Industrial transformation

Written by Amukelani Chauke

An increased focus on local procurement and funding for prospective black industrialists is helping the Department of Trade and Industry transform the industrial sector.

“About 50 applications have already been received and are being considered by the department, covering sectors such as agro-processing, chemicals, cosmetics, pharmaceuticals, mineral beneficiating sectors, oil and gas, automotive, rail, clothing and textiles, green energy, capital equipment, and information and communications technology,” said Minister Rob Davies when tabling his department’s Budget Vote in Parliament recently.

“We are grateful for the many messages of support we are receiving from the private sector and – increasingly – firm offers to collaborate and partner with government to make the Black Industrialist Programme a success,” he said.

The Minister said the need to radically transform the economy makes government’s Black Industrialist Programme a very important initiative.

“We are harnessing the resources – both on the supply and the demand-side – across government and its agencies to support black industrialists who have the potential to grow, invest and create jobs.”

In the coming year, the department will focus on supporting qualifying black industrialists through access to funding, incentives, soft loans, market access, procurement opportunities, training and capacity building, matchmaking and information sharing, research and innovation, assistance to meet quality standards, productivity enhancement support, and economic infrastructure.

He said the support will be provided through collaboration with Developmental Finance Institutions, state-owned companies, the Council for Scientific and Industrial Research (CSIR), the South African Bureau of Standards (SABS) and other private and public institutions.

“The days when we had to walk into the forest in search for firewood are a thing of the past”

Meanwhile, the Minister said government’s Industrial Policy Action Plan has led to many industries consuming local goods and boosting several industries.

The department has identified more than 16 sectors or products, ranging from rail rolling stock, work wear and uniforms, and furniture, to benefit from mandatory local procurement.

“I have visited many of these factories in the past year and can report that these government contracts have created a mood of optimism on the shopfloors and factories.

“Industries that appeared to have no future and where assets were being run-down prior to being sold for scrap have been revitalised and long-term investments – including in machinery, people and skills – are being made, which augur well for these industries’ future,” he said, adding that interventions are supported by the department’s Clothing and Textile Competitiveness Improvement Programme.

He said after setting a 100 percent local content requirement in clothing, textiles, leather and footwear, the department has seen the re-introduction of products where local production had been discontinued.

“These include technical fabrics, protective footwear, protective fabrics and chambray fabrics.

“The value of public procurement of locally produced clothing and textile products recorded by National Treasury increased from R264 million in 2013/14 to R479 million in 2015/16 – an increase of 82 percent.”