Gauteng Business 2018-19 edition

OVERVIEW
panding and modernising its operations. Domestically, the main
consumers of steel products are the mining, manufacturing, building
and construction sectors, while a significant share is destined
for the export market.
Steel has been experiencing a volatile few years, with reduced
demand for from China severely reducing production volumes in
South Africa. The Steel and Engineering Industries Federation of
Southern Africa (Seifsa) reported that 19 000 jobs were lost in the
metals and engineering sector in the nine months to September
2016. This sector makes up 28% of manufacturing in the country.
Cheap imports have been at the heart of problems for the steel
sector, as they have for textiles, but other issues include energy
prices and labour costs
There are as 35 aluminium processing firms in Gauteng, involved
in both secondary processing to produce foils, cans, bars, rods and
sheets, with final fabrication in the form of die-casting and sheet
metal work. Within Gauteng, the automotive and packaging industries
are the chief consumers of these products.
AECI is a large manufacturing company with its roots in the
mining industry. It comprises two principal divisions: AEL Mining
Services (with a large factory site at Modderfontein south of
Johannesburg) and Chemical Services, which presides over 20
separate companies (including Senmin, the group’s mining chemicals
company).
Incentives
The Manufacturing and
Competitiveness Enhancement
Programme (MCEP) of the
National Department of Trade
and Industry (dti) announced in
2017 that it had disbursed a total
of 1 552 grants to the value of
R5.8-billion which had resulted in
230 000 jobs being “sustained”.
Plastics, pharmaceuticals and
chemicals received 31% of the
money; metal fabrication, capital
and real transport equipment
28% and agri-processing 21%.
Italian forged wheel manufacturer
Lucchini received tax
and training allowances from
the dti which helped it decide
to invest R200-million in a new
forged wheel-making facility.
Blank railway wheels imported
from Italy will be completed at
the Germiston plant. Lucchini
previously sold its wheels in
South Africa through DCD
Ringrollers, itself a maker of
forged steel tyre products.
Lucchini has committed to increasing
the local content in the
manufacturing process.
The dti is the state’s lead
promoter of the sector, as seen
in the MCEP example. The
main vehicle for the dti is the
Industrial Policy Action Plan
(IPAP), the seventh version of
which was launched in 2016.
The Support Programme for
Industrial Innovation (SPII), run
by the Industrial Development
Corporation (IDC) on behalf of
the dti, promotes technology
development.
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