured as a public private partnership. This allows the government and the industry to co-operate in the large scale intervention that is required to rehabilitate the TDM sector.

It has five driving programmes: skills and expertise development; capacity expansion, small, medium and micro enterprise and broad-based black economic empowerment structuring; technology recapitalisation; competitiveness improvement and export development; and public private partnership governance structure development.

Stakeholders take part in and contribute to these programmes on regional and national levels through capacitated legal structures and forums.

SAinfo reporter and SANews.gov