Introduction
The manufacturing subsector analysis provides us with a detailed qualitative analysis of the subsectors that make up the manufacturing sector as a whole. This section of the report will provide the reader with an overview each subsector, a description of the activities present in the value chains as well as current and future opportunities for SMMEs in this subsector and an identification of constraints and barriers that SMMEs face within these subsectors.
The Agro – Processing Subsector
The definition of Agro-processing is the process or action taken by manufacturers of converting primary (raw) agricultural products into consumable commodities suitable for consumption.
The Agro – Processing process begins with the primary activity of agriculture whereby activities such as Farming, livestock, horticulture and forestry take place. Thereafter these “raw materials are supplied to manufacturers, who then begin the activity of processing the raw materials through actions such as Milling, Fermenting, Slaughtering, Blending, Cutting and Moulding. The manufactured products are then packaged and supplied to the wholesale and retail markets to be sold to consumers. See Diagram 1 for visual description.
Agro Processing is a widely diverse subsector and is vital to the production of food products as well as the processing of wood for furniture and paper products.
Value Chain Description of the Agro Processing Subsector
Figure 16: Agro Processing Value Chain
When looking at the different stages of the value chain of the agro – processing subsector it is clear that the area where SMMEs can operate in phase 3 (actual processing/manufacturing of raw materials) and phase 4 the packaging of processed products. SMMEs can also operate in phase 1 and 2 as suppliers of inputs, tools and fertilisers to the primary sector. SMMEs in the manufacturing sector could also be consumers of the processed products as inputs into other manufacturing activities e.g. Bakery use of flour, sugar, milk etc.
The Agro processing subsector could be a vehicle for potential job creation, the Agri-food complex has a number of competitive advantages making it an important trading partner and a viable investment destination as the world class infrastructure, counter seasonality to Europe, vast biodiversity and marine resources as well as competitive input costs make South Africa a world player on the worlds markets.
The Agro-processing/food processing industry consists of various subsectors including:
Meat processing
Dairy products
Fruit and vegetable processing
Grain mill products
Sugar mills and refineries
Wine
Fruit juices
Beer
Cocoa
Chocolate and sugar confectionery
Bakery products
Prepared animal feeds
Other food products/ ingredients:
Starch and starch products
Baby food
Chips
Baking powder
Yeast
Condiments
Mustard
Vinegar
Edible salt refining
Tea and coffee processing and packing
Tobacco
Essential oils
Leather
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