South African Business 2020 edition

INTERVIEW OVERVIEW
Manufacturing
A new national drug tender is an opportunity for local manufacturers.
Manufacturing’s contribution to South African GDP is
14%, less than half its contribution in the 1980s and a
drop of about 10% from the 1990s. In 2018, the real-term
contribution to GDP was R386.8-billion (Stats SA). Overall
production was up 1.2% on 2017.
The manufacturing sector employs the third most people of South
Africa’s economic sectors, about 1.7-million, after financial services and retail.
Two of the manufacturing sectors that have achieved the best results
in recent years, automotive and food and beverages, are featured separately.
Food and beverages is the most significant, contributing 25% to
total manufacturing activity.
South African manufacturing is diverse, a fact that was on show when
the winners were announced in the 2019 Factory of the Year competition.
Run by management consultants AT Kearney, the overall winner was Port
Elizabeth-based exhaust systems company Eberspächer South Africa.
(An Eberspächer test bench is shown as the main image on this page.)
Other winners included stainless-steel manufacturers (Columbus Steel),
casting and machinists (Atlantis Foundries), packaging (Nampak Bevan)
and smart meter providers (Nyamazela Metering).
Several of the main organisations involved in manufacturing contribute
to the judging process: the Department of Trade, Industry and
Competition (DTIC), Council for Scientific and Industrial Research (CSIR),
the Industrial Development Corporation (IDC), the Manufacturing Circle
and the Lean Institute Africa, which has its office in the Graduate School
of Business (UCT) in Cape Town.
South Africa’s pharmaceutical sector is worth approximately
R20-billion annually. Although there are more than 200 pharmaceutical
firms in the country, large companies dominate, with Aspen (34%) and
Adcock Ingram (25%) the key players, followed by Sanofi, Pharmaplan
SECTOR INSIGHT
Clothing and textiles is
bouncing back.
and Cipla Medpro. The National
Association of Pharmaceutical
Manufacturers (NAPM) has rebranded
as Generic and Biosimilar
Medicines of Southern Africa.
A new tender for a national
supplementary HIV/Aids drug tender
which was previously awarded
to foreign companies is to be issued,
opening up opportunities for
local manufacturers such as Cipla
Medpro, which made up 23% of
the previous tender. The three-year
tender is worth R18.3-billion.
The opening in May 2018 of
a R1-billion specialised product
facility at the Port Elizabeth plant
of Aspen Pharmacare will add
500 jobs to the existing complement
of 2 000 staff members. The
new plant will make products for
chronic conditions for the company
which until now has focussed
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