Table of Contents 2
List of figures 4
List of tables 7
Executive Summary 13
SECTION 1: INTRODUCTION AND PROJECT OBJECTIVES 16
Introduction 16
Project Objectives 16
SECTION 2: INTERNATIONAL MANUFACTURING ENVIRONMENT AND THE IMPORTANCE OF SMMES 18
Importance of manufacturing – International experience 18
International importance of SMMEs 20
SECTION 3: THE MANUFACTURING SECTOR 22
Background trends to the SA manufacturing sector 22
Gross fixed capital formation in the SA manufacturing sector 27
Employment in the manufacturing sector 29
Imports and exports in the manufacturing sector 32
Forward and Backward Linkages in the Manufacturing Sector 36
Provincial Manufacturing Activity 36
Forecasting in the Manufacturing Sector 37
Manufacturing Sector by Enterprise Size and Employment Contribution 38
SECTION 4: POLICY & PROGRAMMES ON MANUFACTURING 45
Introduction 45
The New Growth Path 45
Policies at a Provincial and Local Level 49
Provincial and Local Economic Development Strategies 51
SECTION 5: MANUFACTURING SUB SECTOR ANALYSIS 93
The Agro – Processing Subsector 93
The Automotive Subsector 99
The Plastic Subsector 109
The Chemicals Subsector 116
The Textile Subsector 131
The Metals Subsector 136
Wood Product, Publishing and Printing 143
Furniture 150
SECTION 6: RELEVANT STAKEHOLDERS IN THE MANUFACTURING SECTOR 156
SECTION 7: TELEPHONIC PROFILING REPORT 164
7.1: Business Profiling 167
7.2: Awareness 180
7.3: Respondent Recommendations 186
SECTION 8: RECOMMENDATIONS AND POLICY INITIATIVES 188
Recommendations: Market Penetrations, Options and Strategies 191
Services and Product Market Sectors 193
Recommendations: Possible Working Relationships/Partnerships 194
SECTION 9: CONCLUSION 197
Figure 1: Share of Worlds manufacturing of the top 10 manufacturing economies in 2010 18
Figure 2: Trend in manufacturing output in the top 10 manufacturing countries (US$, constant 2005 prices) 19
Figure 3: Distribution of employment in the manufacturing Sector by Firm Size 21
Figure 4: SA sector contribution to GDP in 2010, with a focus on the manufacturing sector 23
Figure 5: SA sector contribution to GDP in 1993, with a focus on the manufacturing sector 23
Figure 6: Manufacturing sectors, contribution to GDP, constant 2005 prices (R million) 24
Figure 7: Labour productivity and nominal unit labour cost (2000 to 2011) 26
Figure 8: Percentage utilisation of production capacity in the manufacturing sector 27
Figure 9: Gross fixed capital formation in the manufacturing sector (1990 to 2011) 27
Figure 10: Formal sector employment in the manufacturing sector (2000 to 2011) 30
Figure 11: Year-on-year percentage change in manufacturing employment 31
Figure 12: Provincial manufacturing activity (1995 – 2010) constant 2005 prices 37
Figure 13: A forecast of the manufacturing activity (2011 to 2014 are forecasted values) 38
Figure 14: Share of income by enterprise size in the manufacturing industry, 2008 41
Figure 15: Share of employment by enterprise size in the manufacturing industry, 2008 43
Figure 16: Agro Processing Value Chain 93
Figure 17: The automotive supply chain 103
Figure 18: Plastic Market Sectors (% Polymer converted) 110
Figure 19: The Plastics sub sector supply chain 110
Figure 20: Percentage Contribution by Subsector to the Chemicals Industry 118
Figure 21: Designation of Respondent in the Business 164
Figure 22: Gender: Male vs. Female 165
Figure 23: Respondents Split by Province 165
Figure 24: Respondents Split by Manufacturing Subsector 166
Figure 25: Educational Qualification 166
Figure 26: The Number of Years in the Manufacturing Sector 167
Figure 27: Business Conditions – Improved or Deteriorated 168
Figure 28: Businesses that have Procured Government Business Split by Government Level 168
Figure 29: Percentage of Government Business Procured. 169
Figure 30: Percentage of Full Time Staff Employed at Profiled Businesses 169
Figure 31: Percentage of Part time Employees 170
Figure 32: Total Percentage of Business Owners / Managers Previously Employed in the Manufacturing Sector 171
Figure 33: Total Business Owners / Managers that Received Formal Training & Education 171
Figure 34: Attendance of trade fairs 172
Figure 35: Business Owners/Managers Belonging to an Industry Body/Association 173
Figure 36: Association to a Business Chamber or Network 174
Figure 37: Growth Opportunities in the Manufacturing Sector 174
Figure 38: Employment Opportunities in the Manufacturing Sector 175
Figure 39: Promotion of Growth and Employment in the Manufacturing Sector 176
Figure 40: Constraints facing SMME Businesses in the Manufacturing Sector 177
Figure 41: Challenges facing SMME Businesses in the Manufacturing Sector 178
Figure 42: Attendance of Trade Events 178
Figure 43: Seda’s Role in the Manufacturing Sector 180
Figure 44: Services Seda can Offer 184
Figure 45: Association and Industry bodies that Businesses belong to 184
Figure 46: Recommendation 186
Table 1: Manufacturing share of gross value added in the top 10 manufacturing countries and South Africa from 2004 to 2010 18
Table 2: Manufacturing, disaggregated industries and percentage growth between 1993 and 2010 (in constant 2005 prices) 23
Table 3: Annual Manufacturing production at current prices (R million) (2005 – 2010) 24
Table 4: Annual Manufacturing production at constant 2005 prices (R million) (2005 – 2010) 25
Table 5: Gross capital formation in manufacturing for 2007 – 2010 (nominal values) 27
Table 6: Employment output ratios (including informal sector) at constant 2005 prices by industry, 2001 to 2010 31
Table 7: Exports and Imports in the manufacturing sector (2010) 32
Table 8: Year-on-year percentage change in manufacturing industries and forecasted percentages for 2011 to 2014 37
Table 9: Percentage contribution of small and medium enterprises in the SA economy (2010) 38
Table 10: Income by enterprise size in the manufacturing industry, 2008 39
Table 11: Employment by enterprise size in the manufacturing industry, 2008 40
Table 12: Employment ratio per R1 million income per enterprise size in the manufacturing industry, 2008 42
Table 13: Subsidies and incentives received by different enterprise sizes from government in the manufacturing sector between 2006 and 2010 (in rand millions) 43
Table 14: Subsidies received by different enterprise sizes as a percentage of total turnover per year in the manufacturing sector between 2006 and 2010 43
Table 15: Vehicle brands that have manufacturing facilities in South Africa 98
Table 16: OEM’s which manufacture other types of vehicles and not LCV’s such as: 99
Table 17: above indicates the automotive component sales by product type from 2006 to 2010. 100
Table 18: List of major plastic sub sector manufacturers 111
Table 19: Business linkage opportunities for the South African Manufacturing sector 120
Table 20: End market segments 121
Table 21: Input-output table for SA for 2010 with reduced primary and tertiary sectors 200