KZN manufacturing ready for blast-off

Huge investment, great logistics and conducive trading environment spell opportunity

KWAZULU-NATAL’S manufacturing sector could “take off” due to the benefits of President Cyril Ramaphosa’s targeted $100 billion (R1.39trln) investment drive, according to KZN Industrial Development Corporation (IDC) regional manager Pat Moodley.

He said the KZN manufacturing sector, the country’s second-biggest gross domestic product contributor after Gauteng, was well placed from a logistics point of view for importing and exporting.

The IDC said that currently the province’s focus on manufacturing was on the localisation of the automotive, clothing and footwear sectors.

“We see a lot of ‘buy South African’ initiatives, with the clothing retail sector tending to buy locally produced goods because of the exchange rate leading to high import costs. Also in developing countries, like India and China, the costs of production are no longer as cheap as they initially were. The cost of imports is also not as cheap as it used to be and, therefore, that gives an opportunity to South African companies to produce and sell locally.”

Moodley said the great opportunity for the KZN manufacturing sector was linked to several factors, including a conducive trading environment that could attract investments.

“The IDC could also be able to play a role in expanding it (manufacturing) with the foreign direct investment stimulating the economy and job creation. I am positive that KZN will be the forerunner in manufacturing. The KZN leadership is also ensuring we have a conducive province that is driven by investments,” said Moodley.

He said the IDC’S operations had done well in the province as the

IDC had managed to fund different projects, including projects in textiles, clothing, footwear, metals, chemicals, tourism, audio-visual and media sectors.

The IDC viewed manufacturing as a catalyst for development in the country, focusing on job creation and rural development.

“Our mandate is job creation. When we fund a project, our first consideration is its economic viability as it will have to be profitable and sustainable on its own,” said Moodley. “We also consider the social side of job creation, which is our target. By creating employment and growing the economy, the general status of the economy is lifted.”

The recent bouts of power load shedding due to problems at power utility Eskom would need to be addressed to assure investors that the province’s economy was going in the right direction, he said.

Moodley said the IDC’S loan book remained “fairly stable”.

“With the trading environment (being) tough, we encourage the entrepreneurs to be upfront with us so we can address challenges and ensure the continuity of the business.”