Market Insight

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Sassda Acting Executive Director, Michel Basson recently participated in an event hosted by the South African Small and Medium Enterprise  Development Council where Sassda was asked to participate as a panel member to discuss the topic of ‘Economic Recovery and Sectoral Master Plans’. Here is a selection of questions and answers posed during the session relevant to our industry sector…

Q. If you have a master plan, has it been implemented yet and if yes, how has it been taken up by SMMEs?
A. The Steel Master Plan was signed on 11 June 2021, so it is still relatively new. The positive news is that it aims to streamline supply chain upwards from the fabricator and develop a demand side for steel and products of local origin. During the pandemic, many of our larger fabricator members were forced to downscale on employment numbers and as such, a number have moved from the member category of medium to small/micro- enterprises. That said, we do see opportunities for our SMME members in the Steel Master Plan, especially on a renewed drive for local content and localisation in general. We believe that the successful implementation of the Steel Master Plan will depend on the efficiency of industry associations to assist government by preparing their members to take part in its implementation and ensure that pertinent information reaches the relevant stakeholders. Sassda is ready to assist the rollout of the various initiatives in this regard.

Q. How could these master plans be implemented in rural and informal areas?
A. This is exactly where associations will play a crucial role in identifying, communicating, and connecting smaller members and rural members to the relevant bits of the Steel Master Plan. Like government, associations see the bigger picture. However, associations have of a better understanding of the plight and requirement of the smaller members. It is therefore our stance that stronger support from government to associations will be key to the efficient implementation of any Steel Master Plan initiatives.

Q. Is enterprise development featured amongst your members? Is it working? What is needed to achieve?
A. Enterprise development remains a goal of Sassda and its members. However, our members and ourselves can only be world-class through continuous improvement. We therefore constantly urge our members to improve “holistically”, meaning improvement not only in technical capacity and skill, but also in efficiency, profitability, and sustainable, ethical business practices.

Q. Is there enough support to facilitate access to markets? Any ideas what can be done to assist SMMEs to market?
A. Creating downstream demand for products is a major part of the Steel Master Plan. However, creating downstream demand is not good enough. Our fabricators and suppliers must develop in a manner that allows them to be globally competitive and export-ready. Once again, this is a ‘background’ issue that can be effectively addressed by industry bodies given the resources and mandate by government.

Q. Do you think blacklisting of small business owners is justified when external factors like government policy, market changes and catastrophic global events such as the COVID-19 pandemic happen?
A. This is a question with no simple answer. In some cases, blacklisting is justified when there was a contravention of legal and ethical rules. Other cases might have different causes like noncompliance or legal issues beyond the control of the business. In these cases, assistance can be given, but we must be careful not to throw good money after bad. Assist where assistance will yield the required results - not all businesses are viable.

Q. Could insurance or a dedicated fund assist with this?
A. Potentially, if administered and used in a planned and pragmatic way to the benefit of the industry and national goals.

Q. We always hear about red tape. Do you have any practical examples where your SMMEs are experiencing this bottleneck?
A. Red tape should be limited wherever possible but will remain with us for some time to come. The intervention of associations in this regard can
assist members since associations are facilitators. On the positive side, members report that the Western Cape provincial government is currently good at eliminating red tape in the province, so positive case studies do exist. Tax registration for new companies offers some challenges like various other bureaucratic regulations. It remains the role of associations to bring this to government’s attention and lobby for a mutually accepted solution.

Q. Do your SMMEs feel that they are truly supported (e.g., licencing, permits, small tenders) by the various government departments that they need to engage with?
A. No, especially international accreditation which is an expensive issue for our fabricator members. Some innovative action can be applied to
limit costs and facilitate our members becoming certified as global suppliers of quality and cost-effective products. There is space in the Steel Master Plan to address issues like this.

Q. Do SMMEs feel that certain sectors are being overlooked now in the early days of vaccine rollouts?
A. Most likely. Like medical staff and teachers, other groups exist as high risk areas. Salespoint staff at retailers, sales staff, petrol attendants and any persons interfacing with the broader public are exposed to risk. Many of these groupings are overlooked.

Q. What is uppermost on your members’ minds? Any comments from the ground?
A. Our members would like a clear plan and effective rollout. This is where associations must become both facilitators and translators between
ground level business and government. This is a crucial role and assistance should be channelled through proper association structures to the maximum benefit of the economy.