Vying for a piece of the shine

South Africa’s gems and precious metals exports reached a whopping $14.6-billion last year alone. This was a total of 17.9% and highest of all export products in the country, followed by vehicles at $9.2-billion (11.3%), and ores, slag and ash at $8.6-billion (10.5%).

Yet, the country remains a small player when it comes to the lucrative game of polishing and cutting these materials is concerned. The big guns in the game are Israel, India and Belgium.

In fact South Africa even lags behind smaller neighbour Botswana, which has a thriving diamond cutting and polishing market, driven by a partnership with mining giant De Beers.

“It is unfair that we are such a small player in our industries,” says Seipati Mangadi, chief executive of the Gauteng Growth and Development Agency’s [GGDA] Gauteng Industrial Development Zone [GIDZ].

The GIDZ’s mission is to “identify, design and enable focused manufacturing and beneficiation programmes that will increase industrialisation and manufacturing capability in targeted, exportdriven sectors in the region, whilst stimulating skills development, promoting job creation and investment opportunities through public and private partnerships and diversifying the province’s economy”.

One of the GIDZ’s flagship projects is the R267-million Jewellery Manufacturing Precinct (JMP) located strategically at the OR Tambo International Airport in Kempton Park, Johannesburg. Mangadi says the precinct will also perform supporting services that include trading, testing and certification and banking services.

She says that the GIDZ’s mandate is to develop and drive the provincial government’s re-industrialisation programme: “We are not in the business of running industries.” The GIDZ framework seeks to target local and foreign direct investment, drive group strategy in industries such as mining and diversify the export of goods. They also have the demanding task of attracting local and foreign direct investment.

According to the business website Insider Monkey, “130 000 000 carats of diamonds are mined annually, with a total value of nearly $9-billion. After they are mined, they can be used for industrial or gemstone purposes.”

Many of the diamonds headed to Botswana for polishing are actually flown from OR Tambo International Airport, which is right on the doorstep of the JMP.

Mangadi says they are working on strategies to change the status quo and move from being observers to players. She says they are looking at engaging countries in the SADC region and elsewhere on the continent, Europe and even India to see how Gauteng can become a serious player in the industry.

The JMP’s focus is on jewellery manufacturing. This includes the cutting, polishing and finishing of precious stones and support services, including logistics, insurance, finance and licensing.

Mangadi says the JMP’s programmes will help drive the GIDZ to drive inclusive, exportdriven economic growth. She says although the first phase of the project is aimed at the jewellery manufacturing sector, the GGDA plans to rope in other industries to help create jobs and produce entrepreneurs.

Initially, there was concern that very few students from the sector were making it into the JMP project. “There are many institutions that offer courses in jewellery studies. Now we were wondering, where do they [graduates] go after qualifying?” asks Mangadi.

Many still find it hard to make it in this rather exclusive sector, which for many years was the sole preserve of the rich — entry into the market and becoming a serious role player required the financial backing that many previously disadvantaged players did not have.

Efforts were made to find and recruit prospective students for training in the JMP. Some had given up on ever following a career in the world of precious stones and had been working in hair salons and other small business sectors just to survive.

But Mangadi is happy with the progress made by the JMP. Some of its students have already produced impressive works, which are now being sold on the market, and another intake is already undergoing the rigorous training regime. The JMP takes up to 15 students a year but is looking to increase the number. Mangadi says the good news is that despite the tough global economic times, the jewellery sector “has not only weathered the storm, but it has thrived”. This in turn, means the sector could well become the shining jewel required to brighten up Gauteng and in turn, the South African economy.

But it’s not been all plain sailing in luring investors to embrace the GIDZ. Mangadi says the uncertainty created by global economic issues — such as Brexit and Donald Trump’s shock victory in the US elections — results in very slow processes among prospective investors. Mangadi says they become more hesitant and tend to hold back, adopting a wait-andsee attitude that still needs to be overcome.