In this together
Local producers need to support each other to remain competitive in the face of cheap imports. By ANTHONY SHARPE
Safety footwear factory.
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ast year the manufacturing sector lost 9.1 per cent of turnover and 10.6 per cent of total income, According to South African Insights. There are a several reasons for this, including decreased demand, a reliably unreliable supply of power from Eskom, and an over-reliance on imported products. Imports have hurt a range of manufacturing industries. Silvio Ceriani, CEO of BBF Safety Group, knows all about this: it’s what led to the formation of the company he heads. “The advent of cheap imports really put the local footwear-manufacturing industry under strain: companies were shutting down and margins were closing. As individual footwear manufacturers, we just couldn’t compete.” In 2014, realising the only way they could survive was by combining forces, the four main local safety footwear manufacturers – Bagshaw, Beier, Frams and Wayne – joined to form
BBF Safety Group, enabling them to pool resources and compete across categories and price points. Ceriani says that the weakening rand has driven up the cost of some imports, bringing them in line with local pricing, but there remains a never-ending line of low-cost importers. “Where this really hurts the local market is that smaller manufacturers struggle to maintain a consistent competitive edge. We have to accept nominal margins on some ranges just to move volume through the factory, but at least we have that flexibility because of our size.”
local companies, the onus is also on us to procure locally as far as possible and develop local suppliers,” says Ceriani. “It’s easy to get imported clothing, finish the garment in South Africa and claim local manufacturing, but that’s not really being part of the solution.” He believes that government’s intentions are right when it comes to support for local manufacturers, but there are frustrations with the turnaround from regulatory bodies, and implementation and enforcement among companies and state-owned enterprises is lacking. “We believe stricter implementation of procurement policies will help grow SMMEs. For example, KEEPING IT LOCAL South African when we submit for certain Deepening the local value production fell 16.3 per cent procurement, we submit chain requires more than in June compared with local content letters for just assembling products 2019. This was the our footwear that explain in South African factories. smallest downturn since how we work towards It means sourcing all the lockdown hit the 80–90 per cent local raw requisite components locally economy in March. materials and manufacturing. too, as far as possible. “If Source: Trading Economics. That level of scrutiny is what will we as a local manufacturer drive real growth of SMMEs.” are asking the market to support
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Levelling the playing field
process and find changes need to be made, these can be fed directly back to the design level instantaneously.” The advantage of this in the local context is that manufacturers can produce a product designed anywhere in the world and prove The local manufacturing sector is building that they’re doing it to the required standard. “In the aerospace its digital capacity. By ANTHONY SHARPE CSIR advanced industry, for example, this is critical,” material testing lab. says Sanne. “They have clear specifications that must be adhered CREATING JOBS to. If you’re a manufacturer supplying to an multipliers are in high-value manufacturing and If the fourth industrial revolution has original equipment manufacturer (OEM) you advanced materials.” taught us anything, it’s that every company have to show your quality control processes. in every industry globally needs to keep The same applies to medical devices and pace with technology to remain relevant DIGITALISATION chemical processes.” and competitive. A number of key advances in manufacturing Sanne says the CSIR is driving best While South Africa is a producer of are linked to digitalisation of factory processes. practice and that this starts with skills more basic commodities, it’s important Sanne says this involves digital capturing development. “We’re building a smart for the country to focus on high-value of line processes, starting at the learning factory. We have a number of manufacturing and advanced materials, requirement level. advanced manufacturing machines. says Martin Sanne, executive at the Council “All process around functional descriptions, We’re supporting companies in additive for Scientific and Industrial Research (CSIR). CAD designs and so forth are linked to these manufacturing, and our National Centre (CSIR). “Manufacturing is a job multiplier: for original requirements, so once a product has for Nano-Structured Materials has, over every manufacturing job you create, been designed it can be verified against the the past 10 years, built up full capability to you can create between two and 15 original specs. make virtually any materials, including new additional jobs, so it’s a huge boost to “We call this closed-loop manufacturing. plastics and nanoclays.” the economy,” says Sanne. “And the big As you’re going through the manufacturing
