433369666-The-Case-for-Investing-in-South-Africa

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MACHINERY AND EQUIPMENT (NON-ELECTRICAL) INDUSTRY:
SIGNIFICANT PRODUCTION CAPACITY DOMESTICALLY
• The machinery and equipment sub-sector, which contributes 6.4% to total manufacturing GDP, comprises a
wide range of manufacturing operations. This includes the production of general purpose machinery, special
purpose machinery and household appliances, as well as office, accounting and computing equipment.
• This sub-sector’s production value chain generally encompasses the sourcing of inputs from the upstream metal
castings, engineering, electrical and electronics sectors. It supplies its products to downstream manufacturers,
service providers, households and other machinery producers.
• South Africa has a well-developed and relatively competitive manufacturing capacity in durable goods
production, particularly in larger household appliances.
• South African manufacturers of machinery and equipment have largely tended to focus on lower-end technology
products, but linkages to the advanced electronics supply chain are strengthening, with innovation as a key
driver.
• Relative comparative advantages and domestic technological and production expertise in certain segments (e.g.
the mining and yellow metal equipment production industries) have supported export growth.
Top machinery and equipment exports, 2018
Source: IDC analysis, compiled using South African Revenue Service data
ZAR
million
% of total SA
merchandise
exports
Parts for use with lifting, moving machinery 5 794 0.5%
Machinery to sort, screen, etc mineral products 5 105 0.5%
Pumps for liquids 4 660 0.4%
Self-propeled earth moving, road making machines 3 188 0.3%
Automatic data processing machines (computers) 2 582 0.2%
Liquid, gas centrifuges, filtering, purifying machine 2 564 0.2%
Shafts, cranks, gears, clutches, flywheel, pulleys, etc 2 278 0.2%
Other 29 299 2.4%
Total machinery and equipment exports 55 469 4.5%
MACHINERY AND EQUIPMENT (NON-ELECTRICAL) INDUSTRY:
INVESTMENT OPPORTUNITIES
• The relatively high import intensity of fixed investment activity in South
Africa points towards significant opportunities for import replacement.
This is supported by localisation initiatives and by the government’s
industrial policy framework.
• The infrastructure development programme, which has been rolled
out by the public sector (i.e. national government, state-owned
companies such as Eskom, Transnet and PRASA) in recent years, has
been boosting demand for the machinery and equipment sector and
thus contributing to the expansion of production capacity domestically.
• Local production of smaller household and kitchen appliances is
generally characterised by assembly and focused on less specialised
products. There is scope for the localisation of production of
specialised and more technologically advanced items, including
components.
• Other significant manufacturing import replacement opportunities in
the machinery and equipment sector include steam turbines and other
vapour turbines.
SELECT OPPORTUNITIES IN
MACHINERY AND EQUIPMENT
PRODUCTION
• Mineral processing machinery
• Materials handling equipment (e.g. escalators,
conveyor systems, rough-terrain forklifts,
cranes, components of heavy-duty shovels/
scoops)
• Pumps and valves used in agriculture, mining,
water-works
• Industrial heating or cooling machinery
• Refrigeration equipment
• Air conditioning equipment and machinery
• Industrial lab furnaces, ovens and incinerators
• Weighing equipment
• Power transmission equipment
• Steam turbines
• Construction equipment