Transcript Document
KWAZULU-NATAL TOOLING INITIATIVE
Re-structuring of the South African Tool, Die and Mould-making Industry
Presented by:
Umash Ramkalawon Regional Programme Manager KZNTI
KZNTI A Public-Private Partnership STRATEGIC DRIVER
TOOLMAKING ASSOCIATION OF SOUTH AFRICA (TASA)
FUNDER
DEPARTMENT OF ECONOMIC DEVELOPMENT & TOURISM (DEDT)
KEY STAKEHOLDERS
TASA DEDT TIKZN eThekwini Municipality merSETA Department of Education
Support the needs of the TDM Industry Aligned to the sector development projects of the DEDT aligned to the IPAP Multi-stakeholder support
Rehabilitation and growing of the Tool, Die & Mould-making Industry in South Africa
History
of the TDM Sector in SA
% Annual turnover 1% Global EU 4,6% SA Sector ratio Capacity (increasing imports from China and others) Mining & other Automotive (7 OEMs) 25% 35% Packaging & consumer goods 40% BMW Toyota Nissan Volkswagen General Motors Mercedes Benz Ford Motor company 1990 2010 80% Loss In Local Tooling Manufacturing Capacity
Distress Drivers for the Sector in SA
Skills Erosion & Job losses Technology Stagnation
• Critical shortage of Designers, Artisans, Engineers • and Project Managers in the sector.
• Radical changes in Skills Value Chain.
• Lack of recapitalization • Lack of focused R&D.
Loss of Capacity
• Industry demand growing, Enterprise quantity declining
Loss of Competitiveness
• China, India, EU increased pressure
BBBEE
• Absence of BBBEE transformation in TDM industry
Growing trade deficit
• Increasing imports – decreasing exports
Economic Impact of the Tooling Sector in SA
• The tooling sector can be classified as a sub-sector under the “Metal Fabrication, capital equipment and transport equipment” sector • High employment and growth multipliers • Strong backward linkages
National Intervention in the TDM Sector
• The Tooling Initiatives across SA is guided by the intervention programmes set by the National Tooling Initiative(NTI) which has been incorporated into the DTI’s Industrial Policy Action Plan – IPAP(2013 2016) as a key action programme for Capital Equipment and Allied Services.
Establishment of TDM Cluster Management structures in 6 provincial locations Gauteng Pretoria Kwazulu-Natal Durban Western Cape Cape Town Eastern Cape Port Elizabeth Limpopo Polokwane Mpuma-langa Middleburg
KZNTI Strategic Concept
SKILLS GOVT POLICY MARKET DEVELOPMENT SUSTAINABLE ECONOMIC GROWTH within the TDM SECTOR
KZNTI Intervention Projects
TDM sector skills development Business capacity expansion Technology recapitalization Competitiveness improvement Cluster structure development Localisation of international tooling companies
TDM Sector Skills Development
• TDM Powered Apprenticeship Programme • Pilot programme developed by industry experts and funded by the DTI • The future tooling qualification 526 students at selected FET Colleges across the country 65 students in KZN • Level 1 20 students in Pmb • Level 2 19 Students in Pmb 26 Students in Dbn Additional intake of 500 students for 2014
….continued
Business Capacity Expansion
• Tooling Incentive Scheme • Recommended amendments to the current investment incentive structure of the Automotive Production and Development Programme (APDP) and the Automotive Investment Scheme(AIS) • AIS o o Current capital investment incentive structure ranges from 20% to 30% It is proposed that this incentive is offered to automotive tooling at a 50% standard rate • APDP o The light vehicle APDP offer's local value addition incentives in the form of a Production Incentive applied for via a Production Rebate Credit Certificate o It is proposed that for tooling local value addition, the benefits apply at the vulnerable products level to provide a significant boost to tooling localization.
….continued
Rand value of imported automotive tooling used for calculations are as follows,
• •
Historic average of R 2, 227 billion per annum Forecasted value of R 4 billion per annum
Historic average (R2 227 million) Forecast (R4 000 million)
Additional local value added Additional AIS for Local tooling R 534 000 000 (R 107 000 000) R 960 000 000 (R 192 000 000) Production incentive
Benefit to SA economy
Benefit as a % of VA Extra cost to Govt. for VP incentives per annum (R 75 000 000)
R 353 000 000
66% (R 25 000 000) (R 128 000 000)
R 640 000 000
67% ( R 38 000 000)
Competitiveness Improvement
• Business Development and Systems Training