While there are challenges in the manufacturing sector, other parts of it show steady growth, says Trade and Industry Minister, Dr Rob Davies.
“Looking at the holistic performance of the manufacturing sector, divided into sub-sectors, many other parts of manufacturing continue on a steady growth,” said Minister Davies.
The Minister was addressing the Austrian Business Chamber on the manufacturing situation. The Minister said that it is important to persevere and find ways to mitigate challenges in the sector.
South Africa, he said, is not the only country that has been hit by an income drop in the mineral commodities sector. Other countries that are producers and exporters of minerals, like Australia and Canada were also experiencing the same, due to the sharp drop in commodity prices.
He highlighted that South Africa, through the Industrial Policy Action Plan (IPAP) had paved a way and provided direction in terms of where it needed to go to achieve industrialisation.
Minister Davies added that the country had come out better off during the global economic crisis with the IPAP, which was introduced in 2009, than it would have without it.
“Our ability to be significant manufacturers is highlighted in the example, amongst others of a BMW plant in South Africa being named the best manufacturer of certain automotive models in the world. In a similar vein, the Hisense television manufacturing plant in the Western Cape, is, after China, the second best performing manufacturing plant of its kind in the World,” explained Minister Davies.
Davies cited examples of the textile industry which, he said, was rapidly declining and many negative commentators predicting that the sector, despite the job growth potential, should be allowed to die.
“We changed our incentive schemes and many companies took them up. We brought in retailers like Foschini who created 6,000 jobs in a sector that was said to be doomed,” he added.
Minister Davies said when the manufacturing industry is faced with a situation where it is taking a beating, it could either, sit and hope that things would get better, or it could develop things that would revitalise it.
He added that there were many overseas’ companies that displayed very strong faith in the South African economy and were willing to invest. He also encouraged the Austrian Business Chamber to engage with the Department of Trade and Industry (the DTI) with regards to matters relating to investments. The Austrian Business Chamber represents and supports the interests of Austrian businesses in South Africa as well as the general South African business sector with Austrian ties.