SA not just a cheap labour pool

April 18th, 2013, Published in Articles: EngineerIT

Dear Editor

For the electronics industry 2013 started well. New life has been breathed into the manufacturing sector in the Western Cape with the opening of a plant that is assembling fully knocked down kits from the Far East.

The deal was made possible by the tireless work of the Department of Trade and Industry and the Industrial Development Corporation who also brought to the party a fair portion of the required capital in the form of a loan and a grant.

However, while I’m applauding this development along with everyone else, I’m left with the feeling that I’m watching the party from the outside. As a citizen, I’m celebrating; as a businessman, I have an issue to raise.

My problem is this: The deal involves the assembly of fully knocked down kits brought in from overseas. All the hard work, partnering and investment has resulted in a second-rate deal for South Africa. The high-end components are manufactured elsewhere. We provide the labour to screw it all together.

We are capable of so much more than being a cheap labour pool for the rest of the world. So, the question is, what does this deal foreshadow? Is government marketing us as source of cheap skilled and semi-skilled labour, or do they have a plan of which this is just the first stage? Can we expect agreements in future to have an increasing percentage of the component manufacture take place in South Africa?

Commenting on government’s role in driving development and expansion, Rob Davies, the Minister of Trade and Industry said: “As government, we have to put in place measures to assist and to partner with industry, such as the requirement that the set-top boxes must have a local production element of at least 30%.”

The minister was referring to the digital terrestrial set-top boxes that all households will require when the switch from analogue to digital happens. The manufacture of 5-million STBs has been put out to tender. We have an established and maturing electronics manufacturing industry, should we be satisfied with a 30% local production element, especially over such a huge quantity?

We, in the manufacturing industry, must interrogate government and hold them to account. We must make sure that they are getting the best out of our BRICS membership and our dealings with foreign manufacturers. We are not anybody’s poor cousin and we cannot allow the rest of the world to gain the impression that we are nothing more than a labour pool. We need to derive full benefit from all the progress we have made since 1994 and to ensure that we don’t fall victim to those old inferiority complexes that took us so long to shake off.

Stephen Sher, Cirtech Electronics, Johannesburg

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