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Closing Address: Metals and Engineering Indaba

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13 SEPTEMBER 2010: 16:45 – 17:00
DELIVERED BY: MARTIN L KINGSTON
VICE PRESIDENT – BUSA

1. Introduction

As we mark the 25th anniversary of South Africa’s democracy and within the first few months of the 6th democratic Government in our country, we have the opportunity to reflect on the advances that South Africa has made over the past two and a half decades:

  • We have the most advanced economy on the continent with a thriving democracy;
  • Real GDP per capita has almost doubled from c.$3,500 p.a. in 1994 to c.$6,300 p.a. today;
  • [Our banking sector, with assets that have grown more than 15 fold since 1994 to R5.8tn today, is one of the leading in the world; and
  • Foreign direct investment, although coming off a low base and currently under pressure, has grown almost 15 times to R71bn in 2018].

However, and as discussed earlier, South Africa is facing significant headwinds, coupled with a growing sense of negativity as illustrated by Wednesday’s announcement of the business confidence index having reached a 20 year low. The environment facing the country is one that is hallmarked by 6 key issues:

  1. A constrained global macro environment, aided and abetted by unprecedented geopolitical tensions;
    Current growth levels continue to significantly lag global GDP growth of 3.3% (Q1 2019). South Africa’s growth now lagging both developed economies (2.2%) and emerging economies (4.2%). The constant downward revenue of our growth statistics undermines both our credibility and confidence levels in the environment. Importantly, in recent years GDP growth has lagged population growth, implying that average incomes are falling;
  2. Stubbornly high unemployment, with South Africa’s expanded definition of unemployment at almost 40%, whilst youth unemployment is 55%;
  3. Infrastructure challenges, SOE governance and fiscal constraints;
  4. A hostile labour market. Accordingly to the most recent WEF Global Competitiveness Report, South Africa is ranked 136th out of 140 countries in terms of cooperation in labour employer relations;
  5. The need to address the skills shortage. The most recent OECD Survey ranked South Africa 75 out of 76 countries based on maths and science; and
  6. The country’s credit rating at risk of being downgraded to subinvestment grade. Moody’s, the last remaining investment-grade rating, is set to reassess South Africa’s credit rating in November 2019, although recent indications may offer us a brief respite.
  • We are in the eye of the storm where we need to take responsibility for the circumstances confronting us.
    • All stakeholders need to urgently accelerate efforts to create an environment conducive to stability and investment given the significant headwinds we need to navigate.
    • We need to accept the link between investment, growth and jobs. In so doing, we must honestly assess the constraints and address them decisively and collaboratively, involving all social partners (government, business, labour and community).
  • As outlined by the National Development Plan (“NDP”) and National Treasury’s recent Economic Strategy for South Africa, the most effective weapon in the campaign against the triple challenges of poverty, unemployment and inequality is faster economic growth, underpinned by education and skills development.
  • The private sector, including the metals and manufacturing sectors, has a critical role to play in assisting the State to achieve inclusive economic growth and reach its developmental goals, primarily through investment but also through collaboration with government and its social partners. It is increasingly acknowledged by government including the Minister this morning that it is the private sector that is the key contributor to economic activity: GDP, taxes, employment, fixed direct investment. However, that does not translate adequately into clear and aligned patterns of co-operation and partnership.
  • Structures such as Business Unity South Africa, and its members including SEIFSA, SACCI, Business Leadership South Africa, and other sectoral and country chambers play an essential role in ensuring a coordinated effort across all stakeholders to optimise the investment environment.

2. Role of the metals and engineering related sectors

  • The mining, metals, engineering and manufacturing sectors have long been viewed as labour-absorbing industries that could provide a significant solution to South Africa’s structural unemployment and assist in driving GDP growth.
  • Key Government policy documents, including the NDP, outline the basis upon which these sectors can assist in driving inclusive growth.
  • However, both the manufacturing and mining industries have seen a decline in their contribution to the overall South African economy:
    • Manufacturing’s contribution to GDP has decreased from almost 16% in 1994 to 13% in June 2019.
    • Over this same period, the manufacturing sector’s overall contribution to South Africa’s employment has steadily decreased from 15% in 1994 to just above 10% in 2019.
    • The mining sector’s contribution to GDP has halved over the last 25 years, with the current contribution to GDP being less than 8%.
    • Employment by the sector has followed a similar trend, with the sector’s contribution to employment falling from 11% to below 5%, shedding 220,000 jobs in the process.

3. Key sector challenges

  • The downturn in South Africa’s manufacturing sector has been driven largely by unreliable and uncompetitive electricity supply, high administrative costs, inadequate skills, outdated technologies, cheaper global competition and weak demand.
  • The latest statistics show that South African manufacturing production is running at 81% utilisation – almost 20% below available manufacturing capacity.
  • Rectifying this is critical as manufacturing is a key enabler of development given its role in promoting productivity growth, skills development and relatively high-income elasticity of demand in world markets. The metals sector has a significant role to play in South Africa’s economic trajectory.
  • In mining, a number of leading South African mining companies have restructured their operations. By way of example:
    • Anglo American completed the sale of its domestic coal assets to Seriti;
    • South32 has announced the sale of its SA coal assets; and
    • Impala Platinum recently announced the closure of some of its less profitable shafts.
  • Further challenges facing the sector include:
    • Soft commodity prices, combined with high input cost inflation,
    • Infrastructure constraints including electricity, transportation and water availability and competitiveness; and
    • Labour relations – managing wage inflation, whilst productivity remains under pressure
  • The new Mining Charter was finalised in 2018 and has been a positive development relative to the uncertainty that existed for an extended period of time prior to its finalisation.
  • Although we are making some progress, much more needs to be done if we are to ensure the growth of the mining, metals, engineering and manufacturing sectors.

4. Infrastructure constraints impact growth

  • Eskom:
    • The manufacturing, metals and mining sectors account for just under two-thirds of
      South Africa’s electricity consumption.
    • Eskom’s current financial crisis (in excess of R440bn in debt), represents a material threat to these industries (as it does for the rest of the South African economy), with the key issues relating to the reliability, predictability and competiveness of electricity.
    • In March 2019, the National Energy Regulator of South Africa approved electricity increases of 9.4%, 8.1% and 5.2% for the next three financial years. These increases were significantly below Eskom’s application for double-digit tariff increases – which were opposed by business and labour.
    • However, current and future tariff increases, which are above inflation, will continue to put the mining, metals and manufacturing sectors under pressure.
    • Failing to deal comprehensively with Eskom is no longer an option. It must be restructured, a significant proportion of its debt must be assumed by the state directly, its workforce must be right-sized, its cost base and clients addressed and competition introduced.
  • Other:
    • Rail and port capacity remain a concern.
    • We need to investigate solutions to fund the development of increased capacity to assist in driving new investment and the expansion of manufacturing and mining output.
    • Given the funding constraints of Government and SOEs more broadly, public-private partnerships need to be seriously considered for future infrastructure rollout. There is no doubt that public private partnerships represents not only an opportunity but a fundamental solution to dealing with the deficit of capital and skills in key areas of the economy. I am glad that government is now acknowledging this.

5. Investment

  • Inbound FDI was at its lowest level in a decade in 2017 – at R27bn. In 2018, the FDI recovered to R71bn assisted, in part, by President Ramaphosa’s drive to attract investment of $100bn over a five year period. The Investment Conference held
    November 2018 and scheduled to occur again in November 2019 are designed to provide a platform to maximise investor interest.
  • South Africa is in desperate need of increased investment, this starts with the government actively taking steps to increase investor confidence, which will drive increased investment leading to improved economic growth, creating sustainable jobs
    and employment. We cannot create jobs without investment and growth. Increased tax revenue, enabling the government to tackle poverty and inequality as well as to address the challenges facing the public sector, will predominantly come from the private sector.
  • As BUSA, we recognise that if we are to maximise investment and deal with constraints underpinning viable and sustainable commercial operations at an individual, sectoral and national level, a number of key issues need to be addressed. We have accordingly raised them directly with the President and the political leadership of the country. These include:
    • Lack of policy alignment and implementation;
    • Corruption, maladministration and malfeasance (both in the public and private sector);
    • Failure to address political and populist rhetoric, which alienates investors and the citizenry more broadly, including the vexed issues of the status of the SARB, land expropriation, attitude towards immigrants;
    • An inflexible attitude often displayed by labour suggesting that there is an inadequate acceptance of the parlous state of the economy;
    • Dysfunctional, poorly managed and governed SOEs, which are inadequately capitalised and generally not fit for purpose. We need to take difficult decisions as to how we address these challenges, recognising that failure to do so will simply exacerbate problems in the future;
    • The recent examples of gender-based violence, civil unrest and xenophobia, the high levels of criminality and a culture of impunity matched by a limited accountability; and – Debt levels that are unacceptably high, threatening the viability of individual businesses and the economy at large.

6. Other actions that could be taken by the Government to assist

  • National Treasury, in its recent Economic Strategy for South Africa Paper, estimated that manufacturing could grow by as high as 3.9% over the short term and 4% over the long term with the right policy approach. I would encourage SEIFSA to review and comment on this paper.
  • In this context, potential areas of Government support include:
    • The Sectoral Master Plan for the Steel & Metals Sector is in the process of being concluded between the Department of Trade, Industry and Competition and industry. This should be encouraged, considering the success of interventions
      such as the Automotive Production and Development Programme – generally seen as a successful example of state support and intervention.
    • Steel products and components for construction are designated by government, meaning that designated sectors’ goods must be manufactured locally. [However, designation is not always implemented by municipalities and SOEs. Consequently, the success story on the Competitive Supplier Development Programme by Eskom and Transnet, for example, is limited. This needs to be addressed and Business has tabled this for consideration by the Minister of Trade, Industry and Competition.]
    • The decline in the Infrastructure Spend Programme arising from the fiscal crunch has resulted in a significant reduction in construction activity, including the demise of a number of large South African construction companies. Government action to invest effectively in infrastructure is critical.
    • To improve the potential of Special Economic Zones (“SEZs”) to incentivise investment.
    • The Chinese interest in and commitment to Africa presents both an opportunity and a threat. To ensure that local businesses and skills development are not prejudiced, Government needs to explicitly prioritise the use of local skills, contractors and engineers and complies with designation of inputs in local projects.
    • The African Continental Free Trade Agreement (“AfCFTA”) has been signed and will enter into force in July 2020. The AfCFTA represents a significant opportunity for South African business. Regional growth opportunities should be harnessed to promote export growth, and , as Minister stressed, the AfCFTA may provide a much-needed boost to South Africa’s manufacturing sector.
  • [To support and encourage the aforementioned areas, BUSA have agreed to participate in various structures recently established by Minister Patel, including:
    • The SEZ Reference Group;
    • A Ministerial Export Promotion Panel;
    • The National Committee on the African Continental Free Trade Agreement; and
    • A Committee on Digital Trade.]
  • Non-tariff barriers in the form of transport and logistics bottlenecks, customs barriers and high port charges, etc. also need to be addressed across the region to fully exploit the potential benefits of regional integration. On this, BUSA has established a BUSA /Transnet working group and has commenced engagements with Government in the context of the Ports Charges Joint Committee (led by BUSA and the DTIC) to explore ways of reducing ports charges to render exports more competitive.

7. Conclusion

  • It is critical that all stakeholders recognise that economic growth is the most effective instrument to address South Africa’s challenges.
  • As I have said, whilst the private and public sectors are collectively looking to drive growth and attract investment, it is in fact private sector investment that is the key lever to delivers sustainable and inclusive growth given public sector constraints.
  • As the apex body for organised business in South Africa, BUSA believes that it is our responsibility to take the lead on behalf of and alongside our members, such as SEIFSA, in defining how business can maximise its contribution and, together with our partners in labour and government, ensure we deliver on South Africa’s undoubted potential, despite the current challenges.
  • As Kaizer said at the opening yesterday, South Africa can be saved if we work together as a team. I fully agree that neither government not business can achieve this independently of one another. We need to harness the energy that I have seen here, speak openly and directly and commit to implementable actions where we take individual and collective responsibility for navigating our problems thus ensuring that South Africa properly positions itself for success.
Continental Free Trade Agreement

Promise of a New Dawn Still Holds But the Private Sector also Has a Role to Play

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Johannesburg, 13 September 2019 –  The ushering in of President Cyril Ramaphosa as the new Head of State in February 2018 brought with it the promise of “A New Dawn” underpinned by four pillars namely: clean governance; anti-corruption; the re-building of a broken economy and improvement of education and training but 18 months later, South Africa still finds itself confronted by pedestrian economic growth, high unemployment rate as well as poverty and inequality.

“We were also, in 2018, promised by then Minister of Finance Malusi Gigaba that ‘drastic measures would be put in place to implement meaningful and far-reaching reforms in State-

Owned Entities (SOEs), it is now  2019, South African Airways still doesn’t have a new board and Eskom does not have a CEO,” Accountant and Commentator Khaya Sithole said at the Southern African Metals and Engineering Indaba taking place at the IDC this afternoon.

Mr Sithole attributes the lack of implementation of the New Dawn to indecision, leadership vacuum and Luthuli House civil wars, among other factors. This, he said has, in turn negatively impacted business confidence.

Speaking on the same panel, Massmart and Aspen Holdings Chairman Kuseni Dlamini said we have to accept the fact that there are elements of the New Dawn that are good and there are elements that are not.

“There are elements of success in the New Dawn including the fact that there is a new style of engagement between Government and business that is honest and transparent, the New Dawn has also brought with it hope amongst the business community.”

He said while the New Dawn appears to be waning amongst South Africans, the international community remains positive about South Africa as one of the emerging markets.

“The reform of SOEs hasn’t worked and yes there are other challenges but this challenges all of us to work together to deliver on the promise of the New Dawn, Government will not do it alone,” said Mr Dlamini.

Meanwhile, South African Chamber of Commerce and Industry CEO Allan Mukoki said for South

Africa’s economy to grow and its credit ratings to improve, we need to restructure, change and renew the public service by bringing to the public sector highly-skilled and competent individuals to lead the sector.

“We also need to solve the problems with our SOEs. It is incorrect to expect a Minister who has never worked outside the public sector to be able to choose SOE board members. We need to reconsider how Board members are elected. If we don’t get these fundamental things right. We will not be able to deal with the bigger challenges confronting the country.

 

Issued by:
Ollie Madlala
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: ollie@seifsa.co.za
Web: www.seifsa.co.za

MEI 2019 Ebrahim Patel Thumbnail

Metals and Engineering Sector Masterplan Key to Unlocking Growth Opportunities

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Johannesburg, 13 September 2019 – The Metals and Engineering Sector Masterplan, which is currently being formulated will unlock growth opportunities for the embattled metals and engineering sector, which faces, among other challenges, rising input costs and lack of demand, Trade and Industry Minister Ebrahim Patel said this morning.

Addressing delegates attending the Southern African Metals and Engineering Indaba taking place at the IDC Conference Centre in Sandton, Minister Patel said the sector is a critical bedrock of the economy and there is a need to expand its productivity and advance its capabilities to increase the sector’s contribution to South Africa’s GDP.

Industrialisation, Minister Patel said, will be at the centre of economic recovery and there is a need to refocus on the industrial strategy.

“We are working on the Masterplan for the sector, we have met with metals and engineering sector stakeholders in an effort to ensure that they contribute to the formulation of the Plan. Subsequent to the meeting, we have received more than 40 submissions from industry players. I will be appointing a Facilitator so we can further engage the contributors and finalise the plan. The final Masterplan will be a concise, action-oriented and implementable plan,” he said.

He said Government has recommitted to the sector through the R1.5 bn steel fund and the  establishment of the metal fabrication support programme. He added that Government has also played a key role in  restoring Highveld Steel to become Africa’s only manufacturer of rail lines. In addition, the Minister said Government has spearheaded the initiative, which resulted in Totoya minibuses, which were previously imported, being assembled locally, thus contributing towards employment creation.

“We did the same with buses, which we previously imported from Brazil. We realised that South Africa had the capability and drove the process, to date more than 750 busses have been assembled in South Africa and not only are they assembled locally but they also boasts about 80% local content .

Furthermore, the Minister said his Department will focus on monitoring that the local content law is applied and that there is a committee to ensure consequences for non-adherence.

In conclusion, Minister Patel said enormous opportunities will also be presented by the African Continental Free Trade Agreement. Africa is the new growth frontier, it has an about $100 billion infrastructure gap, this will require at least five times the amount of steel that South Africa currently consumes.  Opportunities are enormous but proper planning will be required in order for the metals and engineering sector to benefit.

In response to Minster Patel’s remarks, SEIFSA President Elias Monage stressed the need for regular engagements between Government, business and labour.

“For the M&E Masterplan to succeed, we need to move away from event-driven communication where challenges are raised then we disappear only to meet the following year and raise the same challenges. We require full commitment from all metals and engineering sector stakeholders and we need Government to provide a conducive environment for the

Masterplan to work and for the sector to grow.” Mr Monage said.

 

Issued by:

Ollie Madlala
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: ollie@seifsa.co.za
Web: www.seifsa.co.za

New South African Automotive Masterplan bodes well for Metals and Engineering Sector

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Johannesburg, 12 September 2019 – The recently launched South African Automotive Masterplan (SAAM) bodes well for companies operating in the metals and engineering (M&E) sector, National Association of Automotive Component & Allied Manufacturers, Executive Director Renai Moothilal said at the Southern African Metals and Engineering Indaba.

“The New Materplan is very likely to have a positive impact on the M&E sector provided companies operating in the sector put competitive measures in place to take advantage of the opportunities provided by the plan,” Mr Moothilal said this afternoon.

He said given the fact that the SAAM places local content at the centre of any future support for the industry, with government having set a target of raising local content from less than 40% currently to 60% by 2035, the M&E sector, which is a supplier to the automotive industry, can expect positive outcomes.

“There will be a role for the whole sector to play. Component manufacturing is currently dominated by multinational manufacturers. This will change going forward. These companies will be compelled to contribute towards the growth of smaller local manufacturers by sourcing certain components from them, thus making them part of the value chain.

The outlook is, therefore, positive. Yes there will be challenges but there are companies in the M&E sector who are doing well inspite of the current challenges facing the economy because they have adopted a positive mindeset and invested in skills development, etc. More companies need to adopt a positive, growth oriented mindset and most importantly ensure they enhance their competitivenes,” Mr Moothilal said.

In addition to the local content, the SAAM, adopted by Cabinet in November last year also aims to double employment in the sector to 224 000 jobs by 2035, from 112 00 currently, and position South Africa to produce 1% of global vehicle production, or 1.4-million vehicles.

Speaking on the same panel, SEIFSA Chief Economist Michael Ade said policy has a role to play in ensuring that the plan does benefit the domestic M&E sector.

“Active support for pro-South Africa approach to industrilalisation within the World Trade Organisation rules should characterise trade policy to provide an immediate boost to align busineses in both the metals and engineering and automotive industries,” said Dr Ade.

He said empirical evidence shows that  the M&E cluster benefifted from previous and existing auto industrial policies namely the Motor Industry Development Plan and the Automotive Production and Development Programme.

“Prevailing evidence also points to continuous benefits post 2020 and during the Materpan years; there is, however, a need for consistent policy support to maximise the existing symbiotic relationship between the M&E sector and the auto industry.
In conclusion Dr Ade said targeted, conducive and enabling policies should aim at improving reciprocal domestic demand in both industries.

 

Issued by:
Ollie Madlala
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: ollie@seifsa.co.za
Web: www.seifsa.co.za

A Third Consecutive Decrease

A Coherent, and Focussed Strategy Required to Make Sure South Africa Benefits from 4IR

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Johannesburg, 12 September 2019 – South Africa needs a coherent and focused strategy on how to take advantage of opportunities that will be presented by the fourth industrial revolution (4IR), so said Council for Scientific and Industrial Research CEO Thulani Dlamini.

Speaking at the annual Southern African Metals and Engineering Indaba currently taking place at the IDC Conference Centre, Mr Dlamini said there is no denying that the 4IR is already happening and as a country South Africa needs to not only make sure that it is ready to take advantage of the opportunities presented by the 4IR but to also be in a position to deal with the concerns that have been raised including job security and impact on global competitiveness.

“Countries such as Japan, Germany and South Korea have formulated coherent strategies aimed at ensuring that they increase their countries’ competitive advantage. South Africa needs to do the same. Failure to do this will result in South Africa getting left behind and unable to compete at a global level, Mr Dlamini said.”

He said there is also a need for the country to make concerted efforts in developing human capital and equipping them with high-end skills that will be needed to take advantage of the 4IR.

Speaking on the same panel, Deputy Minister of Higher Education Buti Manamela said Government is already putting numerous initiatives in place to ensure that South Africa does not get left behind.

“We recognise the rapid increase in technological advancements and we are making sure that the public sector responds with favourable policies that will support and enhance the country’s ability to take advantage of the 4IR,” the Deputy Minister said.

He said in its efforts to make sure that South Africa does not get left behind Government, in 2018, participated in the South Africa/European Union 4IR dialogue and will feed the outcomes of that dialogue into Government Policy development.

He added that as a country we also need to grow high level research capabilities and ensure stronger links between research institutions and business.

Department of Trade and Industry’s Future Industrial Production and Technology Chief Director Ilse Karg said South Africa has an advantage over developed countries to be a leader in 4IR due to its young and growing population.

“More than 50% of our population are young people under the age of 35. We, therefore, need to design skills development programmes that will make sure that young people are trained and employable. We have, for the last ten years, been running a pilot programme that has been an ernoumous success and we will scale it up nationally in collaboration with other Government departments including the Department of Education,” Ms Karg said.

Speaking on a panel which reflected on a growing Chinese Presence in South Africa, Black Business Council’s Judy Nwokedi said South Africa needs to make sure that small and medium enterprises benefit from China’s presence in South Africa.

“We also need to ensure that we don’t get exploited as a country. We must safeguard against exploitation of resources and cheap  labour and we must ensure  that Chinese loans don’t come with conditions similar to the Stractural Adjustment Programmes imposed by the World Bank and the IMF when providing funding to third world countries.”

BRICS Business Council Member Elias Monage said South Africa lacks focus and leadership alignment between Government and business. This he said  is the reason why South Africa’s manufacturing sector has eroded over the last ten years.

“Part of the reason why China is taking over the world is that its Government and businesses work together, they are focused and they take decisive decisions together. We ought to learn from them and our Government needs to support and partner with the manufacturing sector if we are to stand a chance to compete against China.”

Issued by:

Ollie Madlala
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: ollie@seifsa.co.za
Web: www.seifsa.co.za

SEIFSA SA FLAG 300x300

SEIFSA Calls Upon All South Africans to Work Together to Reverse High Unemployment, Xenophobia and Violence against Women

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Johannesburg, 12 September 2019 – Steel and Engineering Industries Federation of Southern Africa (SEIFSA) CEO Kaizer Nyatsumba has called upon Government,  business leaders, labour representatives and the general public to join hands and get involved in various efforts to reverse the many ills confronting South Africa including high unemployment, poverty, xenophobic attacks as well as violence against women and children.

Speaking at SEIFSA’s fifth Annual Southern African Metals and Engineering Indaba currently taking place at the IDC Conference Centre in Sandton, Mr Nyatsumba said as a country, we need to face up to the challenge that ours is a sick country that is dangerously close to tipping over – unless we fold our shirt sleeves and put shoulder to the wheel.

“The responsibility to save South Africa belongs to us all. In any society, this is way too important a task to leave to politicians alone. It is even worse in our case, where a growing number of politicians are exposed in various forms almost on a weekly basis to be self-serving individuals who worry only about themselves, their families and their political parties, with the country coming stone last, Mr Nyatsumba said.”

He added that South Africa has been taken over by angry, vile and unemployed men who rape, murder and pillage with gay abandon, comfortable in the knowledge that they will get away with it because the police are either on the take or useless and  law-enforcement agencies are impuissant.

He said amidst the state that South Africa currently finds itself in, it appears as though leaders have either gone to ground or are too pre-occupied with their internecine conflicts and sundry machinations.

“This is why we cannot leave the mammoth tasks of growing the economy, creating employment, fighting the scourge of xenophobia and protecting women to political leaders. It would, infact, be very irresponsible of us, as business and labour leaders, to stick our necks in the sand and pretend as though everything is hunky-dory. In my view, we all have a duty, individually and collectively, not only to face our current reality squarely in the face, but also to do something about it.”

In conclusion, Mr Nyatsumba said he believes that South Africa can be saved provided Government, business, labour and the general public work together as a team.

“We believe that however much the men and women of goodwill and integrity in Government may be willing to do so, the Government cannot execute this mammoth task alone. Obviously, with business not pulling the levers of legislative power, business also cannot do it alone. Instead, we need a strong partnership involving, in the first instance, Government, Business and Labour, followed by the general community.”

Ends

Issued by:

Ollie Madlala
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: ollie@seifsa.co.za
Web: www.seifsa.co.za

Kaizer M. Nyatsumba

Introductory Remarks At The Fifth Southern African Metals And Engineering Indaba

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By Kaizer M. Nyatsumba, Chief Executive, SEIFSA

Date: 12 September 2019

Thank you, Melissa, for that fantastic introduction.

Ladies and Gentlemen, we meet at a most inauspicious time for our beautiful country. Unlike a year ago when there was so much hope of a New Dawn in the air, when the Commission into State Capture had just begun its public hearings and so much was expected to come of the President’s inaugural Investment Conference, we meet today at a time when our country is engulfed with bad news and our leadership has been exposed to be weak and so far unequal to the gargantuan task ahead.

Everywhere we look, leadership has taken cover and, as I had occasion to write in a poem more than two decades ago, “the sanguinary are in control”. We have become the rape and misogyny capital of the world, where just having been born female is enough to mark one out for all kinds of abuse. Our mothers, sisters, wives and daughters live in palpable fear of being molested and murdered with what looks like absolute impunity, while our leadership limply throws its hands into the air, mouths yet more empty condemnations and makes more unconvincing promises and undertakings.

Our streets have been taken over by angry, vile and unemployed men who rape, murder and pillage with gay abandon, comfortable in the knowledge that they will get away with it because our police are either on the take or useless and our law-enforcement agencies are impuissant. With unspeakable savagery, they lay into men and women whose only sin is that they are from another African country; torch trucks on the country’s roads for no reason other than that those who drive them across our towns, cities and borders are employed and are unknown to them; and target construction sites in our industrial areas to demand – by brute force – a stake in other people’s businesses, to which they will add not an iota of value.

Our borders exist in name only, with anybody who so desires free to walk in and out of them any time, in the process worsening our unemployment crisis and seriously inflaming passions among the indigent who do not know where their next meal will come from and for whom the only asset they have in abundance is time. Our borders are porous, our police are useless – I guess I have earned the right to say so: my brother was murdered in 2009 and, more than a decade later, nobody has yet been arrested – and our Department of Home Affairs and the National Defence Force are laughing stocks.

All this goes on while our political mandarins are either conspicuous through their silence or, when they dare surface to make some pronouncements, either make the same mealy-mouthed excuses for their failure to do the jobs for which they were elected or threaten – yet again – fire and brimstone, fully knowing that their words are not worthy of the pieces of paper or the Notepads from which they read them.

To our utter dismay, it would seem that our beautiful country is on auto pilot. Its leaders have either gone to ground or are too pre-occupied with their internecine conflicts and sundry machinations. It is as if we are left to our own devices.

Is it any wonder, then, that our economy has continued to flounder so badly and that our State-owned companies are in such a pitiable state? I don’t think so.

Far be it from me, Ladies and Gentlemen, to depress you right at the beginning of our Fifth Southern African Metals and Engineering Indaba. That is not at all my intention. I point these things out because it would be irresponsible of us, as business and labour leaders, to stick our necks in the sand and pretend that everything is hunky-dory. In my view, we all have a duty, individually and collectively, not only to face our current reality squarely in the face, but also to do something about it. We are not as helpless as we may sometimes believe ourselves to be.

We are far more powerful beyond measure. We must, each one of us, speak out robustly against the many ills confronting our country, and join hands with those who are similarly concerned and are keen to get involved in various efforts to reverse the very evident decay confronting us. We need to stop romanticising about a non-existent nirvana and face up to the challenge that ours is a sick country that is dangerously close to tipping over – unless we fold our shirt sleeves and put shoulder to the wheel.

The responsibility to save South Africa belongs to us all. In any society, this is way too important a task to leave to politicians alone. It is even worse in our case, where a growing number of politicians are exposed in various forms almost on a weekly basis to be self-serving individuals who worry only about themselves, their families and their political parties, with the country coming stone last. We need to reach out across the racial, political, class, gender and whatever other divides to work with all who profess to love South Africa and want to see it prosper.

That is the context in which we hold this Southern African Metals and Engineering Indaba. We believe that South Africa can – and will – be saved, if we all work together as a team. We believe, as I often point out, that, however much the men and women of goodwill and integrity in government may be willing to do so, the Government cannot execute this mammoth task alone. Obviously, with business not pulling the levers of legislative power, business also cannot do it alone. Instead, we need a strong partnership involving, in the first instance, Government, Business and Labour, followed by the general community.

Regrettably, it is sad to observe that, even during this period of a supposed New Dawn, we still have some people in Government behaving as if they were some demi-gods, rather than Servants of the People who elected them into office in the first place. It is a great pity, for instance, that among the nine members of the Ramaphosa Government invited to address this conference and interact with you, the Shareholders of this Beautiful Republic, all but two contrived to come up with various excuses for their absence. Even with one of the largest Cabinets in the world, in which every Minister has a Deputy, those who showed disdain to the metals and engineering sector by spurning our invitation would not even dispatch their Deputies or Directors-General to address this conference.

Sadly, both we and others who organise similar industry conferences have come to know that some among our Cabinet Ministers prefer events where theirs will be the only voices to be heard, without any other stakeholders to challenge them or hold them to account. Some would even go as far as to seek to control a conference’s agenda by insisting that members of political parties other than their own should not be invited.

We at SEIFSA have doggedly resisted such pressure – and will continue to do so. We are a Federation representing important stakeholders in our economy, and have no appetite whatsoever for any political gimmickry or games. We invite to our conferences any individual that we deem to have the experience, insights, wisdom and the power to contribute meaningfully to discussions of any issues being considered.

As always, Ladies and Gentlemen,   we look forward to a fruitful, robust engagement with our speakers in the course of the next two days.

As you may recall, during the Indaba last year, we asked you to consider adopting resolutions on some of the important issues that came under discussion. To refresh your memory, those resolutions saw delegates:

  1. Expressing disappointment at the failure of some Cabinet Ministers to attend important sessions of the conference to which they were invited;
  2. Calling on the Government to enforce designation of local content more rigorously in production processes across all value chains and expressing disappointment at the awarding of tenders to foreign companies by some State-owned enterprises when there is capacity for local businesses to manufacture the same products;
  3. Calling on the Government to include the local manufacturing industry in decision making regarding foreign and domestic investments to promote beneficiation and job creation;
  4. Calling on the Government to prioritize local businesses in all investment and construction projects, including Black Economic Empowerment partners, to comply with South African rules to address racial disparities;
  5. Calling on the Government to find a way of extending to the mid- and downstream group of industries in the metals and engineering sector the support available to primary steel producers; and
  6. Calling on the Government to reconsider the introduction of a carbon tax in the country, at a time when business is already struggling.

These resolutions have formed the basis of SEIFSA’s lobbying activities during the course of the last year. Regrettably, we have all lost the fight on the carbon tax, thanks in no small measure to the parlous state of the fiscus.

Ladies and Gentlemen, we at SEIFSA believe very firmly that, however difficult things may be at the moment, there continues to be a future for Manufacturing in South Africa and our region, and we believe that that future also includes a thriving Metals and Engineering Sector. However, for the sector to realize its full potential, it behoves all of us – in business, Government and labour – to get all hands on deck.

Thank you very much, yet again, for your attendance. Let us have a fruitful engagement that will be seen by future generations to have been vital for the continued survival of our Sector.

Thanks, too, to our host, the IDC, and all our Sponsors and Media Partners.

Ends

MEI 2019 Thumbnail

High-Calibre Speakers To Address Metals And Engineering Indaba From Tomorrow

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Johannesburg, 11 September 2018 – High-calibre speakers from Government, labour, business and academia will address delegates attending the fifth annual Southern African Metals and Engineering Indaba which takes place at the IDC Conference Centre in Sandton tomorrow and on Friday, Steel and Engineering Industries Federation of Southern Africa CEO Kaizer Nyatsumba said today.

Speaking ahead of this year’s annual gathering of captains of industry, policy makers and entrepreneurs, Mr Nyatsumba said the 2019 Indaba boasts highly-respected business leaders, politicians and academics, including Trade and Industry Minister Ebrahim Patel, NUMSA General Secretary Irvin Jim, Massmart and Aspen Holdings Chairman Kuseni Dlamini, Wits Business School Professor Patrick Bond and Deloitte’s Dr Martin Davis, among others.

These speakers will tackle challenges currently facing South Africa’s economy, which is marred by slow growth, high unemployment, high inequality and most recently attacks on foreign nationals.

Mr Nyatsumba said the speakers will deliberate on the following topics, among others:

  • A Growing Chinese Presence in South Africa: How Should Local Business Respond?
  • The Fourth Industrial Revolution and Manufacturing: Is South Africa Ready – Or Will It Be Left Behind?
  • Africa is Open for Business: Is Local Manufacturing Ready to Leverage Opportunities Presented by the African Continental Free Trade Area?
  • The Economy, Labour Stability and the 2020 MEIBC Negotiations on Wages and Conditions of Employment

Now in its fifth year, the Indaba is organized and hosted by SEIFSA. Its core objective is to provide a platform for policy makers, labour representatives and businesses operating in the metals, engineering and related sectors to discuss the challenges facing the sector and collectively to devise sustainable solutions aimed at ensuring its sustainability.

Mr Nyatsumba encouraged those who have yet to register for the 2019 Southern African Metals and Engineering Indaba to do so speedily to avoid missing out.

 

Issued by:
Ollie Madlala
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: ollie@seifsa.co.za
Web: www.seifsa.co.za

A Third Consecutive Decrease

Does the NDP Still have the Potential to Turn South Africa’s Economic Fortunes Around?

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Johannesburg, 10 September 2018 – Seven years ago, the Government adopted the National Development Plan (NDP), a blueprint for how South Africa could eradicate poverty and reduce inequality by 2030.  While the plan drew criticism from some labour formations, many other stakeholders – among them the business community – hailed it as a solid foundation upon which inclusive economic growth could be achieved.

But, seven years on, just how much of the plan has been implemented – and does it still have the potential to turn South Africa’s economic fortunes around?

Wits School of Business Professor Patrick Bond, Political Economy South Africa Executive Director Siya Biniza and Department of Trade and Industry Acting Deputy Director-General Dr Anneline Chetty will provide an assessment of South Africa’s implementation of important policies, including the NDP and the Industrial Action Policy Plan, at the Southern African Metals and Engineering Indaba taking place at the IDC Conference Centre on Thursday and Friday, this week.

Speaking ahead of the Indaba, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) CEO Kaizer Nyatsumba said he remains of the view that, if implemented correctly, the NDP and its strategic infrastructure projects (SIPs) have the potential to help South Africa turn its economic fortunes around.

“The Government’s expenditure on the projects would revive industries such as construction and our very own metals and engineering, which have been in the doldrums for years. South Africa has, for a very long time, been embattled by slow growth, unemployment, the continually widening gap between the rich and the poor and most recently widespread attacks on foreign nationals that one could argue are fueled by poverty and hopelessness. The NDP, through its SIPs, has the potential to help turn the situation around,” Mr Nyatsumba said.

Now in its fifth year, the Indaba is organized and hosted by SEIFSA. Its core objective is to provide a platform for policy makers, labour representatives and businesses operating in the metals, engineering and related sectors to discuss the challenges facing the sector and collectively to devise sustainable solutions aimed at ensuring its sustainability.

The Indaba will also deliberate on the following topics, among others:

  • A Growing Chinese Presence in South Africa: How Should Local Business Respond?
  • The Fourth Industrial Revolution and Manufacturing: Is South Africa Ready – Or Will It Be Left Behind?
  • Africa is Open for Business: Is Local Manufacturing Ready to Leverage Opportunities Presented by the African Continental Free Trade Area?
  • The Economy, Labour Stability and the 2020 MEIBC Negotiations on Wages and Conditions of Employmen

The line-up of speakers includes:

  • NUMSA General Secretary Irvin Jim;
  • Ayanda Mngadi, Chairperson of the Manufacturing Circle;
  • Elias Monage, Executive Chairman of Afika Holdings and Member of the South African Chapter of the BRICS Business Council;
  • Massmart and Asphen Pharmacare Holdings Chairman Kuseni Dlamini; and
  • Dr Thulani Dlamini, CEO of the Council for Scientific and Industrial Research;

Mr Nyatsumba encouraged those who have yet to register for the 2019 Southern African Metals and Engineering Indaba to do so speedily to avoid missing out.

Issued by:
Ollie Madlala
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: ollie@seifsa.co.za
Web: www.seifsa.co.za