Tag Archive | volvo

Auto sector leads investment, saysDTI

Benz and GM lead in auto sector…

lionel octoberIn presenting its annual budget report to the trade and industry portfolio committee, director general Lionel October of the department of trade and industry (DTI) listed one of the past year’s highlights as the investment of R16bn that had been attracted into the auto sector in South Africa.

Mercedes-Benz SA, he said, had raised its total investment in SA to more than R5bn by increasing in its local output to 100 000 units a year, creating 800 new jobs in the process. Furthermore, it busy starting production of its new C-Class which would go from 250 units to 420 units a day.  In the same sector, he said, General Motors SA, together with component manufacturer Tenneco SA, was now about to export catalytic converters to the value of R6bn.

Volvo and MAN join in

On the subject of transport generally and important to include because of localised content factors, he said, was the contract in concluded in the year under review with Volvo SA to provide 40 new buses for MyCiti bus routes in the City of Cape Town for is commuter network; with Mercedes-Benz SA for 134 buses for the next phase of Johannesburg’s Rea Vaya system and with MAN for 80 new buses for the Limpopo area.

Of note, October said, was the fact that the energy sector had seen progress with the start of the independent power producer (IPP) programme.  Significant progress had been made with a number of smaller IPP projects already.

Movies and milling

In a vastly different sector, parliamentarians were surprised to hear that the movie Long Walk to Freedom, costing R239m to make in SA, had been premiered and had grossed more than R23m already locally.

In agro-processing, DTI in collaboration with German milling plant manufacturers Bühler,  launched an innovative semi-portable maize milling plant known as Isigayo, as a pilot for entrepreneurial maize milling development.

Settling down

October claimed that in the clothing industry, which had experienced such bad times, the DTI clothing and textile competitiveness programme had “stabilised” the clothing sector.

Over forty applications involving R645m had been received with R77.7m already disbursed.   Under DTI’s production incentive programme in the clothing industry, nearly 800 approvals had been granted to the value of R2.2bn.  DTI estimated that in that sector so far 63,311 jobs had been saved and 8,459 created.

Of note during the year, DTI said it had designated Saldanha Bay as an IDZ with pre-feasibility studies completed for Tubatse in Limpopo and Upington in the Northern Cape.  Another four IDZs in outlying areas were being planned whilst an application for designation had been submitted to the Manufacturing Development Board in respect of Dube Trade Port on the East Coast.

Industrial focus areas

Of importance, October said, was the passing by Parliament in the last year of the Special Economic Zones Bill which will “take the IDZ principle into new territory enabling the creation of new industrial hubs to bring previously marginalised regions into the mainstream economy.”

On the domestic economy, Lionel October spent some considerable time reviewing the year in detail, most of which has been well covered in the media.  He noted that real GDP grew by an annualised quarter-on-quarter rate of 0.6% in the second quarter and the little growth had been led by government services, finance, real estate, business services, transport, storage and communication services.

The Marikana effect

Overall, the manufacturing sector had contracted by slightly more than 2 % in the second quarter of 2014 due to low production in autos, chemical products, rubber and plastics, glass and non-metallic mineral products, he said, but in an overall sense the contraction was mainly due to the prolonged strike in the platinum sector.

On the subject of legislation, October noted that the Lotteries Amendment Act and the Intellectual Laws Property Amendment Act, involving the protection of traditional knowledge, had been assented to and were awaiting implementation.

The National Credit Amendment Bill had been adopted by Parliament, he said, and a draft policy frameworks on IP and gambling had been developed. A new Licensing of Businesses Bill had been drawn up and public consultations conducted on the Liquor Act, with a new draft policy adopted.

Getting all in line

On trade matters generally, DTI reported that during the year under review SADC services negotiations had been undertaken, South Africa making initial offers on financial and communication services.  Steps were now to be taken, October said, “to encourage compliance by certain SADC members in terms of their commitments under the SADC trade protocol.”

Consensus had been reached in the year on the need for high level bilateral engagement within the Southern Africa Customs Union (SACU) towards more and better integration and SACU had now developed, with other countries, a number of partnerships and free trade agreements. Progress had been made to some extent with tariff negotiations, notably tariff offers to East Africa and Egypt.

Summing up he said the hosting of an Africa-India ministerial trade conference was underway and MOUs on economic cooperation had been tabled with Ghana, Benin and Nigeria. As far as Nigeria was concerned, a draft MOU specifically on automotive cooperation had been completed. Also commenced was the South Africa-Cuba agreement on economic assistance.

Lionel October noted with pleasure that DTI had been given the top ranking by business as the best performing national government department in SA.

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