The Department of Trade and Industry (dti) is working on introducing a dedicated incentive aimed at attracting investment into agro-processing industries, says the Minister, Rob Davies.

“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 conditionalities, including with respect to labour practices and empowerment,” Davies adds.

The Minister was addressing the Manufacturing Indaba (gathering) in Western Cape Province on Tuesday. The indaba brought together the country’s industrial movers and shakers with the intent of focusing on and boosting the growth potential of key industry sectors, including automotive, construction, forestry and paper and packaging, among others.

The Minister said the manufacturing sector and diversification of the economy was a key driver to attaining South Africa’s economic growth objectives.

“We all know that the performance of our economy has been flat, but we were saved by the second-quarter gross domestic product (GDP) 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.

He added that the largest parts of international trade were mainly focused on intermediate products. “By the early 2000s, domestic boat-building capabilities had hollowed out, with the exception of the luxury yachting sector,” he noted.

“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 (a shipbuilder and maritime services provider) which is now part of the Paramount group of companies, and Damen are testament to what can be achieved, Davies said, adding that efforts had also gone into the clothing and textile clusters in the last decade in the Cape region.

“The national government has deployed significant incentives to support, among others, companies in this sector in the province. We have injected R2 billion incentives over the last five years to support the industry and successfully raise productivity and competitiveness,” said Davies.


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