The South African automotive industry has a guiding document that will take effect from January 2020. The South African Automotive Masterplan (SAAM) lays out the targets and goals for the entire industry until 2035. SAAM will guide vehicle and component manufacturers, helping the industry to grow over the next 15 years.
However, this is just one masterplan for one sector of the South African economy. Trade and Industry Minister Ebrahim Patel has said that more masterplans will need to be developed in order to boost other productive sectors in South Africa. He was speaking at the Metals and Engineering Indaba in Sandton a short while back.
Minister Patel believes that boosting the manufacturing sector and making industry a central pillar of the country’s economic recovery will lead to growth and stability. “Government recognises a need to do things differently,” he says. Minister Patel will soon be appointing a facilitator to engage with industry stakeholders, on the government’s behalf, to establish the best way forward.
Stakeholders submitting draft masterplans to government
To date, the Department of Trade and Industry has received 40 submissions from various businesses, associations and unions for use in developing masterplans for various manufacturing sectors. A working draft masterplan will be developed for each of these sectors as soon as possible.
These masterplans must be action-orientated, easy to implement and concise so that all stakeholders (and the government) know what goals they are expected to reach by the deadline. These stakeholders know their industries inside and out, so their input on these masterplans is highly valuable.
Minister’s ideas for masterplans and growth
Minister Patel has a number of ideas that could stimulate growth in the manufacturing and engineering sectors. Firstly, he recognises the need to improve industrial performance and to enhance the competitiveness of businesses operating in this sector. The government has a vital role to play in this process by acting as a facilitator and creating an enabling environment for businesses.
Secondly, the Industrial Development Corporation will provide greater access and better interest rates for businesses in the sector that make use of its R1.5-billion fund. Patel’s department will also establish a Metals Fabrication Programme that will allow the government to invest R30-million in new metal foundries and processing mills.
“It will be important for the metal and engineering industry to engage with their automotive industry counterparts to look for ways to increase localisation and local value-add,” says Minister Patel. SAAM currently aims to increase local parts on vehicles manufactured in South Africa from 39% to 60% by 2035. With its recent multi-million rand investment in new machinery and technology, Formex Industries (a Level 2 B-BBEE listed owned company) is well-positioned to provide a future-facing solution to OEMs to meet the new criteria as set down in the new SAAM 2035 masterplan.
Lastly, Minister Patel believes that developing clusters in special economic zones will revitalise industrial sites and businesses in digital hubs. The government is aiming to establish a special economic zone in Gauteng for the vehicle components and automotive manufacturing industry. These plans will be clarified in November 2019.
Image credit: GCIS
Formex Industries is a metal forming and assembly company that supplies a variety of complex products to the local automotive industry and the export market. The company is based in the Nelson Mandela Bay metropole, South Africa’s foremost region for automotive manufacturing and export.
Formex specialises in producing components for the catalytic converter industry, as well as metal components and assemblies for the various vehicles. Formex aims to become one of the foremost suppliers for the South African automotive industry by 2035, aligning itself with the South African Automotive Masterplan (SAAM) which takes effect in 2020.
Formex is a Level 2 B-BBEE supplier with over 80% black ownership, of which more than 40% are black women. The company is owned by Deneb Investments Limited – a subsidiary of Hosken Consolidated Investments Limited (HCI) – one of South Africa’s biggest true B-BBEE companies listed on the Johannesburg Stock Exchange (JSE).