Stemming de-industrialisation to grow manufacturing output

November 3rd, 2014, Published in Articles: EngineerIT


South African manufacturers urgently need government to pursue solutions to enable the country to fulfill its manufacturing potential, Manufacturing Circle executive director Coenraad Bezuidenhout said at the Siemens Future of Manufacturing event.  

Siemens hosted the Future of South African Manufacturing thought leadership panel. (L-R)  Dan Moodley - Vice President Digital Factory, Siemens Southern and Eastern Africa, Raymond Padayachee - Vice President Process Industries and Drives, Siemens Southern and Eastern Africa  , Beeuwen Gerryts - Department of Science and Technology: Chief Director, Technology Localisation and Advanced Manufacturing, Coenraad Bezuidenhout - Executive Director: Manufacturing Circle , Pontsho Maruping - Technology Innovation Agency (TIA), Group Executive: Industrial Sectors , Martyn Davies - CEO, Frontier Advisory, Nomfuneko Majaja - DTI Chief Director for Advanced Manufacturing, Chris Gibbons – Siemens Future of Manufacturing Master of Ceremonies.

The Future of South African Manufacturing thought leadership panel: Dan Moodley, Raymond Padayachee, Beeuwen Gerryts, Coenraad Bezuidenhout, Pontsho Maruping, Martyn Davies, Nomfuneko Majaja, Chris Gibbons. (master of ceremonies).


Manufacturing has lost more than 300 000 jobs since the global financial crisis because these goals have not been pursued with resolute and coordinated action. At 11% of GDP, manufacturing employs 1,6-million people, is the second biggest sector of the economy and is one of the top three multipliers in terms of value add, job creation, export earnings and revenue generation.

Siemens’s vision is for South Africa to become a competitive manufacturing country, with a revitalised industrial sector building skills to create quality jobs, said Raymond Padayachee (VP, process industries and drives, Siemens Southern and East Africa). This required industry, government and organised labour to work towards a common goal.

Padayachee said that South Africa needs to follow countries which are pouring massive political and economic resources into improving their competitiveness through advanced manufacturing capabilities, and by upgrading their infrastructure, transforming the skills of their workforce, and prioritising science and its links with industry. He added that Siemens can combine powerful hardware with intelligent software to make industry more productive, efficient, flexible and competitive.

Other Future of South African Manufacturing thought leadership panellists were: Dan Moodley,VP digital factory, Siemens Southern and Eastern Africa;  Beeuwen Gerryts, chief director: technology localisation and advanced manufacturing, Department of Science and Technology; Coenraad Bezuidenhout, executive director, Manufacturing Circle; Pontsho Maruping, group executive: industrial sectors, Technology Innovation Agency, Martyn Davies, CEO, Frontier Advisory; Nomfuneko Majaja – chief director, advanced manufacturing, Department of Trade and Industry.

Bezuidenhout outlined four remedies to stem de-industrialisation and grow manufacturing.

Establish the right macro-environment to grow and attract dynamic manufacturers
This entailed disciplined macro-economic policy execution, adequate bulk infrastructure sightlines – in terms of transport, water and electricity provisions – and adequate maintenance to ensure security of industrial water and electricity supply.

Bezuidenhout emphasised that in addition to policy and policy execution, institutional barriers to growth in South Africa’s social dialogue and labour relations regime needed to be confronted if manufacturing was to move the economy forward.

Make South Africa a fair and competitive gateway to Africa

South Africa needed to encourage fair trade through swift necessary adjustments to tariff and non-tariff barriers. The country  must  focus on enhancing access and integration with African markets while pursuing more equal trade relationships with Asia and South America, and better leveraging its established trade connections with the US and the Eurozone.

South Africa must become a competitive beneficiator of its own resources

There is no doubt that better beneficiation offers a route to manufacturing growth. “We need to promote innovation through a more conducive intellectual property regime and by better leveraging government budgets, such as in the US where 2,5% of all government spending is directed at funding private sector solutions to government problems,” said Bezuidenhout.

South African goods need to enjoy preference locally and recognition across the world

South African manufacturers in many cases produce quality at very competitive prices. While government improves its traction in terms of local procurement, the private sector and consumers need to dovetail with these efforts. Manufacturers believe a strong above-the-line campaign to educate procurers and consumers about the many benefits of buying locally is an urgent necessity.

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