Re-industrialisation in South Africa is critical, according to Coenraad Bezuidenhout, Managing Director of Strategic Communications at FTI Consulting, who argues for a manufacturing-led growth path for the country. This will enable the creation of employment opportunities, reduce inequalities and eliminate poverty in order for the South African economy to develop further, he says.

Coenraad Bezuidenhout Strategic Communications“The manufacturing and mining industries alike, have significant upstream and downstream linkages to other sectors in the primary, secondary and tertiary sectors. The socioeconomic contribution of these sectors is vital to social upliftment and the enhanced interface between the mining and manufacturing sectors remains an essential benefactor to the success of re-industrialising South Africa,” Bezuidenhout explains.

“Much opportunity for traditional manufacturing in South Africa will emanate from mass urbanisation happening in Africa over the next 25 or more years. This will create demand for a mix of household goods and infrastructure items, which South African manufacturers are well-placed to supply. South African manufacturing's relationship with its upstream sectors, as well as the degree that we can increase the efficiency with which we convert raw materials and the quality of products they are inputted to, will determine much of the sector's success as it drives toward becoming a more innovation-led sector.”

Enhanced collaboration between the mining and manufacturing sectors would lead to expansion and/or diversification of production in manufacturing, increased value addition to domestic economy, infrastructure sharing potential, increased demand for mining sector products from an expanding domestic manufacturing sub¬sector and reduced import penetration, he adds. It would also have a positive impact on domestic procurement.

“It’s clear that the manufacturing industry could recapture some of its market share by collaborating more closely with the mining industry. In turn, this would boost economies of scale and manufacturing competitiveness. There is also further potential for growth of the manufacturing sector in terms of exporting to the rest of Africa.”

Government has stated that supporting domestic procurement and localisation, building on its successes, and securing private sector support is a priority. The re-industrialisation approach put forward by Bezuidenhout would tie into this, potentially raising the export prospects of South African manufacturers and reducing import infiltration. These factors, directly influencing cost structures, would see South Africa’s attractiveness as an investment destination for both local and foreign investors raised, he says.

“It makes economic sense, particularly in the South African context, to enhance the mining and manufacturing interface through greater coalition of research and development efforts with respect to mining technology, as well as in developing innovative applications in mining and/or beneficiated products, providing access to new markets that would contribute towards expanding and diversifying the country’s industrial base. The challenge for South Africa’s export sector is, therefore, to enhance its global competitiveness and value addition, to diversify its product offer and penetrate non-traditional markets, especially in rapidly growing emerging and developing economies.”

Image credit: http://conference.csir.co.za/speakers/coenraad-bezuidenhout/


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