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Page 1

Your Source of South African Current Affairs

3rd Issue











Contents Institute for Futures Research

IFC & 1 2&3

National Institute for Occupational Health Expatweb – Expatriate Management Network Coccoon Network

5 6&7

Message from the Publisher


Manufacturing Indaba


Institute for Futures Research - The influence of emerging trends on jobs in manufacturing 10-11 Institute for Futures Research - Trends shaping the near future of manufacturing in South Africa 12 Institute for Futures Research - A cheat-sheet to the Internet of Things in Manufacturing Manufacturing Circle Invincible Valves Supplying various industries

13 14-15


Petroleum Agency SA – Explore South Africa 18-19 Petroleum Agency SA – By the Book


DesSoft – Engineering Design Documentation Future

Phoenix College makes its mark!


Teach the Future – The Future has arrived in Cape Town


South African Medical Research Council


Alcohol Breathalysers


Math Engineering


Almec Manufacturing


Naamsa – South Africa’s Automotive Industry A success story 38-41 Manufacturing Indaba – Untapped Potential 42-43 Sakhiwo Health Solutions




Futures Law Faculty


Upcoming events




Open Trade Training Centre - World Skills 1995-2018

DesSoft – Is Engineering Design Documentation still needed in the future world of Engineering? 23 University of Johannesburg - Transport and Supply Chain Management Programmes

USB Executive Education - Empowering leaders across Africa and beyond 25

56 & IBC







Message from the Publisher Recently at SONA, our President, Cyril Ramaphosa stated that to stimulate growth in the economy, build more businesses and employ more people, there was a need to find new and larger markets for goods and services. On the back of SONA, some have voiced their sentiment of uncertainty on how South Africa will achieve this growth and prosperity and of the future state of the South African economy. At SA Outlook we remain positive regarding the growth of the various sectors that this publication focuses on and we celebrate the successes of companies, sectors and industries highlighted in this publication. We are confident that our economy will grow through entrepreneurship and long-standing businesses who have persisted through difficult economic times and have adapted to changing technology. We continue to support local industry and sectors and endeavour to keep you informed of changes and trends as they unfold as well as current affairs and in highlighting some

of the top players in these industries including events of interest to these sectors. These industries provide a major contribution to the growth of the South African economy and will continue to do so during the years to come. We wish to extend our thanks to our key partners, Institute of Futures Research and Manufacturing Indaba for making this possible. Our aim is to remain a key point of reference for informing you on developments in mining, technology, energy, tourism and education and other key businesses and sectors. SA Outlook’s competitive rates, provides you with a unique platform that will enable you to reach a broad audience with a focus on key distribution points to reach the right audience, future potential clients and businesses that are aligned to your needs and requirements. We endeavour to continually expand our distribution to include government, public entities and entrepreneurs, particularly in these spheres.

Publisher: Emile Polman

Dynasty Publishing (PTY) LTD P.O Box 5071 Blue Downs 7105 Tel: +27 (0) 81 029 7247 Email: info@dynastypublishing.co.za Website: www.dynastypublishing.co.za

Finance & Administration Manager: Lynne Polman Business Development Manager: Anthony Botha Production Manager: Tracy White Research & Database Analyst: Sherazaun Johnson Design & Layout: Sonya Collison Printers: Durbanville Commercial & Digital Printers www.dcprinters.co.za 8

We look forward to bringing you the next issue of SA Outlook and thank you for your continued support. Best wishes,

Emile Polman Managing Director Dynasty Publishing (Pty) Ltd

Disclaimer All rights reserved. No part of this publication may be reproduced, in any form or by any means without the Prior written consent of Dynasty Publishing (Pty)Ltd, Reg.No 2018/086878/07. While every care has been taken when compiling this publication, the publisher and contributors accept no responsibility for any consequences arising from any errors or omissions.








South Africa is at a crossroads. After more than

government must actively intervene for there to be

two decades of democracy and the failure of

any hope of establishing a virtuous cycle of inclusive

well-intentioned economic policy to lift the major-

growth. SA is facing tough competition, contend-

ity of our people out of poverty, something radical

ing with other nations on the continent in a way

needs to be done to create jobs and grow the

that it never has before, with lucrative and attrac-

economy. We need to align the nation towards a

tive investment incentives offered by countries with

common goal of creating jobs.

comparable risk profiles and higher growth rates. SA

Manufacturing, with its strong multiplier effects

can no longer rely on being the default entry point

on value addition, job creation, export earnings

for foreign investment into the African continent.

and revenue generation, is the one sector in the

Now, more than ever, there is a unique opportunity

economy that has the potential to create these

to secure significant economic transformation.

jobs. But its positive contribution is under threat

There are three key demand-side interventions

and declining. Since the 2008/9 financial crisis

required. Firstly, increasing aggregate domestic

when almost 400Â 000 South African manufactur-

demand. This includes getting all South African

ing jobs were lost, the industry has not been able

businesses and government institutions to commit

to recover to those levels and we currently have

to visible support for Proudly South African, increas-

300Â 000 fewer manufacturing jobs than in 2008.

ing the procurement of locally manufactured goods,

SA has fallen into a vicious cycle of de-industri-

provided that cost and quality are competitive. Re-

alisation and spiralling unemployment rates, even

tailers should ensure clear labelling of SA products

when the balance sheet reflects the capacity to

so that consumers can choose to buy local. As Gov-

invest. To escape the trap of jobless stagflation,

ernment increases the renewables component of




Creating additional demand for local goods is the key to a virtuous cycle that promotes economic growth Demand

...which leads to higher demand


• Stimulate demand for local goods - preferential procurement and Proudly South African • Protect local industries through more assertive trade policies

Capacity utilisation

...which leads to more jobs, more training


...which boosts investor confidence • sustained demand growth • policy certainty • supportive regulation • competitive incentives and fiscal policy • competitive returns • more economies of scale to compete for exports

electricity procurement, solar and wind generation

Thirdly, the country can learn from India and

equipment should be manufactured in SA. One of

China in enhancing our export competitiveness

our recommendations to Government is to recon-

by implementing similar policies and incentives for

sider administered prices to put more money back

manufacturing, for example reducing port tariffs,

into the pockets of consumers. For example, fixing

improving port efficiency and re-instating rail sub-

a maximum price for petrol (while retaining the ban

sidies for export containers. The successful Motor

on self-service) will encourage competition, lower

Industry Development Programme could be dupli-

fuel costs and could add up to R1.8 billion a year

cated for key industries, such as secondary steel

to disposable income, and reduce transport costs


across value chains.

Given significant underutilised capacity, the ef-

The second is that active pursuit of import sub-

fect of the interventions will be to slow down the

stitution, within WTO rules, should characterise

rate of job losses and de-industrialisation, before

our trade policy with explicit support for South

real growth is observed, and new jobs are created.

African industry. The ITAC mandate should be al-

In this ramp-up period, little new investment can

tered to support South African industry. [MITI

be expected. It is only new demand that will create

type approach]. Government and business should

new factories and new jobs, and it is only through

promote more collaboration between producers

the more competitive supply of input costs, better

across value chains on a vertical basis (eg from up-

skills and more coordinated policy interventions

stream to downstream in a single value chain such

that manufacturing in turn can be competitive.

as iron ore, to steel plate, to steel widgets) to en-

South Africa has new leadership, strong

hance in-country value addition, particularly in the

companies, many committed people and solid

agro-processing, platinum, manganese and steel

infrastructure, if adequately enabled can drive

value chains.

growth, employment we so desperately need.




Supplying various industries When we talk about business in

sive range of valves and covers a

Advice to entrepreneurs

Africa, the thing that we visual-

broad spectrum of low pressure

Finally, armed with a five-year

ise first is mining – the backbone

valves and prides itself on excep-

plan, with a new age manage-

of the economy of many African

tional customer service, offering

ment system with family values,

countries. In Africa, it is not only

many ancillary services as in rub-

under the guidance of corporate

the biggest greatest catalyst of

ber lining of pipes, fittings and

governance with a full board

development in multiple nations

valves along with reconditioning

of directors, one non-executive

of the continent, but also an

of valves. Our passion drives our

director and two independent di-

extraordinary source of employ-

on-going innovation of industry

rectors, Invincible Valves are now

ment and global trade exchange.

solutions including manual and

implementing systems and con-

Breaking every odd to bring

automated valves in a variety of

trols which will be able to cope

positive winds of change in min-

packages. We offer a fully opera-

with current business growth

ing, Pam du Plessis, Managing

tional workshop on site for valve

and expansion. They are striv-

Director of Invincible Valves, a

repairs and or reconditioning,

ing for diversification within

well-established company that

along with a fully operational

the business, expanding their

distributes valves of its own as

rubber lining division on valves,

markets, adding additional an-

well as on behalf of the biggest

pipes, fittings and tanks.

cillary services and products range, directed to the mining,

manufacturer in South Africa. What drives this Innovative

petro chemical, power genera-

tion to the industry has helped

Women Entrepreneur?

tion, water, sewerage, gas works



Pam gives huge credit to her

and general industries which will

and recognitions including the

father and her three beautiful

enhance customer experience


children is what drives her mo-

and business expansion

Women of the Year Award, Mov-


throughout Africa and beyond.

ing Mountains 2017, among

achievements and recognition

many other.

from global organisations and


extraordinary earn

numerous 2017





her passion drives her to make Innovative Valve Company

an impact in people’s lives

Invincible Valves has almost 4

through the establishment of

decades of rich experience in

a fully equipped Education &

distributing, manufacturing, re-

Training Centre on the compa-

conditioning and rubber lining

ny’s premises to offer courses

valves. Over the years the com-

through SAVAMA along with

pany has introduced its own

ABET training, Basic Business

registered brand of INVAL valves

Skills, Life Skills etc for its staff,

which has led to a comprehen-

interns and local community.










By the book Driving South Africa’s booming gas sector while ensuring a well regulated and responsible environment is a key mandate of Petroleum Agency SA PETROLEUM Agency SA plays an important role in developing South Africa’s gas market by attracting qualified and competent companies to explore for gas in the country, as well as monitoring and regulating their activities. In addition to ensuring operators always comply with the law, a major area of focus is increasing the inclusion of historically disadvantaged South African-owned entities in the upstream industry. South Africa needs large discoveries of indigenous gas as well as fair access to opportunities and social licence to develop a healthy gas market. Currently, natural gas supplies about just 3% of South Africa’s primary energy. A significant challenge facing the development of a major gas market in South Africa is the extreme dominance of coal as a primary energy source, and industry’s historic reliance on coal-generated electricity. A lack of extensive gas transport and reticulation infrastructure goes hand in hand with this, while other challenges include uncertainty about volumes of indigenous gas available to industry; security of supply; switching and conversion costs; gas pricing; and negativity around the ongoing use of fossil fuels. After all, end users require certainty before committing, while explorers look for a guaranteed market. On a more positive note, however, opportunities for gas lie in the realisation of South Africa’s National Development Plan (NDP) and the Integrated Resource Plan (IRP). Both call for indigenous hydrocarbons – conventional and unconventional – and independent power production to play an increasing role in the nation’s energy mix.


The national power utility also intends to replace coal-fired power stations with gas-fired counterparts, in line with the vision of the NDP. The advent of gas-fired power stations will represent a ready, indigenous market for operators that make discoveries of gas in South Africa, ensuring it will be far easier to monetise smaller discoveries that may otherwise have remained undeveloped. As stated in the NDP, the government’s intention is to ‘enable exploratory drilling to identify economically recoverable coal seam and shale gas reserves, while environmental investigations will continue to ascertain whether sustainable exploitation of these resources is possible. ‘If gas reserves are proven and environmental concerns alleviated, then development of these resources and gas-topower projects should be fasttracked’. The plan also calls for the need to incorporate a greater share of gas in South Africa’s energy mix, through importing liquefied natural gas (LNG); using shale gas if reserves prove commercial; and developing infrastructure for the import of LNG, mainly for power production, over the short to medium term. Meanwhile, the proposed update of the IRP envisages greater prominence of gas in the energy mix, accounting for 16% or 11 930 MW of the installed capacity mix by 2030. An additional 8 100 MW of capacity will be sourced from gas. The IRP calls for a detailed analysis of gas-supply options.

Gas also has the potential and flexibility to be used as a bridging fuel in the move from coal and oil to renewables as primary energy sources. Rapier (2018) reports that this is already the case in the US where, over the past 17 years, coal’s contribution to primary energy has fallen from 51% to 30%, while gas use has doubled. As custodian, Petroleum Agency SA ensures that companies applying for gas rights are vetted to make sure they are financially qualified and technically capable. Applicants also need to have a good track record in terms of oil and gas exploration activity, as well as regard for the environment. This applies to both local and foreign companies. Oil and gas exploration requires enormous capital outlay and can represent a risk to workers, communities and the environment. Applicants are therefore required to prove their capabilities and safety record, and must carry insurance for environmental rehabilitation. In addition, all planned activities can only be carried out after completion of an environmental impact assessment and


under an approved environmental management plan, after consultation with the public as well as interested and affected parties. Explorers are also required to contribute to skills development through the agency’s Upstream Training Trust. Oil and gas exploration in South Africa is regulated in terms of the Mineral and Petroleum Resources Development Act (MPRDA) of 2002, which stipulates that applicants for production rights are required to submit social and labour plans (SLPs) to assist in transforming the industry, promoting employment and advancing social and economic welfare in South Africa. Applicants must develop and implement, where applicable, comprehensive SLPs that cover human resources-development programmes, community development, housing and living conditions, and employment equity. In addition to the MPRDA, other acts also regulate the sector – including the National Environmental Management Act, the Royalties Act, the Mining Titles Registration Act and the National Water Act. These acts and regulations have served the upstream industry well and are all in line with international standards. Recently, however, Minister of Mineral Resources Gwede Mantashe and President Cyril Ramaphosa have stated that oil and gas exploration and production activities should have their own standalone legislation, separate from that applicable to hard mineral mining. This legislation is being drafted and the agency is part of the team at the Department of Mineral Resources working on it. Ensuring compliance with the law and mining regulations is another of the agency’s primary responsibilities. Failure by an operator to pay required fees, carry out agreed work programme activities or furnish the agency with the required reporting can lead to the revocation of a permit or right. Contravention of environmental legislation can result in substantial fines or imprisonment.

Under the MPRDA, operators may apply for a technical co-operation permit, which allows a year-long desktop study over the area of interest. After this, or if they are ready to commit immediately to undertaking a work programme, they may apply for an exploration right. This comprises four periods, the first being three years in duration, followed by three periods of two years each. Each period has its own negotiated work programme and relinquishment requirements. On making a discovery, operators may apply for a production right, which lasts for 30 years and can be renewed. The exploration right incurs an annual fee, while production will be subject to royalties at a minimum of 0.5% and a maximum of 5%. Income tax of 28% is also payable. The MPRDA requires state participation at the production stage, while 10% must also be made available on commercial terms for participation by BEE companies. Currently, in preparation for the new legislation, Minister Gwede Mantashe has declared a moratorium on the acceptance of new licence applications and any licensing will be by invitation or during a licence round only. Around 19 applications made prior to the moratorium are under consideration, together with a number of conversions from technical co-operation permits to exploration rights. Earlier this year, a significant gas discovery off the coast of South Africa was made by Total and its exploration partners, Canadian Natural Resources, Qatar Petroleum and Main Street, in a position about 175 km offshore to the south-east of Mossel Bay. The well position is in a water depth of nearly 1 500m, directly in the path of the Agulhas current. The successful drilling of this prospect represents an unprecedented engineering feat. Total has reported the discovery of gas condensate


with a reservoir net pay thickness of 57m being intersected. ‘It is extremely gratifying that the first well drilled offshore in over a decade by an international oil company has had this very exciting result,’ according to Petroleum Agency SA. ‘The well hasn’t been tested for flow rates, and Total has not released any figures regarding the size of the accumulation. However, as Total states, this discovery opens up a new world-class oil and gas play for South Africa, and there are several other prospects in the area that look very similar to the discovery.’ Total and its partners recently completed the acquisition of a 3D seismic survey over the area that will assist them in further exploration and appraisal. The challenging operating conditions will also play a part in the eventual determination of the commercial viability of development. The recent gas condensate discovery by Total has certainly put South Africa on the map. While there are already many international operators active in South Africa, the results of future licence rounds will provide a good indication of the direct effect.

PO Box 5111, Tygervalley South Africa, 7536 +27 (0)21 938 3500 www.petroleumagencysa.com










Phoenix College makes its mark! Founded in 1994, Phoenix College has provided quality education at an affordable cost. Today it is one of the best “low fee independent schools” serving the lower socio economic group of previously disadvantaged learners. It was recently mentioned in “Hidden Assets”, a report by the “Centre for Development and Enterprise” sponsored by the Templeton Foundation in the U.S.A. Phoenix College has made its mark as a valuable and integral part of the community by obtaining many remarkable achievements academically, athletically and recreationally, including obtaining 100% matric pass rate since 2008.

It has also been pointed out at meetings of the Gauteng Education Portfolio Committee held at

The need for Independent Education

the Gauteng legislature that not only do indepen-

Both the Constitution of the Republic of South

what they would have paid to educate a learner

Africa 1996, as well as the South African Schools

in a public school, while costing parents less to

Act 84 of 1996, identified the essential role that

send their children to these schools than to former

independent schools would need to play in order

model ”C” schools, but that independent schools

for the national education strategy to be achieved.

in the province have during the period 2009 to

As it is foreseen that the state would not be able

2017 often achieved a higher average matric pass

to provide the total education needs of the coun-

rate than that achieved by public schools.

dent schools cost the state less than one third of

try at the required level for the foreseeable future, independent schools will continue to play an important role in providing quality education. Many independent schools were started during

The Founding and Development of Phoenix College

the previous dispensation in order to assist with the

Fred Boltman, a retired engineer, used his sav-

education of disadvantaged learners who were not

ings, insurance payouts and pension payout to

catered for at that time. Beyers Naude High School,

found Phoenix College in order to empower the

previously located in Braamfontein, was an exam-

community by supplying quality education at an

ple of an independent school that was established

affordable cost to historically disadvantaged learn-

to respond to this need. When Beyers Naude High

ers from the poorer socio economic classes. The

School closed, the learners were accommodated

Phoenix in Greek mythology was a bird that died

by Phoenix College as a result of a recommenda-

in flames. Out of the ashes, a baby bird was born.

tion by the Gauteng Department of Education.

In 1994, the name Phoenix College was chosen to



be symbolic of the new dispensation that was arising out of the ashes. Phoenix College was born.


The Phoenix College Saturday School providess extra lessons to uplift learners from poorly perform-

Located at Happiness House, the school is con-

ing public schools in outlying districts. Since 1994,

veniently close to rail and taxi services, but the

the total learner base has grown to approximately

building may not be able to accommodate planned

1255 learners. The total full time staff complement

future growth. Phoenix College is engaged with

is 72 while the Saturday School and the Matric Re-

planning a second school for which the land has

write Centre have additional casual teaching staff.

already been purchased.

Phoenix College is fully BEE compliant.

The full time school caters mainly for learners that live in the inner city with some learners from Katlehong, Thokoza, Soweto, Alexandra and a few learners from outside our borders. In about 2006, however, Phoenix College took in 16 refugees from the DRC whose parents had been massacred in the war. They were fed, provided with uniforms and after they passed matric, they were united with family members that were traced overseas. Many of them obtained their degrees in Sweden, Canada,the U.S.A. and other countries.

What makes Phoenix College great! Co-operative and Excellent Management

Unique Educational Offerings

• Presented by the Gauteng Department of Education • Total commitment to Education • The Director has an open door policy

• SETA and other skills training courses in areas such as Entrepreneurship and Project Management • Computer / Mathematics lessons offered to learners from public schools

Caring for children • The “World’s Children’s Prize for the Rights of the Child” awarded to Phoenix College by a Swedish N.G.O. for the part played in re-uniting learners with their families in foreign countries • Numerous positive testimonials from parents • Bursaries awarded to eligible children • Children who cannot get home are cared for

Excellent Education

Technology Oriented School • Offers the subject of Information Technology covering the Delphi programming language

Other Distinguishing Features • Counseling on subject and employment choices to Grade 9 and Grade 12 learners • Zero tolerance for drugs and alcohol • Good discipline

Empowering the community! 27


















A pioneering and collaborative institution that conducts and funds research that responds to the top ten causes of mortality in South Africa. We aim to, through innovation and technology strategies, address the four colliding epidemics experienced by people in South Africa.

The increasing trend in maternal mortality was reversed in 2010 and Maternal Mortality Rate reached 152 per 100 000 livebirths in 2015 Under 5 Mortality Rate has declined from 80 per 1000 livebirths in 2003 to 34 per 1000 livebirths in 2016 Neonatal conditions, HIV/AIDS, diarrhoeal disease and lower respiratory infections/ pneumonia need to be addressed to reduce child mortality further


Non-communicable diseases, as a group, now account for the highest number of deaths in South Africa

Cardiovascular conditions are the leading category of non-communicable disease deaths in South Africa accounting for 19% of deaths in 2012

Essential to address leading risk factors for noncommunicable diseases i.e. smoking, alcohol, physical inactivity and diet and provide primary healthcare to manage them


Marked changes in mortality have been experienced with declines corresponding with the roll-out of ART and the earlier PMTCT intervention - 153 000 people died from HIV/AIDS in 2012 compared to 300 000 in 2006 HIV/AIDS remains the leading cause of death * efforts to provide access to treatment must be enhanced * prevention efforts must be strengthened, particularly among young women SA is estimated to have the biggest TB burden in the world - a sizable number of HIV/AIDS deaths are associated with TB


• Interpersonal violence and road traffic injuries account for considerable premature loss of life - inter-sectoral actions are needed to change norms in society and build social cohesion •

52% reduction in death rate from interpersonal violence (homicide) between 1997-2012, accompanied political stabilisation in the country, and Fire Arms Control Act of 2000 However, homicide rates in South Africa remain much higher than the global average


www.samrc.ac.za 34





A professional engineering


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Our engineers are professionally registered with the Engineering

in 2010 comprising diverse

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expertise in Electrical and

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tioning (HVAC) systems

including structural earthing

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tems design and installation

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(i.e. conveyor belts anf fluid

tenance (buildings and

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ENERGY AND DEMAND MANAGEMENT • Energy efficiency and demand management • Measurement and verification of energy savings

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• Alternative energy solutions (renewables - solar PV, CSP, CPV,

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biomass, co-generation



A world-class solution for all

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South Africa’s automotive industry – a success story In South Africa, the automotive industry continues

automotive industry’s contribution to the GDP

to reflect the power of combining good industrial

stood at 6,8% (4,3% manufacturing and 2,5%

policy and foreign investment, and is not only the

retail). In addition, investments by the seven ma-

backbone of the industrialisation drive in South

jor OEMs in the country amounted to a further

Africa but is also key to ensuring greater econom-

substantial R7,2 billion in 2018, along with the

ic growth. Manufacturing-driven growth has the

investment of R3,5 billion by the automotive com-

highest impact on job creation. Furthermore, with

ponent suppliers. The total automotive revenue

its linkages throughout the economy, the country’s

in the ambit of the automotive business sphere in

automotive industry is a turbo-charged engine for

South Africa amounted to R503 billion in 2018.

the manufacture and export of vehicles and automotive components to world markets.

The direct value-addition impact of the automotive industry on the South African economy is

In 2018, the export of automotive products

multiple times the level of support it receives from

reached a record amount of R178,8 billion, equat-

government, most of which is paid in the form of

ing to 14,3% of South Africa’s total exports. As

duty rebates, rather than direct fiscal costs. The

the largest manufacturing sector in the country’s

following table h highlights the significant social

economy, vehicle and component production

and economic contribution made by the domestic

accounted for 29,9% of South Africa’s man-

automotive industry in the context of the South

ufacturing output in 2018, while the broader

African economy for 2017 and 2018.

Key performance indicators under the APDP – 2017 to 2018 Indicator

Performance 2017


56,52 million

57,73 million



R4 653,6 billion

R4 873,9 billion

Broader automotive industry contribution to GDP



Vehicle and component production as % of South Africa’s manufacturing output



Average monthly employment by vehicle manufacturers

30 050

29 855

Automotive component sector employment

80 000

80 000

Population Consumer Price Index (CPI) South Africa’s GDP (current prices)




Capital expenditure – vehicle manufacturers

R8,2 billion

R7,2 billion

Capital expenditure – component sector

R4,0 billion

R3,5 billion

Total South African new vehicle sales

557 703 units

552 226 units

Total South African vehicle production

601 338 units

610 854 units



South Africa’s global vehicle production ranking



South Africa’s global vehicle production market share





Vehicle parc (Number of registered vehicles)

12,21 million

12,46 million

Total automotive export earnings

R164,9 billion

R178,8 billion



Number of export destinations



Number of export destinations with export values more than doubling year-on-year



Top automotive country export destination in rand value terms



Total South African vehicle exports

338 096 units

351 139 units

Value of vehicle exports

R114,6 billion

R127,4 billion

Top vehicle export destination in volume terms



Value of automotive component exports

R50,3 billion

R51,3 billion

Catalytic converters

Catalytic converters

Top automotive trading partner (imports and exports) in rand value terms



Top automotive trading region (imports and exports) in rand value terms



Top country of origin for total automotive imports in rand value terms





South Africa’s vehicle production as % of Africa’s vehicle production

Vehicle ownership ratio per 1 000 persons

Automotive export value as % of total South African export value

Top automotive export component category in rand value terms

Top country of origin for vehicle imports

Source: AIEC, Econometrix, NAAMSA/Lightstone Auto, NAACAM, OICA, SARS, StatsSA




The automotive industry in South Africa is a success story owing to the partnership between government and the sector to develop the industry. The automotive industry is a crucial job creator in the country’s economy and makes a significant contribution to the South African economy as a whole in terms of GDP, employment, compensation, government revenue, exports and capital investment. It is encouraging that in spite of domestic and foreign economic headwinds, the seven OEMs have made investment commitments of R40 billion over the next five years. Investment at this scale is significant and will promote local value-addition, with almost R25 billion expected to be invested in domestically sourced components. The industry is therefore of key importance to the domestic economy, while the socio-economic contribution of the multinational corporations in the country is vital in contributing to the social upliftment of the regional communities where the industry is concentrated. It is encouraging that in spite of the domestic and foreign economic headwinds, the seven OEMs have made investment commitments of R40 billion over the next five years. Investment at this scale is significant and will promote local value addition, with almost R25 billion expected to be invested in domestically sourced components. The industry is therefore of key importance to the domestic economy while the socio-economic contribution of the multinational corporations in the country is vital in contributing to social upliftment of the regional communities where the industry is concentrated. Government’s announcement of its commitment and support post-2020 provides an attractive proposition to global OEMs and their suppliers to realise the aspirations of a significant expansion in vehicle production volumes, much higher levels




of localisation, along with substantial employment

body for the South African automotive industry’s

growth and the transformation in the domestic

export promotion and development activities, and

automotive industry.

represents an important link between the industry

NAAMSA represents the collective, non-com-

and the Department of Trade and Industry (Dti).

petitive interests of the new vehicle manufacturing

The AIEC represents the interests of seven major

industry in South Africa and comprises 20 compa-

motor vehicle manufacturers/exporters, namely,

nies involved in the production of passenger cars

BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyo-

and commercial vehicles which collectively employ

ta and Volkswagen, as well as 13 manufacturers/

in the order of 30 000 people. NAAMSA also rep-

exporters of trucks and buses, and about 500 au-

resents the interests of a further 21 companies

tomotive component suppliers in South Africa.

involved in the importation and distribution of

Businesses need a strong collective voice to do

new motor vehicles in South Africa. The monthly

business in domestic and global markets. Represen-

NAAMSA/Lightstone Auto new vehicle sales re-

tation at the highest levels, when new legislation

ports and other data products are not only used by

is introduced or when changes to legislation may

automotive industry professionals but also by vari-

impact on businesses’ ability to do business or to

ous government departments and analysts looking

protect their investments, is imperative. The auto-

to assess the financial health of the country. More

motive industry bodies in South Africa have a track

information on NAAMSA and its activities can be

record of making a difference and promoting the

accessed at www.naamsa.co.za.

concept of unity, whilst affording members the op-

The Automotive Industry Export Council (AIEC)

portunity to shape important decisions.

was established in 1999 and serves as the umbrella

Dr Norman Lamprecht Executive Manager NAAMSA (National Association of Automobile Manufacturers of South Africa) AIEC (Automotive Industry Export Council) Tel: +27 12 807 0086 / 0152 Fax: +27 12 807 0481 Mobile: +27 82 829 1692 E-mail: norman@naamsa.co.za











Manufacturing Trends and Shifts – Providing the foundation of Futures Manufacturing Possibilities Before reading this editorial I would like you to

the horizon and responding to them accordingly,

think about when you last: used a map book or

failing which may result in an expensive business

wrote down directions to a place you had not

failure or market share loss. Consider what hap-

been before; used the Yellow Pages to find a ser-

pened to the following well known businesses:

vice provider; memorized a telephone number;

• Kodak were the leaders in the photographic

bought a CD or Record which you could hold in

film industry and even developed the first digi-

your hands to add to your CD or record collec-

tal camera as far back as the 1970’s, which they

tion proudly displayed in your home; phoned the

did not pursue as they did not see digital pho-

cinemas to find out about show times; searched

tography as a disruptive technology and thus

for and cut pictures from a magazine or similar

missed the digital revolution, choosing to rath-

printed media for which ever purpose; printed the

er focus on their successful film industry.

photographs of your latest family gathering or

• Blockbuster was one of the biggest video rental

holiday trip and stuck them in a photo album to

agencies during the early 2000’s when Netflix

display on your coffee table or even merely just

was just starting up. The owner of Netflix even

looked up the meaning or spelling of a word in an

approached Blockbuster with a proposal to

actual dictionary.

collaborate with Blockbuster, with Blockbust-

In all likelihood you have not done any of the

er advertising Netflix in their stores and Netflix

above recently, rather making use of Google maps

running Blockbuster online. The CEO of Block-

or a similar GPS app on your Smart or Android

buster however said that Netflix was a fad and

phone to direct you to where you have not been

for niche businesses, providing that their suc-

before and used your internet enabled mobile

cessful business model had not failed them yet

phone ; tablet or computer to look up service pro-

and that customers liked coming into a store to

viders, telephone numbers, movie show times,

physically choose and collect a movie to watch.

meanings of words and project related images

• Sony similarly were at the top of their market-

and family photographs, the latter which is neatly

ing game with the Walkman which was hugely

stored in a folder titled “Family Photographs“ on

successful during the 1980’s. Sony however

a cloud somewhere, where it will stay indefinitely.

decided not to take note of the changing land-

The above serves as a clear example of how the

scape and MP3’s being introduced into the

future can change what we thought would always

market and the software of the iPhone, which

be fixed, certain or permanent. It also illustrates

allows you to carry your substantial music col-

the importance of being aware of changes on

lection with you anywhere, with the result that




many university students of today do not know

5. New entrants are no longer limited to other

what a Walkman is, let alone what it looks like.

manufacturing companies but to competitors

These well-known corporates succumbed to the

from other industries as well, in particular the

“Success Trap”, failing to innovate in an ever

tech industry as technology companies are

changing business environment. Technology has

becoming increasing involved in the manu-

resulted in new manufacturing trends:

facturing – by means of developing software

1. It is more about accessing information, creativ-

for smart products and becoming involved in

ity, capturing value and experience as opposed

developing the product themselves.

to physical products, for example: Netflix, Uber

6. Market pressure, increasing costs and ease

and AirBnB – neither is about a physical prod-

by which new entrants can enter the market

uct, rather capturing value and experience.

means that bigger manufacturer’s are feeling

2. The designation between product maker, prod-

increased pressure and may have no option

uct manufacturer and consumer is becoming

other than to fragment their bigger depart-

increasingly distorted due to easily accessible

ments in order to scale down and survive.

and cost effective software programmes and mobile apps that allow the customer to design

The above trends arise out of subtle shifts in

and produce their own products.

the dynamics of four areas of manufacturing:

3. There is a shift away from “build to stock” to “build to order”

1. Consumers demand

With the advances in AI and related manufactur-

Consumers are no longer demanding expert or

ing technologies, business structures following the

skilled manufacturing skills but rather are increas-

traditional, known “Making to Sell” business mod-

ingly seeking customized, personalised, creative

el is no longer viable as the supply chain toward

products that can be created with ease and in a

the consumer is becoming shorter and shorter.

very short period of time.

The Consumer him/herself is more frequently the

Digitization and the Internet have now made

designer, manufacturer and consumer, all rolled

it possible for the consumers to be involved in the

into one. It would serve the manufacturer better

design and manufacturing of the product them-

to rather than sell to an intermediary, to sell direct-

selves. Customer demands are generally met by

ly to the customer following customer design and

mobile Apps which allows them to themselves act

specifications as set out in an order placed with a

as the designer, manufacturer and then customer.


Pinterest provides creativity, inspiration and ideas

4. Advanced AI tools, such as mobile apps and in-

for products that can be produced with relative

ternet software programmes make it easy for

ease and DIY processes, in addition to software

new entrants to enter the manufacturing mar-

products such as ORMS or interactive company

ket– their small size may provide nimbleness to

websites such as Rapid Studio, both which allow

adapt to market forces faster and easier than

for the manufacturing of the product with ease

bigger manufacturers, who have large capital

and substantial speed without the consumer ever

assets that are not easily movable.

having to even leave their house.




2. Products

pictures with instructions on their designated

There is a shift away from tangible, physical objects

website. It is precisely with this new “After Life

to objects that provide service, value and access to

Sales”, that other manufactures teaming with app

information. The focus is less on the physicality of

developers are creating the most value – building a

the object itself and rather on the smartness of

basic app which allows for add-on’s and improve-

the product and how it relates to technology to

ments or greater access at an additional charge.

make the consumer’s life easier, more convenient,

Even Google is looking into soon launching a

providing access to information, value and expe-

so-called modular smartphone, which means that

riences. Uber, UberEATS and Airbnb are perfect

the user’s / consumer’s will be able to trade the

examples of the shift away from actual products

modular add-on’s that perfectly fit into the smart-

to services providing ease, convenience and access

phone– thus one day have extra battery and swop

to information, value and experiences.

it another day for better camera Lastly there is a reconceptualisation of products

3. Economics of Production

as services, thus a shift away from ownership to

The nature of products are changing from life-

access, requiring a shift away from the business

less, objects to smarter, actively responsive devices

model of manufacturing to sell. Many products

that are compatible and can easily connect with

that were previously under or never used have

other devices in providing consumers with more

provided new business opportunities for the own-

convenient information, value and experiences -

ers of same, by permitting consumer access to

the added value is in its “smartness”. The more

and use of the product at a rental rate rather than

tech savvy, intelligent and responsive a device is

ownership as is the case with Airbnb.

the more data it generates, this being valuable information that can be profitably used in man-

4. Economics of Value Chain

ufacturing and service delivery. However, this

Manufacturing previously required substantial

gives rise to the question as to who will benefit

capital investment and the manufactured product

most from this newly vested value in the product

travelled through a long line of different inter-

– the creator, manufacturer, platform provider,

mediaries to reach the end user. However with

app builder or consumer. Manufacturers need to

technological advances today and the easy avail-

consider alternative, innovative ways of manufac-

ability of information, resources and means, there

turing to harness as much of this value as possible.

are an increasing number of smaller manufactur-

Manufacturers are increasingly providing for so

ers who are more tech savvy and as a result of

called “After life Sales” which is aimed at provid-

same find easier entrance to the manufacturing

ing add-on’s or modification of products previously

market without the need to invest substantial cap-

manufactured and bought by the consumer as an

ital and allow them to shorten the path between

additional income stream.

themselves and their consumers, thereby allowing

IKEA, for example , permit their customers to customise their own furniture products by “hacking” off their shelf furniture and then posting


for faster manufacturing processes, which translates into more sales and more value for them. Additionally, 3D printing, formally known as



addictive manufacturing, which entails using

for the more cost effective creation of existing

printer technologies in the production of goods /

and new so called “space age” materials, such as

products have also altered the economics of the

flame resistant Styrofoam; nanocrystalline cellu-

value chain.

lose, thermoplastic; carbon fibre, memory foam,

Although the 3D printer is mostly used today

optical coating and the like, manufacturers have

in the manufacturing of prototypes, constant ad-

easier access to same allowing for the production

vancements in tools and capabilities will soon have

of new and improved goods and products. As the

it manufacturing smaller items and units such as

advances in material manufacturing improve and

molds, patterns, jigs and fixtures.

increase, customized or specialised manufacturing

Robots are increasingly being used in perform-

will be accessible to more manufacturers and not

ing mundane, repetitive tasks that previously were

only limited to those that have the ability to with-

too small, variable and costly to automate, with

stand high material costs.

robots and similar robotic technology generally

The fact is that the rise of technology has led

being limited to tasks that required heavy lifting.

to a change from extracting value from natural

However, due to increasing advancements and

assets, to products being human made assets to

capabilities in robotics, including better and more

learning to create big assets - the world and the

flexible dexterity, robots are increasingly being

way of doing business has changed and we are

used to perform repetitive manufacturing tasks.

only at the trough of a flux of change, only just

An example of manufactures manufacturing robots to be used in manufacturing and similar

starting with the dawn of the Fourth Industrial Revolution.

business activities is the company called Dexteri-

As wisely said by Futurist Anton Musgrave, we

ty, who provide “... Robots-as-a-Service solutions

need to beware of and focus on the changing

for automating pick and place tasks in ware-

patterns, trends and forces shifting on the hori-

houses, logistics, and supply chain.” Similarly the

zon, just in our line of vision, which will serve to

robots provided by manufactures such as Rethink

shape the future of tomorrow and the context in

Robotics and OtherLab, providing for so called

which we conduct our business to stay ahead of

“Co- Bots” that can work safely and cooperatively

the curve to ensure we remain competitive within

with employees in the manufacturing process.

the futures context.

Robots are not set to take over all manufacturing processes within the immediate future,

Written by Kristi Erasmus -

however they are set to make manufacturing less

Academic Head at Futures Law Faculty

expensive with their cooperative personality and faster, cheaper, never ending work etiquette. Technological advancements have also allowed for better and slightly cheaper access to expensive manufacturing materials, that was previously only available to manufacturers involved in space craft design or the like. With technology allowing

www.futureslawfaculty.co.za 51



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SA Outlook 3rd Edition  

SA Outlook is a quarterly magazine which focuses on the current affairs and events within the South African arena. Our publication is aimed...

SA Outlook 3rd Edition  

SA Outlook is a quarterly magazine which focuses on the current affairs and events within the South African arena. Our publication is aimed...