State of the Metals and Engineering Industries Sector Report 2017/2018
State of the Metals and Engineering Industries Sector Report 2017/2018
Brilliant insights, diagnosis and forecast that will give you an informed perspective
SEIFSA brings you the State of the Metals and Engineering Sector 2017 to 2018 Report publication. This specialist sector economics outlook publication will provide you with an exclusive view on the sector from our Senior Economist, Tafadzwa Chibanguza.
For enquiries please contact Natalie Fourie on 011 298 9400 or email her on Natalie@seifsa.co.za
Cost: R1 500 excl VAT per copy
Profile of Tafadzwa (Taffie) Chibanguza
Tafadzwa (Taffie) Chibanguza is a Senior Economist at SEIFSA leading the Economics and Commercial Division. With a vast knowledge on the economy, and especially the metals and engineering sector, Tafadzwa consults companies on issues such profitability, modeling inflation cost prices and indices to help organisation remain sustainable.
He has also focused on price economics, international trade and supporting the industrial policy research. He holds a Bcom Economics and Econometrics degree from the University of Johannesburg, a Bcom (Honours) Degree in Economic Policy from the University of Witwatersrand, and a Master of Commerce Degree in Economic Policy from the University of Witwatersrand.
From the Chief Executive Officer’s Desk - January To February 2017
A belated welcome to 2017 and everything of the best to all SEIFSA News readers and their respective families, and to all stakeholders in the metals and engineering sector.
We – all of you reading this issue of our magazine – have survived 2016, which was probably the most difficult year economically in our democratic era. Surviving the year shows that we are sufficiently resilient as companies and individuals. Having done so, we should be more than ready to stabilize and fly in 2017 and beyond.
By all accounts, 2017 is certainly expected to be a much better year than its predecessor. If our political mandarins were to refrain just long enough from shooting themselves in the feet, as is their wont, our hitherto stuttering economy should do considerably better this year. An expert analysis by our Economics and Commercial Division shows that the economy should grow by 1.2% this year and by 1.8% in 2018, against the backdrop of improved commodity prices. The metals and engineering sector is expected to grow by 1.4% as a function of improving global and domestic growth.
As we all know, though, the economy is intricately intertwined with our politics. This means that the degree to which the aforementioned forecast is realized will be impacted upon by the conduct of our political leaders. Another factor will be the degree to which we will enjoy labour stability in the different sectors of the economy, starting with our own. Collectively, both factors may yet again be significant constraints on the economy, as they have been in the past.
Regrettably, over the past few years our political leaders have proved to be unequalled when it comes to scoring spectacular own goals. That has been our lot as a country over the past few years. Sadly, nothing in the horizon suggests that we may be spared the kind of folly to which we have now become both accustomed and increasingly inured.
If anything, every indication suggests that politically 2017 will be an even more volatile year. This is because the governing party, the African National Congress (ANC), will hold its 54th national conference in Gauteng on 16-20 December 2017, during which a new leadership will be elected. Regrettably, in the run-up to every ANC conference, much focus within the ANC is on jockeying for positions, with members of different factions in the organization expending much – if not all – of their time on positioning themselves for elections to the National Executive Committee (NEC).
In the run-up to provincial and national ANC elections in the past decade, we have seen important decisions in Government deferred or put on hold if they were perceived to have the potential to hurt somebody’s political fortunes, with those perceived to be likely to improve somebody’s political fortunes being actively championed. For the same reason, other initiatives have been opposed or resisted because they would make an individual or faction within the organization look good ahead of the conference.
Leaders and members of the ANC will be very internally focused this year. That much has already been evident since the beginning of the year. The degree of internal divisions in the organisation is unprecedented. Not only do individuals and groups rally behind and support certain candidates for election into the top six and the NEC of the ANC, but, for the first time ever, now members of the self-same organisation go out of their ways actively to impugn the character of those to whom they are opposed or who belong to factions different from their own.
For instance, those in favour of the continuation of the status quo have embarked on a scurrilous campaign to tar and feather especially Deputy President Cyril Ramaphosa and Finance Minister Pravin Gordhan, among others. They have even resorted to manufacturing lies and sundry propaganda against them and spread these to the media through whispering campaigns.
This is totally unprecedented. I have never known such a divisive election campaign in the ANC before.
At the time of writing, it appears as though there are some dynamics of a not-dissimilar but low-profile nature at play within the official opposition, the Democratic Alliance (DA). The sudden resignation of Cape Town Mayor Patricia De Lille as DA leader in the Western Cape looks and sounds very suspicious, despite protests to the contrary from De Lille herself.
Given the various controversies in which he has been mired, President Jacob Zuma’s standing as Head of State has been seriously undermined to the extent that he can no longer address either House of Parliament without attendant drama. With his appeals against the re-instatement of the 700-plus charges against him and the Public Protector’s damning findings against him in the State of Capture report due to be finalized this year, President Zuma is likely to have an even tougher time in 2017 than he did last year.
Any controversy in which President Zuma finds himself mired will damage the candidature of his former wife, Dr Nkosazana Dlamini-Zuma, for the ANC presidency because, rightly or wrongly, she is seen as his proxy. Whether or not she is, indeed, his proxy, what we know for a fact is that she is his preferred successor.
So, while all indications are that 2017 will be a better year for our economy, much depends on the quality of political leadership that we will see this year. Unfortunately, that is something over which we have no control. However, we can – and should – keep our heads down and focus on that which is in our direct control.
Kaizer M. Nyatsumba
Chief Executive Officer
A win-win solution to unemployment
By Melanie Mulholland
Demand-driven apprenticeships are a win-win in increasing the employment prospects of unemployed young people and closing the ever-increasing skills gap, but companies have to enable this process.
South Africa’s youth unemployment is at its lowest level for five years, but there are still major concerns about the long-term job prospects for the young.
According to a new report issued by the International Labour Organisation (ILO), South Africa ranks sixth globally in terms of youth unemployment, with a rate of 52.5 percent. Vocational interventions, like apprenticeships, are a much-needed solution for South Africa to prevent a long-term negative impact.
Participating in apprenticeships is one of the many ways in which employers can acquire and develop the skills they need, while improving the employability of the younger generation.
Employers’ end game
Employers articulate their skills needs and identify skills mismatches in their respective sectors with the end game of job creation. Employers have to be in the driver’s seat throughout the entire process, from consultation through to trade test implementation, in order to create successful 21st-century artisans.
Such holistic engagement by companies would enable and support quality apprenticeship programmes that address pertinent skills gaps which need to be closed. At the same time, it would support a committed and productive workforce that can add value. This would open up a pool of skills and pathways for new talent into companies, occupations and sectors.
Many employers immediately understand the benefits of taking on apprentices and recover the costs of their investment as early as the second year of the duration of apprenticeships.
Apprenticeships focused on the 21st century consist of three components: a theoretical component, a practical (simulated) component and a workplace learning component. This is a dual apprenticeship model. This mode of delivery combines learning in the workplace with learning at a Technical Vocational and Education College (TVET) in an integrated programme. This programme is now being referred to as the Artisan of the 21st Century or A21 apprenticeship.
In order to deliver A21 programmes, the involvement of employers is a fundamental pre-requisite. As part of this training, an apprentice undergoes national trade testing at an accredited trade test centre after completion of required theory, practical and workplace training requirements, certifying them for their skills.
While on qualification and recognition of learning, we need to be cognisant that South Africa has a history of placing a higher value on the academic pathway from school to university. In recent years, it has become more evident that this pathway does not fit everybody and, now more than ever, it is vital that as a country we develop high-quality vocational pathways that acquire the same respect that other educational choices. It is often a fact that qualified apprentices often earn more than their university counterparts.
Quality training is a unanimous trait that many employers from various sectors are demanding, especially in the manufacturing and engineering sectors. Businesses are overwhelmingly positive about 21st century apprenticeships and understand that work-based training can, indeed, boost much-needed skills and productivity - as well as the career prospects of young people. While the government is right to turn the spotlight on apprenticeships, I believe it is wrong to focus on numbers put through rather than the quality of apprenticeships.
South Africa’s target, according to the National Development Plan, is to deliver more than 30000 additional artisans every year until 2024. This target has plenty of associated risks in undermining the combined efforts in place to increase the profile of apprenticeships. The focus on achieving this arbitrary figure would lead to a robotic model, where apprenticeships come out of a production line and quality suffers. This, in turn, would end up with apprenticeships continuing to be seen as an inferior alternative to attending universities and institutions of technology.
To add to this, apprenticeships are expensive. The best and perhaps only way to encourage companies to take on apprentices is to increase their quality and relevance to business. If the quality is there then demand, from employers and potential apprentices, will naturally follow.
In order to increase the take-up among businesses, the government has to ensure that, when it comes to apprenticeships, the focus is on quality rather than quantity. Only then can we forge a credible alternative to the academic pathway, which businesses and young people can fully buy into.
Read also: SA's unemployment figures paint gloomy picture
In addition, at the moment TVETs and accredited training providers offer a network of support for apprentices. Without the right level of support, we risk seeing more young people dropping out of the system. We need to advocate an “earn-while-you-learn” incentive since skilled workers are increasingly in demand.
As part of meeting quality and completion numbers, the youth should not be disillusioned by the minimum requirements and technical aptitude tests.
The system should ensure that the right attitude and skills for learning a trade are determined upfront in the recruitment and selection process and that the employer is assured the right candidate will become a 21st-century artisan.
Need for artisans
The question, then, is: why should the youth choose an apprenticeship over an academic university pathway? It is evident, especially in manufacturing, that the economy desperately needs 21st-century artisans ranging from welders, electricians, plumbers, riggers, fitters to boilermakers, among many others.
Corporate South Africa, specifically the manufacturing and engineering sectors, have started addressing some of the real challenges around apprenticeships and artisan development to achieve quality artisans for the 21st century.
Without apprenticeships leading to quality artisans, our prospects for a growing economy and meeting the need to provide jobs for the millions of unemployed young people will remain depressing.
Apprenticeships and skills are becoming very attractive because of their demand and the high likelihood of getting a job upon completion.
Melanie Mulholland is the Human Capital and Skills Development Executive at Seifsa, which owns the Seifsa Training Centre in Benoni.
SEIFSA Training Centre Awards a Great Success
SEIFSA Training Centre Awards a Great Success
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At the annual prize-giving ceremony, learners were inspired to dream big by an executive through a powerful visual life story.
It was a day of recognition of excellence on the 25th of November 2016 during the SEIFSA Training Centre Prize Giving ceremony. To much attention interjected with applause, guest speaker Rajen Govender, Human Resources Executive Director at Weir Minerals, motivated learners with his own life story, which started in Chatworth, KwaZulu-Natal, culminating with his interesting career.
Govender encouraged the learners to grasp all opportunities they encounter no matter how big or small and use these to not only develop, but to work towards their visions and make their success go beyond what they could have ever imagined. He inspired the learners through his own visual descriptions to dream big and get out there and make it happen.
The SEIFSA Training Centre Awards are trophies and prizes presented together with a certificate of achievement to the best student in a specific trade as well as to the learner with the best progress made. “The SEIFSA Training Centre wishes to congratulate these learners on their achievements as pockets of excellence within their trades and to the companies who afforded them the prospect of a career,” said Desmond Uithaler, SEIFSA Training Centre Operations Manager.
For more information please contact:
Desmond Uithaler
Operations Manager
011 422 2500
011 422 2503 (Fax)
desmond.uithaler@gijima.com
Draft IEP Report and the IRP Assumptions and the Base Case Consultation Workshops – Timeframes
According to the DOE website, stakeholders are invited to comment on the Draft IEP Report and the IRP Assumptions and the Base Case through the consultation workshops and or in writing to the Department. Comments received will be considered in preparing a draft final IRP Update which will be submitted to Cabinet for approval. Closing date for submitting written comments is 15 February 2017.
Interested parties interested in making presentation at the workshop must register by sending an email with the presentation to IRP.Queries@energy.gov.za not later than 2 days before the consultation workshop.
Consultation workshops will take place as indicated below with venues to follow once confirmed:
- Gauteng: Johannesburg – 07 December 2016
- Kwa-Zulu Natal: Durban – 09 December 2016
- Western Cape: Cape Town – 13 December 2016
- Eastern Cape: Port Elizabeth – 14 December 2016
- Northern Cape – January 2017 (Exact date to be confirmed)
- North West - January 2017 (Exact date to be confirmed)
- Limpopo - January 2017 (Exact date to be confirmed)
- Mpumalanga - January 2017 (Exact date to be confirmed)
- NEDLAC - February 2017
For any queries regarding the IRP, contact the Department at IRP.Queries@energy.gov.za
Members are encouraged to participate in the consultation workshops. BUSA will prepare a written response with member inputs before 15 February 2017.
Draft National Qualifications Framework Amendment Bill, 2016 - request for public comment
Dear Member
The Draft National Qualifications Framework Amendment Bill, 2016, was published in Government Gazette no 40430 of 18 November 2016 for public comment within 30 calendar days of publication.
The aim of the draft Bill is “To amend the National Qualifications Framework Act, 2008 so as to provide for the substitution of the Long Title; to provide for the insertion of new definitions; to provide for the accreditation of private education institutions or private providers to offer qualifications or part-qualifications or any component thereof as contemplated in the principal Act; to provide for a separate register for professional designations; to provide for the formulation of evaluation criteria of foreign qualifications; to provide for the establishment of a register of fraudulent qualifications; to provide for the adherence of education institutions, employers and courts of law to the legal obligations to report fraudulent qualifications; to provide for the establishment by SAQA of a register of misrepresented qualifications; to provide for employers to be obliged to refer qualifications of employees to SAQA for validation and verification; to provide for transitional arrangements and for matters connected therewith.”
Comments can be sent to:
The Director-General
Department of Higher Education and Training Attention:
Adv. E Boshoff Private Bag X174 Pretoria 0001
Email: Boshoff.E@dhet.gov.za
Fax: 012 324 8230
Update on Unemployment Insurance Amendment Act
Kindly be advised that the Unemployment Insurance Amendment Bill was passed in the National Council of Provinces (NCOP) on 22 November 2016. The Bill was discussed at Nedlac during 2013.
In summary, the Bill contains the following aspects:
- Increases UIF benefits from 238 to 365 days;
- Increases maternity leave benefits to 66% , which will no longer be deducted from the mother’s unemployment insurance benefit;
- Covers workers who lost working hours due to reduced time at their work places;
- Includes public servants under the UIF, who will thus be covered in the event of dismissal , and includes women who had miscarriages during the third trimester or a still- born birth;
- Allows the family and/ or nominated beneficiary of a deceased claimant to receive their benefits;
- Prohibits the charging of fees by any party (e.g. agency) to a UIF claimant for helping them submit their claims.
The process to pass this legislation is long overdue. SEIFSA is pleased with the adjustments to the structure of the UIF benefits, such as maternity leave improvements, longer claim periods for the unemployed, and fewer restrictions for beneficiaries to access unemployment insurance.
Kindly find the Unemployment Insurance Amendment Bill attached for your information.
BBBEE Legislation
REVISED BROAD-BASED BLACK ECONOMIC EMPOWERMENT (B-BBEE) CODES OF GOOD PRACTICE
Cabinet noted the revised B-BBEE Codes of Good Practice 2012 and approved that these be published for public comment. The comment period closed in December 2012.
The revised Codes will enhance the implementation of B-BBEE in a meaningful and sustainable manner, and contain principles and guidelines that will facilitate and accelerate the implementation of B-BBEE. The purpose of the Codes is to assist and advise the public and private sectors in the implementation of the B-BBEE Act.
General Legislation
General Legislation
National Water Amendment Bill
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Customs Fraud and Illegal Imports Bill
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Protection of Personal Information Bill
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Standards Quality Accreditation Metrology bill
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Preferential Procurement Regulations
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Cooperatives Amendment Bill
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