Manufacturing companies are increasingly looking to de-risk manufacturing production by enhancing and investing in local production. This as global supply chain disruptions, initially occasioned by the pandemic and exacerbated by the Russia-Ukraine war, continue to constrain the global economic recovery.
Trade, Industry and Competition Minister Ebrahim Patel says South Africa could benefit from the global de-risking opportunities if it deals with some of the most urgent constraints in key sectors of the economy.
Patel was addressing the media on the sidelines of the Manufacturing Indaba currently under way in Sandton, north of Johannesburg.
“The lesson that many big corporations are taking is the need to diversify, to not have the concentration risk that all of the worlds manufacturing taking place only on the Asian continent. That gives an opportunity for Africa. If we can make good progress on energy, on logistics, on water, and skills development, on digital infrastructure, we are well positioned to benefit from the search by global corporations to de-risk.”
Private sector keen to invest in local manufacturing
Business Unity South Africa (BUSA) CEO Cas Coovadia says the private sector is keen to invest in manufacturing production in the context of the post-COVID-19 pandemic recovery.
He says however the private sector needs government to do its part when it comes to the implementation of regulations in the industry. Coovadia says the blanket approach towards localisation may also need to be reviewed to encourage greater private sector participation.
Coovadia was speaking on the sidelines of the Manufacturing Indaba.
“You can’t set overall target to say we are going to achieve 20% local manufacturing in 5 years. We need to actually target specific product areas, look at what the capacities are in those area and how we can actually jack up local manufacturing and set targets for those areas. So we need to be a bit more pragmatic about what we can do and what government needs to do is ensure that those areas of activity which are hampering manufacturing are addressed. Like the blockades for instance.”