Manufacturing

Growing the sector is key to higher levels of development. Manufacturing

Africa’s abundance of natural resources could form the basis for growth in the manufacturing sector as the continent aims to industrialise and to diversify its economy away from a reliance on its natural bounty in its raw form.

Increased agricultural and mineral production will produce more material to be processed and manufactured. A report published by The Brookings Institution in 2018 estimates that business-to-business spending in manufacturing in Africa could be $666.3-billion by 2030. This figure represents a $201.2-billion increase over the amount for 2015.

The African Union’s Agenda 2063 focusses on raising the continent’s industrial and manufacturing capacity. At the Africa Industrialisation Week held in Addis Ababa in 2018, various complementary plans were outlined to support this goal: the Accelerated Industrial Development of Africa (AIDA), the Pharmaceutical Manufacturing Plan for Africa (PMPA), the SME Strategy, the Boosting Intra-African Trade and the African Continental Free Trade Area and the UN General Assembly’s Third Industrial Development Decade for Africa (IDDA III).

The topics covered at the conference give a good idea of what the priorities are for continental manufacturing: • regional value chains and linking to global value supply • symposium on Special Economic Zones (SEZs) • green industrialisation • catalysing SMEs and the productivity of start-ups • youth entrepreneurship to reduce migration

Vehicle manufacturers are setting up plants. Sector Insight

• youth and women empowerment in enterprise development • financing industrialisation.

The African Development Bank (AfDB) reports that growth spurts driven by manufacturing have a more lasting and deeper impact on a country’s economy than resource-driven booms. The AfDB concludes that, “The implications of such a strong association between manufacturing-driven growth episodes and jobs is that industrialisation is the key to the employment conundrum in Africa” (African Economic Outlook, 2019).

Growing the manufacturing

Excellence, innovation and transparency

Staff at Superfecta Trading are electro-mechanical engineering specialists. A s founder members of Superfecta Trading, Patrick and Abigail Mphephu have developed what used to be a company that dealt only in facility management into a multi-faceted electro-mechanical engineering enterprise whose partnerships with international companies gives them the scope to offer a broad range of products and services.

General Manager, Noluthando Nkota

Manufacturing is soon going to be part of the company’s portfolio. Superfecta will soon open a factory where it will manufacture transformers. With an increasing focus in South Africa on the need for local content, the potential for this aspect of the business to grow is enormous. Superfecta Trading is also looking forward to providing more job opportunities as the manufacturing side of the business takes off.

Services offered

System maintenance This includes: • Day-to-day/ad hoc • Preventative maintenance • Scheduled maintenance • Servicing and repairs.

Mechanical With a professional team of mechanical technologists, Superfecta prides itself on the supply, installation and maintenance of mechanical work.

Oil purification Transformer oils undergo electrical stresses while the transformer is in operation. We provide the online or offline purification services needed to extend the life of transformer oils.

Electrification and distribution Superfecta is engaged in infrastructure development in rural and urban areas through an extensive programme of installing electricity infrastructure.

High-tension electrical reticulation Superfecta installs and conducts repairs to hightension electrical circuits in many parts of South Africa, in urban and rural areas.

Transformers Superfecta is a one-stop shop for all transformer and transformer- related work and we pride ourselves on delivering a comprehensive and complete service.

sector across the continent will lead to industrialisation, urbanisation and more value being added. The bank reports that, “African countries with the highest shares of manufacturing in value added also have higher levels of development.”

Food processing and beverage production are among the strongest sectors in Africa. The Dangote Group, which has interests in cement, sugar, salt, flour, pasta and beverages, is active in 16 African countries and has a turnover of $4.1-billion. Anheuser-Busch InBev has built or is building new breweries in Nigeria, Mozambique and Tanzania and intends to increase its local supply, which will help grow local businesses.

A favoured strategy to encourage manufacturing is through Special Economic Z o n e s . T h e s e c o m e i n different forms, including Free Trade Zones (FTZs), Expor t Processing Zones (EPZs) and industrial parks. T y p i c a l l y , t h e s e z o n e s attrac t tax benefits and tariff exemptions. Zones in Ethiopia, Djibouti, Nigeria and Rwanda were established with the help of state-owned Chinese companies.

Automotive drive

The second-hand car market has for a long time held back automotive manufacturing on the continent as there was not sufficient demand for new cars. South Africa has a sophisticated automotive vehicle and components sector. In 2018 South Africa exported 23 988 vehicles to other African countries. Egypt and Morocco have automotive manufacturing capacity, but several international brands are showing interest in setting up plants in new locations on the continent.

Whereas the global average is 180 vehicles per 1 000 citizens, Nigeria averages just 44 (Deloitte). With Africa’s middle-class set to grow exponentially in the next decades, the car market is likely to explode.

Although South Africa’s automotive industry is healthy, it is strongly supported by various state incentives. As the Chairman and Managing Director of Volkswagen Group South Africa, Thomas Schaefer, explains, “If production stays far below a million cars production per year, we will never be profitable or sustainable, so Africa could be the key.”

Schaefer is the president of the African Association of Automotive Manufacturers. He says of the potential of Sub-Saharan Africa, “When you look at the number of cars per thousand inhabitants in most of the African countries there is opportunity in places like Kenya and Nigeria. If you take away the used car drag, there’s no reason why their market could not grow. If Kenya came to a level like South Africa, they could achieve a market of five or six hundred thousand.”

Volkswagen South Africa opened an assembly plant in Rwanda in 2018. The first phase of the company’s integrated automotive mobility solutions strategy will cost $20-million. In the same year, the company signed a memorandum of understanding to develop an automotive hub in Nigeria. Nissan signed a similar agreement in the same year with Ghana. Nissan has a semi-knockdown assembly plant in Nigeria, where it has an agreement with Stallion Group.

Kenya is the focus of attention of several car makers. Peugeot, Volkswagen (VW), CNH Industrial and Nissan Motor have indicated plans to assemble cars in the country and it is thought that Renault and Mahindra & Mahindra are also interested. Kenyan company Simba Corporation, which was founded on vehicle sales and service, is looking to partner with one or more of these international brands. Simba already owns Associated Vehicle Assemblers, which assembles trucks on contract for the likes of Hino and Toyota in Mombasa.

The 2016 decision of Beijing Automotive International Corp (BAIC) to build a $759-million plant at the Coega Industrial Development site in Port Elizabeth, South Africa, has everything to do with selling into the African market. ■

Accelerated Industrial Development of Africa: www.au.int/en/ti/aida Agenda 2063: www.au.int/en/agenda2063 Association of Ghana Industries: www.agighana.org Federation of Egyptian Industries: www.fei.org.eg Kenya Association of Manufacturers: www.kam.co.ke SME Strategy: www.ifc.org Online Resources

Kemtek’s three-dimensional growth advanced technologies in the commercial print, industrial print, 3D print/additive manufacturing, auto identifi cation, bar coding and labelling sectors. As such, we are proud to be the sole distributor in Southern Africa for many of the leading internationally-renowned brands in those sectors in which we operate, such as HP Indigo, Komori, Flint, Fujifi lm, Argox, CipherLab, Datalogic and Brother. And, with a focus always on providing highly skilled services and post-sales support, we’re ensuring our customers are maximising their potential for growth and profi t - day in, day out!

An industry leader in printing sees good prospects in Africa.

Over the past decade, the printing industry has had a bad “rap”. Since the onset of the green mindset, people have made assumptions that printing is wasteful and bad for the environment, that it results in deforestation, and that it is expensive. In fact, using the correct technology can result in cost-effective, environmentally-friendly printing which results in brilliant marketing and other important benefits to business. Printing technology is also flexible – the industry has a responsibility to keep up with latest trends in order to remain sustainable and relevant. Whether it’s simple inkjet printing, digital printing or 3D printing, demand remains, and the world’s tech companies continue to supply quality products to this important sector.

In South Africa, the current economic situation has seen slowing GDP growth. Together with the perceptions of the print industry, this has resulted in a challenging trading environment. However, Kemtek Imaging Systems (Kemtek) is positioning itself for growth and maintaining a positive outlook.

Kemtek has been serving the print, labelling, bar coding and associated sectors since 1988. Growth has been gradual but through determination and a strong focus on staff, Kemtek is today recognised as the industry leader with five South African branches, almost 200 employees and dealer agreements for international brands such as Argox, Brother, Datalogic, Epson, Fujifilm, Honeywell, HP Indigo, and many more.

Growth for Kemtek will come in three forms: expansion on the continent, expansion in the product range and development in the 3D printing market. Says CEO Johan Botes, “We’re seeing good prospects in Zimbabwe, Zambia, Ghana, Kenya, Malawi, Mozambique and a number of others. What we’ve done successfully is gain partners, bring them to South Africa, train them and maintain a strong relationship.” Kemteck has about 200 resellers in 28 countries.

With 3D printing, there are significant opportunities for the African continent, where adoption of new technology is swift. Like mobile phones, 3D printing could be the killer app that enables Africa to leapfrog into a new age of industrial production. Customer-oriented The focus on the customer experience at Kemtek goes beyond the sales process and incorporates after-sales service, maintenance, repairs and ensuring a quality experience. The company’s major asset is its staff through which it delivers a wealth of knowledge that is not found in other organisations. Kemtek differentiates itself through support, repairs, dealing with warranties and telephone support.

Kemtek is perfectly positioned to achieve its vision of further growth. With its stake in the 3D printing industry, its ever-growing African operations and its solid base in South Africa, this is a company that looks set to continue leading the way in the specialist sectors in which it operates. ■ For more information, visit www.kemtek.co.za Targeted industry product demonstrations and events are proving popular with customers and prospective customers alike. NATIONAL: 0861 KEMTEK • JHB: +27 (0)11 624 8000 • PTA: +27 (0)12 804 1410 • DBN: +27 (0)31 700 9363 • CPT: +27 (0)21 521 9600 • PE: +27 (0)41 364 3690 WWW.KEMTEK.CO.ZA J25589 J25589_Kemtek_Propak_Advert_FA.indd 1 2019/02/14 16:12