DOMESTIC manufacturing has received another boost with the Department of Trade and Industry (dti) yesterday announcing further designations for local production with minimum local content thresholds in terms of the public sector preferential procurement programme.
These designations involve valves, manual and pneumatic actuators, electrical and telecommunication cables and components of solar water heaters.
Sectors previously designated are rail rolling stock, power pylons, bus bodies, canned and processed vegetables, certain pharmaceutical products, furniture products, and the textile, clothing, leather and footwear sector.
The designation policy instrument is one of a suite of government policy levers designed to maximise support for domestic manufacturing while public procurement is one of the key industrial levers in the Industrial Policy Action Plan.
The department said yesterday that Trade and Industry Minister Rob Davies had signed the necessary authorisation for the latest designations in terms of his powers under the amended regulations of the Preferential Procurement Policy Finance Act.
National Treasury would in due course circulate the instruction notes, which would have minimum local content thresholds and regulate the environment within which government departments and public entities may procure designated products, it said.
The department expressed confidence that local production of designated products would help to stimulate aggregate demand and strengthen support for the domestic manufacturing sector.
Davies said his department would in the year ahead significantly scale up designations and other procurement policy levers in support of domestic manufacturing.
“This will be done at the same time as the dti deploys a range of other supportive and interlocking instruments to raise the competitiveness of South Africa’s manufacturers. This will be done in close collaboration with business and labour,” he said.
The department said details of these measures would be set out in the 2013 Industrial Policy Action Plan in April.
CBI Electric telecoms commercial director Miekie Dames said there were a lot of advantages to the designations.
“If Telkom, Eskom, Transnet through the signaling project, local municipalities and state-owned enterprises procured from the domestic industry, it will secure a base load for local manufacturers. This will mean we can sustain our employment but also then start to attack export markets and grow the industry,” he said.
He added that if the industry could secure a base of manufacturing, it would be able it to continue employing the many technical experts who had left Telkom.