Date: 07/04/2006
Source: Ministry of Science and Technology
Title: Mangena: Grant agreement signing and opening of Technology Station in chemicals at the Nelson Mandela Metropolitan University of Technology


  Address by the Minister of Science and Technology, Mr Mosibudi Mangena, at the Grant agreement signing and the opening of the Technology Station in chemicals at the Nelson Mandela Metropolitan University of Technology, Port Elizabeth

The Premier of the Eastern Cape, Ms Nosimo Balindlela;
Council members;
The Vice-Chancellor, Dr Stumpf;
University administrators and academics;
Executive Mayor, Ms Nondumiso Maphazi;
Representatives from industry;
Distinguished guests;
Ladies and gentlemen;

As many of you are no doubt aware it is an open secret that SASOL is the single biggest performer of chemicals based research and development in South Africa. Its performance over the last few decades has placed us on the global stage in terms of product innovation and excellence. In the process the country has been able to produce and build phenomenal intellectual property and human capital in this area.

A private sector that invests adequately in research and development (R&D) and innovation is more sustainable. That is why South Africa has introduced better tax incentives for the private sector to undertake R&D. According to information derived from our recent R&D survey, 80 percent of the R&D undertaken by the private sector is done by large companies. We are hoping that by 2014 we can double the proportion of R&D by small businesses from 20 percent to 40 percent. At the current expenditure trends we would be looking at a growth of R5 billion a year of R&D spending. This is likely to place a very large demand for research and product development capacity and expertise and increase the need for laboratory infrastructure within our knowledge production base located at our universities and research institutions.

I am confident that the signing of an additional three-year grant agreement and the establishment of the new chemicals Technology Station at the Nelson Mandela Metropolitan University (NMMU) will further strengthen links between the higher education sector and small business on technology transfer initiatives.

Government particularly the Department of Science and Technology continues to place a lot of emphasis on providing an environment where technology transfer is used to support the modernisation of the economy and enhance the technology skills base of small, medium and micro enterprises (SMMEs).

South Africa like other countries needs to compete on a global scale and innovation has become the driving force behind creating new markets. If we are to grow our gross domestic product by six percent in the near future we need to focus on creating new innovative products, services and ideas and engage in value adding activities by improving product performance, features and quality at a reasonable cost.

The Accelerated and Shared Growth Initiative of South Africa (AsgiSA) has identified the chemicals sector as an area for growth within the context of the Micro-Economic Reform Strategy (MERS). South Africa remains a net importer of fine chemicals and a substantial exporter of feed stocks and raw chemicals with little attempts at beneficiation. However, there are considerable opportunities for exporting locally produced fine and so called performance chemicals. Due to the production and nature of these chemicals opportunities exist for specialised small enterprises in this space.

Achieving this goal will, however, require specific technology transfer interventions in order to build the necessary capacity within the SMME sector to produce value added chemical products. Technology stations are best placed to support technology driven enterprises because of their linkages with universities of technology. As such they can become a powerful driving force behind sustainable growth in South Africa and the region.

The NMMU has played a significant role in the Tshumisano Technology Stations Programme (TTSP) through its management of the automotive components station. I understand that of the 10 technology stations that were supported by the trust in the 2005/06 financial year, this is the station that achieved highest in terms of the number of projects initiated and SMMEs supported.

In the nine months between 1 April 2005 and 31 December 2006 the station initiated 260 projects. This was almost three times more than the next best station. At 107 it is top of the list in the number of SMMEs supported in comparison with its closest competitor at 71.

In terms of training, however, the station has to settle for the number two position even though it demonstrated a significant capacity to recover costs through its training programmes. This is an important indicator. If small and medium sized technology based businesses are prepared to pay for their training, it is a demonstration of the relevance and value of the training provided.

One of the key performance indicators of a technology station is sustainability. This includes amongst others viable projects and cost recovery. I learn that this technology station has managed to secure at least 50 percent of its operational budget through cost recovery efforts. This is a significant achievement and we look forward to the station achieving and exceeding this percentage.

Notwithstanding the station together with the Tsumisano Trust has identified challenges that must be confronted as we move forward. Clearly the most important one is the need to support a greater number of black and women owned SMMEs. Based on the obvious successes of the automotive components technology station, the Tshumisano board has agreed to complement the existing station with a satellite technology station in chemicals. The signing of a three year grant agreement for both the automotive components and the chemicals station will enable the station to continue adding value to industries in Port Elizabeth.

Through the trust my Department will continue to monitor the work and progress of the station. We hope that it will achieve substantial growth and greater impact. In particular I would like to see real improvement in the number of black and women owned enterprises that the station is supporting.

Ladies and gentlemen, allow me to reiterate the importance that government attaches to skills development. Medium and large companies will increasingly require training and research and development services. I am confident that the proposed technology station will position itself appropriately to provide the training to deliver high level operational excellence required by graduates that are preparing for entry into industry.

The fact that nine out of 10 South African small enterprises fail within their first two years of operation compels the trust to strengthen the skills focus of the technology stations. In this regard engineering students are encouraged to participate in various projects initiated by a station on their campus. In collaboration with others my Department implemented a skills development programme in which 30 engineering learners were sent to India to acquire high level tooling engineering skills. We are also using the Tshumisano Trust to facilitate the establishment of two institutes of advance tooling. These are based in Gauteng and the Western Cape.

Nationally the Tshumisano Trust is supporting a number of key sectors that can deliver social and economic growth. We have established the following technology stations at the Vaal University of Technology we provide support in materials and processing technology platforms at the Cape Peninsula University of Technology, clothing and textiles; the Tshwane University of Technology offers electronics, Agri-food processing and chemicals; the University of Johannesburg focuses on metal casting, while the central University of Technology does metals value adding and the Durban Institute of Technology does work in reinforced plastics. Two new satellite stations will be established in Agri-food processing in Limpopo and Mpumalanga. This is a significant and diverse portfolio of technology stations. We encourage the Eastern Cape Province to engage with the other Tshumisano Technology Stations to improve the performance and profitability of your SMME sector.

As you are aware the Tshumisano Trust is hosting the first all Africa diffusion conference between 12 and 14 June this year. The conference aims to promote innovative approaches, technology transfer and cooperation among businesses in Africa. A special emphasis is on how technology transfer and diffusion can alleviate problems within vulnerable small enterprises. These include job and wealth creation, food and water security, energy and environmental conservation, and skills development. I understand that the announcement and call for papers has already generated huge interest and excitement. The conference is an important milestone for my Department and I am confident that you will use this forum to share your successes and challenges.

In closing, may I wish Professor Zillie and colleagues well in this important endeavour. We have no doubt that the envisaged R&D interventions your department will be engaging in will lead to the growth and sustainability of local SMMEs in this critical sector.

I thank you.

Issued by: Ministry of Science and Technology
7 April 2006