South African Business 2021

OVERVIEW
Johannesburg in 2019 where government incentives and ideas
about how to reduce the cost of expensive machinery through
co-ownership and partnerships were shared. The forum was cohosted
by the South African Furniture Initiative (SAFI), Proudly
South African, PG Bison and the Department of Trade, Industry and
Competition. The second Forum took place in October 2020, with
the support of Interior Design Professions (IID) and Trend-Forward.
The dtic’s Agro Processing Support Scheme (APSS) includes
furniture manufacturing as a core sector for future growth and
support. Other efforts to get government departments to buy locally
were explained. Average employment per manufacturer is 13 people
per facility which makes the sector well suited to expansion and to
measures requiring flexibility, but it can lead to manufacturers feeling
isolated. The idea-sharing forum is one way of overcoming that.
Contribution to GDP
Manufacturing’s contribution to South African GDP is 13%, less
than half its contribution in the 1980s and a drop of about 11%
from the 1990s. In 2018, the real-term contribution to GDP was
R386.8-billion (Stats SA).
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.
The global surf ski market is worth about R220-million.
According to Dale Granger of biznews, some 30-40% of that niche
market belongs to South African manufacturers such as East
London’s Fenn and Durban-based Revo and Carbonology. The
South African after whom the world’s first surf ski was named, Oscar
Chalupsky, is now CEO of Nelo Surf Skis in Portugal. A new surf ski
sells for between $3 000 and $6 000.
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 and Cipla Medpro. The
National Association of Pharmaceutical Manufacturers (NAPM)
ONLINE RESOURCES
Chemical and Allied Industries’ Association: www.caia.co.za
Manufacturing Circle: www.manufacturingcircle.co.za
South African Furniture Initiative: www.furnituresa.org.za
South African Textile Federation: www.texfed.co.za
has re-branded as Generic
and Biosimilar Medicines of
Southern Africa.
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.
South Africa’s chemical
industry contributes 5%
to national gross domestic
product and about 60% of
earnings are derived from
exports. The complexes
run by Sasol at Secunda
(Mpumalanga) and Sasolburg
(Free State) underpin the
national manufacturing
capacity. Sasol Chemical
Industries makes about 60% of
South Africa’s polypropylene.
AECI is one of South
Africa’s biggest groups. The
two principal divisions are AEL
Mining Services (with a large
factory site at Modderfontein
near Johannesburg) and
Chemical Services, which
has 20 separate companies.
Foskor is the country’s
only vertically integrated
phosphates producer.
The by-products of the
sugar and forestry processing
plants of KwaZulu-Natal
benefit the chemicals sector.
Illovo Sugar manufactures
downstream products such
furfural, furfuryl, alcohol,
diacetyl and ethyl alcohol.
Sappi makes 17% of the world’s
dissolving wood pulp. Two of
the companies three mills are
in South Africa, Ngodwana
(Mpumalanga) and Saiccor
(KwaZulu-Natal). ■
75 SOUTH AFRICAN BUSINESS 2021