Manufacturing

Free State manufacturing is weighted towards advanced technology.

Executive Director of Kevali Chemicals, Funeko Khumalo, on the factory floor with members of the SAB Accelerator team.

Sasolburg in the northern Free State is a key asset in South Africa’s highly developed chemicals industry.

International giant Sasol has the biggest presence but companies such as Omnia and AECI are other major companies which give the Free State the lead in this sector which relies on advanced technology. Sasol in particular is faced with some tough decisions in the short term as its plants must start to comply with stricter sulphur dioxide emission standards.

Manufacturing makes up 9% of Free State gross domestic product, and this comprises 4% of South Africa’s total. The Free State Regional Industrialisation Policy is being reviewed to ensure integration of infrastructure, bulk service provision, industrial sites and export and tax incentives to attract investment.

The existing manufacturing sector has capacity in many sectors including chemicals, agri-processing, textiles, carpets, engineering, packaging, furniture and jewellery.

About 20% of the Free State’s manufacturing sites are devoted to food and beverages, with softdrink giant Coca-Cola Fortune operating a large bottling plant in Mangaung. Landzicht Wine Cellar, an operation that distributes 2.4-million litres of wine every year from Jacobsdal, has recently built a new bottling plant. Innovation in manufacturing is encouraged at the Product Development Technology

SECTOR INSIGHT

A new chemicals plant has been launched in the MAP Special Economic Zone.

Station at the Central University of Technology (CUT). The PDTS helps small businesses with the technology to design new products, to test them or to improve existing products. The PDTS is funded by the Technology Innovation Agency (TIA) and works in partnership with another CUT unit, the Centre for Rapid Prototyping and Manufacturing (CRPM). This innovative thinking is helping the Free State look for ways to develop new kinds of manufacturing.

The Manufacturing and Competitiveness Enhancement Programme (MCEP) of the National Department of Trade, Industry and Competition (the dtic) has disbursed grants which have resulted in 230 000 jobs being sustained. Because of the Clothing and Textile Competitiveness Programme, that sector, a traditional strength of the Free State economy, is picking up in terms of turnover and in jobs created.

Kevali Chemicals is a new entrant in the chemicals sector and the result of several public and private support programmes. The company is a black-owned chemical manufacturer, supplying AB InBev with adhesives, cleaning and CIP chemicals. Kevali is a participant in the SAB Accelerator, AB InBev’s Supplier Development Programme, where they received sales and technical coaching.

In 2018 Kevali Chemicals became the first beneficiary of the Black Industrialists Scheme (BIS) of the National Department of Trade, Industry and Competition. A grant of R35-million allowed the company to acquire machinery and equipment to start a new line of production and manufacturing at a facility in the Maluti-A-Phofung (MAP) SEZ.

The plant will create 57 direct and 12 indirect jobs. The Industrial Development Corporation (IDC), a development financier, is also supporting the scheme and it has helped workers at the plant become shareholders in the venture.

Attractive incentives are on offer to manufacturers at the MAPSEZ which was officially launched in 2017. The 1 000ha facility at Harrismith is strategically located on the N3 highway, which runs between the ports of KwaZulu-Natal and the industrial heartland of Gauteng province.

Companies from China, Bulgaria and India have expressed interest in the SEZ proposition. Among the projects in the pipeline are a factory making transformers and one to make medical equipment. Between 2017 and 2019, investments estimated at about R550-million were made into the zone. Investments made into infrastructure at the SEZ have resulted in 250 direct permanent jobs and 420 indirect jobs.

The revitalisation of industrial parks at Botshabelo and Phuthaditjhaba has contributed to manufacturing increasing its contribution to provincial gross value add (GVA). The Industrial Park in Botshabelo was relaunched in June 2016. The R60-million project, part of a scheme to revitalise industrial parks in the province, hosts 12 manufacturing companies. A Risk Sharing Funding and Black Industrialist Scheme aims to support five black industrialists in the manufacturing sector.

Botshabelo has a manufacturing sector which employs more than 10 000 people in textiles, plastics and other sectors. However, the bulk of the employed population of Botshabelo commute to Bloemfontein. A number of factory buildings and parcels of publicly owned land in Botshabelo and along the N8, which are either not used or underutilised, are being targeted for development.

Phuthaditjhaba is home to several textile operations. The IDC is supporting the clothing and textile industry with loans and investments.

Harrismith is home to Nouwens Carpets and Boxmore Plastics. Boxmore Packaging’s new PET beer bottles are the first PET bottles specifically designed for beer on the SA market. Empire Gloves makes industrial gloves. Kroonstad-based Octa Engineering makes specialised rail carriages for the mining sector. In Bloemfontein, Transnet Engineering manufactures new wagons for the Transnet group, including iron ore and cement wagons and fuel tankers.

ONLINE RESOURCES

Free State Development Corporation: www.fdc.co.za Chemical and Allied Industries’ Association: www.caia.co.za Product Development Technology Station: www.cut.ac.za/pdts South African Textile Federation: www.texfed.co.za