Minister Rob Davies on manufacturing and diversification of economy

Manufacturing and diversification of economy is key driver to attaining economic growth - Minister of Trade and Industry, Dr Rob Davies

The Minister of Trade and Industry, Dr Rob Davies says that the manufacturing sector and diversification of the economy is a key driver to attaining South Africa's economic growth objectives. Davies was speaking at a two-day Manufacturing Indaba Western Cape that is currently underway at the Cape Town International Convention Centre.

"We all know that the performance of our economy has been flat, but we were saved by the second-quarter Gross Domestic Product manufacturing statistics. That was mainly through the implementation of a transparent localisation policy that we have developed and this result also demonstrates that manufacturing and diversification of our economy is highly critical if we are to achieve our economic strategic objectives," said Davies.

Davies stressed also that largest parts of international trade were mainly focussed in the intermediate products. It is in this aspect where achievements have been realised mainly because of the unorthodox deployment of financial tools.

"By the early 2000's, domestic boatbuilding capabilities had hollowed out -with the exception of the luxury yachting sector. Government introduced a stronger industrial financing instrument and boats were designated for local procurement. The sector is now witnessing the crowding-in of private sector funding and capabilities to meet demand both locally and internationally. The success of Nautic Africa, now part of the Paramount group and Damen are testament to what can be achieved. A lot of effort has also gone into the clothing and textile clusters in the last decade in the Cape. The national government has deployed significant incentives to support, amongst others, companies in this sector in the province. We have injected R2billion incentives over the last 5 years to support the industry and successfully raising productivity and competitiveness," said Davies.

Davies also announced that the Department of Trade and Industry (the dti) was working on creating a dedicated agro-processing incentive to attract investment.

"This sector is critical because of its labour intensity across the value chain and its high economic multipliers especially with respect to exports. The incentive will contain strong conditionality's; including with respect to labour practices and empowerment. In this latter case it is imperative that the Western Cape embraces the effort to ensure that economic activity and economic growth is inclusive," he said.

The MEC responsible for Economic Development and Tourism in the Western Cape, Mr Alan Winde said that the conference focussed specifically on agro-processing and oil and gas as they had demonstrated themselves to be key drivers that promote manufacturing.

"We have given ourselves a target of enabling 60 000 jobs in oil and gas at Saldanha Bay Industrial Development Zone. We are also doing work on skills, energy and for the removing of administrative red tape that hampers the flow of business," said Winde.

Winde added that the Western Cape had set itself a target of producing 32 500 apprentices in the next three-years to work in the energy space and pleaded with delegates to make use of the unit established in his office to remove red tape.

The Manufacturing Indaba is an annual event which brings together the country's industrial movers and shakers with an intent of focussing-on and boosting the growth potential of key industry sectors, namely: automotive, construction, metals, forestry, paper and packaging, chemicals, aerospace & defence, industry and products and services, and also provides a platform for informative and interactive sessions with the prime movers of the nation's manufacturing sectors.

Source: Government of South Africa.

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