Date: 06/06/2003
Source: Ministry of Trade and Industry
Title: Hendricks: Opening of new evaporator plant
SPEECH BY DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, AT THE OPENING OF THE NEW EVAPORATOR PLANT, Collondale Cannery, East London, 6 June 2003
Chairman of Collondale Cannery, Mr Corder Tilney
Honoured Guests
Ladies and Gentlemen
I would like to thank you for giving me the opportunity to open your new world class Evaporator Plant that will be manufacturing pineapple concentrate. I am impressed with the commitment of Collondale Cannery to South Africa and East London and their investment of several million rand to expand their operations.
The business environment in South Africa has changed considerably over the past few years; this change has been necessitated by a number of internal and external factors. The South African economy in 1994 was in serious trouble. We had an inward looking manufacturing sector and economy that was extremely dependent on mineral and agricultural exports. There is no doubt that if we continued on this path we would have ended up in serious trouble as a country and an economy. We have seen the problems that many other African countries face that are dependent on a few products and have un-diversified economies.
It was therefore necessary for the government to lead South Africa down a difficult road in order to structurally change the South African economy. This resulted in a number of tough decisions for example, the reduction of tariffs, and ensuring that our incentives were World Trade Organisation (WTO) compliant, etc. The vision that we had in 1994 and one that still remains is that we want to grow our key sectors in our economy so that we are more diversified and less vulnerable to international shocks, grow our manufacturing, value adding and knowledge industries, and become more export orientated. The business community, labour and other sections of our society were unhappy about many of the decisions that we made, however we have seen that the business community has responded well to these challenges by structuring their operations, becoming more competitive and developing an export focus. We have also seen that labour has responded well to these challenges and productivity levels have improved dramatically over the years and there has been a substantial reduction in strike action.
The impact of these decisions and the response by business and labour has seen South Africa growing on average by 3% over the last few years and our manufactured exports have done extraordinarily well with on average 7% growth per year. Some of the consequences of our industries structuring, firms becoming more competitive and labour more productive has been substantial job losses taking place. This is a challenge that we are continually trying to find solutions to so that sustainable jobs are created in value adding sectors.
There are great opportunities in the export market and it holds a lot of potential for the South African economy in general and East London in particular. Historically we have found that many of the industries in East London have not been able to compete with firms in Gauteng for the domestic market and part of this inability to compete was due to the high costs of transportation inland. The vision for East London's success is therefore tied into the vision that we have for South African industry and that is to focus on export markets.
In order to achieve this vision there are a number of areas that need to be addressed:
Firstly, the expansion of the port of East London needs to be undertaken. Already the Port Authorities are looking at this and have conducted a feasibility study. With a growth in the export and import market it will put pressure on the ability of the port to service these demands. With the changes that have taken place in the South African economy over the past few years we have seen a dramatic growth in the amount of goods passing through our ports. East London therefore needs to plan the expansion of the port wisely.
Secondly, the appropriate infrastructure and support needs to be created. For example, the establishment of the Industrial Development Zone (IDZ) as a location for international and South African companies to establish their export operations is part of these efforts.
Thirdly, there needs to be co-operation between the business community and government structures in order to achieve this vision. Such co-operation can bring exciting results. For example, the co-operation between motor manufacturers and officials in the East London Ports Authority has resulted a vast improvement in the capacity of the port to increase the exports of motor vehicles.
Fourthly, it is necessary that companies structure their operations to focus on the export market and improve their competitiveness. Being an exporter comes with a number of challenges such as compliance with international standards, ensuring that suppliers comply with these standards particularly in the agro-industries where the EU is increasingly becoming stricter on use of pesticides and have instituted other such controls. In addition East London based companies need to ensure that they are cost competitive on their products. This will require looking at production processes, the types of technology that are being used, and working closely with labour to improve the skills base and productivity levels of employees. The Department of Trade and Industry at a national level and the Eastern Cape Development Corporation (ECDC) at a provincial level are willing partners in this area. The dti has a number of incentives and support structures such as the Manufacturing Advisory Centre programme that are able to assist small and medium sized firms to become more competitive. SABS, one of the dti agencies, are also playing a role by subsidising the costs for smaller businesses to become ISO9000 and ISO14000 accredited. For more information on our incentives I recommend that you contact our customer care centre on 0861 843 384 or visit our website on: www.thedti.gov.za
Fifthly, businesses need to take advantage of the many trade agreements that the government has signed with other countries. These agreements give South African companies access to a number of markets at duty free or lower duties. Businesses should be working with their Chamber of Commerce, organisations such as Trade and Investment South Africa and the Export Council for their industry in order to see what potential opportunities exist in foreign markets. The dti, in addition to negotiating these agreements have incentives through the EMIA programme to subsidise a businesses travel to foreign markets for trade missions, exhibitions and to do market research.
The last area is to support small and medium sized businesses as well as creation of opportunities for new entrepreneurs to enter the market. Internationally it has been shown that SMMEs provide a depth and robustness to an economy that facilitates economic growth and is the main source of job creation. The dti has established several support mechanisms to facilitate the creation of new enterprises. There are many challenges and constraints in this area and we are continually finding ways to improve our provision of support to this area. There is also an important role for the business community to play in supporting small businesses and emerging entrepreneurs.
In conclusion, I would again like to congratulate Collandale Cannery on what they have been able to achieve and the foresight that they had in expanding their operations and become part of the vision that we have for making South Africa a winning nation by focusing on the export market. Not only will this result in greater profits for them but also create jobs, create opportunities for their suppliers and earn foreign exchange. I believe that there is a lot of untapped potential in this operation especially in the area of exporting the skills and knowledge that they have acquired in processing pineapples to other countries in Africa. Countries in Central Africa have the right climate to grow many agricultural products but lack the skills and expertise in how to processes them and add value. Collandale Cannery Consultancy might be one of the one of the growth areas to consider.
I thank you.
Issued by Ministry of Trade and Industry
6 June 2003
Source: Ministry of Trade and Industry
Title: Hendricks: Opening of new evaporator plant
SPEECH BY DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, AT THE OPENING OF THE NEW EVAPORATOR PLANT, Collondale Cannery, East London, 6 June 2003
Chairman of Collondale Cannery, Mr Corder Tilney
Honoured Guests
Ladies and Gentlemen
I would like to thank you for giving me the opportunity to open your new world class Evaporator Plant that will be manufacturing pineapple concentrate. I am impressed with the commitment of Collondale Cannery to South Africa and East London and their investment of several million rand to expand their operations.
The business environment in South Africa has changed considerably over the past few years; this change has been necessitated by a number of internal and external factors. The South African economy in 1994 was in serious trouble. We had an inward looking manufacturing sector and economy that was extremely dependent on mineral and agricultural exports. There is no doubt that if we continued on this path we would have ended up in serious trouble as a country and an economy. We have seen the problems that many other African countries face that are dependent on a few products and have un-diversified economies.
It was therefore necessary for the government to lead South Africa down a difficult road in order to structurally change the South African economy. This resulted in a number of tough decisions for example, the reduction of tariffs, and ensuring that our incentives were World Trade Organisation (WTO) compliant, etc. The vision that we had in 1994 and one that still remains is that we want to grow our key sectors in our economy so that we are more diversified and less vulnerable to international shocks, grow our manufacturing, value adding and knowledge industries, and become more export orientated. The business community, labour and other sections of our society were unhappy about many of the decisions that we made, however we have seen that the business community has responded well to these challenges by structuring their operations, becoming more competitive and developing an export focus. We have also seen that labour has responded well to these challenges and productivity levels have improved dramatically over the years and there has been a substantial reduction in strike action.
The impact of these decisions and the response by business and labour has seen South Africa growing on average by 3% over the last few years and our manufactured exports have done extraordinarily well with on average 7% growth per year. Some of the consequences of our industries structuring, firms becoming more competitive and labour more productive has been substantial job losses taking place. This is a challenge that we are continually trying to find solutions to so that sustainable jobs are created in value adding sectors.
There are great opportunities in the export market and it holds a lot of potential for the South African economy in general and East London in particular. Historically we have found that many of the industries in East London have not been able to compete with firms in Gauteng for the domestic market and part of this inability to compete was due to the high costs of transportation inland. The vision for East London's success is therefore tied into the vision that we have for South African industry and that is to focus on export markets.
In order to achieve this vision there are a number of areas that need to be addressed:
Firstly, the expansion of the port of East London needs to be undertaken. Already the Port Authorities are looking at this and have conducted a feasibility study. With a growth in the export and import market it will put pressure on the ability of the port to service these demands. With the changes that have taken place in the South African economy over the past few years we have seen a dramatic growth in the amount of goods passing through our ports. East London therefore needs to plan the expansion of the port wisely.
Secondly, the appropriate infrastructure and support needs to be created. For example, the establishment of the Industrial Development Zone (IDZ) as a location for international and South African companies to establish their export operations is part of these efforts.
Thirdly, there needs to be co-operation between the business community and government structures in order to achieve this vision. Such co-operation can bring exciting results. For example, the co-operation between motor manufacturers and officials in the East London Ports Authority has resulted a vast improvement in the capacity of the port to increase the exports of motor vehicles.
Fourthly, it is necessary that companies structure their operations to focus on the export market and improve their competitiveness. Being an exporter comes with a number of challenges such as compliance with international standards, ensuring that suppliers comply with these standards particularly in the agro-industries where the EU is increasingly becoming stricter on use of pesticides and have instituted other such controls. In addition East London based companies need to ensure that they are cost competitive on their products. This will require looking at production processes, the types of technology that are being used, and working closely with labour to improve the skills base and productivity levels of employees. The Department of Trade and Industry at a national level and the Eastern Cape Development Corporation (ECDC) at a provincial level are willing partners in this area. The dti has a number of incentives and support structures such as the Manufacturing Advisory Centre programme that are able to assist small and medium sized firms to become more competitive. SABS, one of the dti agencies, are also playing a role by subsidising the costs for smaller businesses to become ISO9000 and ISO14000 accredited. For more information on our incentives I recommend that you contact our customer care centre on 0861 843 384 or visit our website on: www.thedti.gov.za
Fifthly, businesses need to take advantage of the many trade agreements that the government has signed with other countries. These agreements give South African companies access to a number of markets at duty free or lower duties. Businesses should be working with their Chamber of Commerce, organisations such as Trade and Investment South Africa and the Export Council for their industry in order to see what potential opportunities exist in foreign markets. The dti, in addition to negotiating these agreements have incentives through the EMIA programme to subsidise a businesses travel to foreign markets for trade missions, exhibitions and to do market research.
The last area is to support small and medium sized businesses as well as creation of opportunities for new entrepreneurs to enter the market. Internationally it has been shown that SMMEs provide a depth and robustness to an economy that facilitates economic growth and is the main source of job creation. The dti has established several support mechanisms to facilitate the creation of new enterprises. There are many challenges and constraints in this area and we are continually finding ways to improve our provision of support to this area. There is also an important role for the business community to play in supporting small businesses and emerging entrepreneurs.
In conclusion, I would again like to congratulate Collandale Cannery on what they have been able to achieve and the foresight that they had in expanding their operations and become part of the vision that we have for making South Africa a winning nation by focusing on the export market. Not only will this result in greater profits for them but also create jobs, create opportunities for their suppliers and earn foreign exchange. I believe that there is a lot of untapped potential in this operation especially in the area of exporting the skills and knowledge that they have acquired in processing pineapples to other countries in Africa. Countries in Central Africa have the right climate to grow many agricultural products but lack the skills and expertise in how to processes them and add value. Collandale Cannery Consultancy might be one of the one of the growth areas to consider.
I thank you.
Issued by Ministry of Trade and Industry
6 June 2003
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