LOCALISATION HAS POTENTIAL FOR FAR REACHING BENEFITS
The South African Stainless Steel Development Association (Sassda) is playing a vital role in developing downstream opportunities for the local holloware sector as part of its key stakeholder representation role in the development of the government’s Steel Master Plan. The plan has seen the dtic focusing on developing opportunities for stainless steel, and prioritising the localisation of products. This has been wrought with challenges in sourcing products from abroad, thereby increasing the need for localising the manufacturing of stainless steel products.
Sassda Market Intelligence specialist Lesley Squires reports; “When the Steel Master Plan was first released last year, the stainless steel subsector received recognition for its work and the potential it offers the steel industry. Sassda’s role in the plan is aligned with its mandate, to promote the growth of the local conversion of stainless steel to the benefit of our members, industry, and the country. “Although there are a substantial number of stainless steel consumer goods available in the market, it was decided to put our focus into specific product types initially, with a view to sourcing from local manufacturers and ascertaining if the local pricing was acceptable to the clients.” She said some of the reasons for the retail sector looking at localisation are increased logistic costs, delays and closures of ports in the Far East, due to COVID-19, amongst others.”
WORK WITH MAJOR RETAILERS
Delving deeper into its current work for stainless steel and holloware manufacturers and distributors Squires reports; “Earlier this year we were approached by the dtic, who requested our assistance in helping local retail organisations to localise the manufacturing of their stainless steel consumerware goods.
“The dtic facilitated contact with the Massmart Group and the project got underway. After Massmart, we were joined in this endeavour by Shoprite/Checkers, the Lewis Group and Elite Star Trading Africa - a grouping of smaller retail outlets in the Cape.” Squires elaborates; “Holloware includes fabricated products such as pots, pans, cutlery and other similar utensils. We are therefore working with four major retailers to meet their specifications and align them with our members so that they can fabricate these products locally. Since it takes a while to identify product specifications and design, these products will only be available in the second quarter of next year.”
CHAMPIONING STAINLESS STEEL IN THE STEEL MASTER PLAN
Looking ahead, labour and industry stakeholders are forging ahead with the establishment of the stainless steel section of the Steel Master Plan, while government is facilitating the process. Squires reports; “There are numerous opportunities for increasing local demand for stainless steel products by creating demand for locally produced hollowware through discussions with local retailers.” “The required capacity from local stainless steel fabricators to meet this demand for hollowware does exist and there is enough capacity. What we need to do, is to buy and support South African-produced products. To achieve this there should be an aggressive drive on a united front,” Squires concludes. Sassda was a key partner at this year’s Manufacturing Indaba where the message from Department of Trade, Industry and Competition (dtic) Minister Ebrahim Patel was very clear.
“We are on the cusp of great renewal in local manufacturing that can drive increased output and competitiveness, what we call re-industrialisation.” At this leading manufacturing event in Sub-Saharan Africa, the focus was on the incredible role in what the South African manufacturing sector can play in the development of the renewable energy sector including opportunities such as electric vehicles.
POSITIVE OUTCOMES
There have been many positive manufacturing projects and initiatives rolled out across the continent according to Minister Patel. They have been in the pharmaceutical sector with a variety of product lines, the Dube Trade Port in eThekwini has opportunities for fuel cell production and commitments by global auto manufacturers such as Ford Motor Company and Mercedes Benz. Minister Patel warned, however, that individual firms may inflate their prices as they prepare for localisation opportunities and asked businesses to invest in ways to improve the competitiveness and dynamism of local firms.
“The government has now introduced reciprocal commitments attached to tariff increases or rebates of duties, which include commitments by affected firms not to raise prices,” said Minister Patel.