Local manufacturing key to kick-starting economy
25 October 2019 | Web Article Number: ME201916870
By Sebastian Werner
IT’S easy to get distracted by the negative news headlines and to feel despondent about the state of the South African economy, but it’s no solution. To get out of this slump, we need action. And not just from government, but from businesses and individuals too.
As someone who runs a business, I know the pressures that come with it. My father started the company, Werner Pumps South Africa, which predominantly sells industrial jetting and vacuuming equipment, in 1988. More than three decades down the line, I feel a duty to keep his legacy going. I have a team of people working for the company that I want to keep employed, many of whom support their own families.
Sometimes, it would be easy to say, “Ah well, the economy is rough. We can’t compete with cheap imports. The government is not doing enough to stimulate local manufacturing,” and to throw in the towel. But, to play a part in creating a solution, it’s important that business owners do the exact opposite.
We need to dig in our heels and think positively: say “Let’s invest in our people’s skills and create jobs. Let’s prove that we can manufacture locally at a quality that cheap imports can never live up to. Let’s petition government to support us and engage with industry stakeholders to address wider challenges.”
Only if we do this do we have a shot at growing our businesses, which in turn grows the economy, which in turn improves job prospects and people’s quality of living.
This is why I believe so strongly in local manufacturing. The majority of our truck-mounted units are 100% locally manufactured, and where we do import certain components, we assemble locally. This not only ensures that we can keep an eye on every aspect of quality control, but that we are differentiated by our ability to produce and supply equipment of similar manufacturing quality equal to European standards, built to withstand tough African operating conditions. We can also transfer skills, develop our people and create job opportunities, as well as supporting our customers with products and services that allow them to grow their own businesses.
To back this up, we are ISO9001 certified. We are a Level 2 B-BBEE company, because we believe in our role in contributing to building a fair and equitable South Africa.
My call is to government and other business owners to do more to support local manufacturing. Our President, Cyril Ramaphosa, highlighted this in his 2019 SONA speech. He drew attention to his locally manufactured clothes, and called for South Africans to buy locally produced goods. I would argue that we need to go beyond this to look at potential policy interventions and incentives that ensure this becomes entrenched, particularly within sectors that support infrastructure development and maintenance – a critical element of a growing economy.
For example, if government is willing to consider duty protection for the local vehicle manufacturing industry, perhaps this could be extended to other sectors or niches. And addressing taxation compliance of imports would go a long way to cut down on under-declaring the value of imported goods, thus levelling the playing field for local manufacturers. Government support and incentives in recapitalising manufacturing industries and helping to create market access would also assist in sustainability.
Finally, companies – including both public and private sectors – should be examining their own procurement policies and seeking to support local manufacturing whenever and wherever possible, as well as looking at what they can do to stimulate the local economy, create jobs and be part of building a successful South Africa. If we all do our part, success is far more achievable.
Sebastian Werner is MD at Werner Pumps South Africa