Manufacturing and export key to growth

The weak rand can work in our favour, says the government

BOOSTING the manufacturing sector demands a collaborative effort by government, business and labour, particularly given the likelihood of zero growth this year.

This was the overriding message from the national and provincial government during the Manufacturing Indaba in Durban this week.

Department of trade and industry chief director Nigel Gwynne-Evans and KwaZulu-Natal economic development MEC Sihle Zikalala urged the private sector and government to work closely to stimulate manufacturing.

Zikalala said manufacturing had the biggest potential to create jobs in the current “trying economic times”.

The provincial contribution to gross domestic product (GDP) has declined in real terms from 19 percent in 1993 to 17 percent in 2012 and was now only 15 percent.

Among the province’s leading manufacturers recognised globally for their economic contribution were Unilever, Tongaat Hulett, Mondi, Sappi, Toyota, Bell Equipment, Sumitomo Rubber Industries, BHP Billiton and Defy.

Gauteng, KwaZulu-Natal and the Western Cape contributed more than 60 percent to South Africa’s value-added production.

Zikalala said the government was developing measures to stimulate the manufacturing sector, including establishing industrial economic hubs and special economic zones.

The province was also finalising measures for manufacturers looking to locate in the industrial economic hubs beyond the national incentives.

Support

This included competitive rentals, infrastructure, adequate supply and standardised rates for water and electricity, serviced industrial land and funding.

National support initiatives include the manufacturing competitiveness enhancement programme, manufacturing investment programme and the capital expenditure incentive.

Gwynne-Evans said the government recently released the updated Industrial Policy Action Plan (Ipap) to overcome lingering structural obstacles to development and industrialisation.

Ipap this year focuses on stabilising the electricity supply and creating an enabling environment for own or co-generation, improving the port and rail network to overcome inefficiencies and to encourage exports and address skills deficits.

The focus is on procurement, labour-intensive sectors,