SA must develop manufacturing: Pandor

By Drum Digital
25 September 2012

South Africa must develop its manufacturing sector in order to industrialise, Science and Technology Minister Naledi Pandor said on Tuesday.

"Industrialisation is the normal route to development," she said.

High-income countries had all developed a substantial manufacturing base that in turn provided for full or nearly full employment.

As manufacturing activity expanded, it benefited from economies of scale, allowing unit costs of production to fall.

Other industries, such as agriculture or mining, ran up against resource shortages as they expanded.

In order to promote development, South Africa had recently introduced policies on beneficiation and localisation.

"South Africa is the second largest supplier of the mineral ore that can produce titanium metal," she said.

"However, we add little value to the mineral before export."

South Africa could produce titanium metal from its mineral resources.

Pandor's department was championing the development of a titanium industry. which would produce not only the raw mineral, but ultimately metal mill products and components.

The titanium metal powder industry was estimated to have income-generating potential of R3 billion to R5bn a year, which could increase to R10bn to R30bn a year when a downstream industry was established.

The industry had the potential to create 450 jobs for workers, engineers, and technologists in metal production, and about 2000 workers, engineers and technicians in the downstream component manufacturing.

"These new capabilities can position South Africa as a world leader in the cost competitive production of high-grade titanium metal powder," she said.

Titanium was a sought-after metal, especially in the aerospace industry where aircraft and satellites needed to be lighter to consume less fuel.

"These efforts mean that, in the near future, South Africa will have a new industry built around titanium."

Platinum was another example.

"Four years ago we launched the Hydrogen SA (HySA) programme," she said.

This marked the initiation of research and development activities, and the establishment of a South African fuel cell company, Clean Energy.

In partnership with Anglo Platinum and Altergy Power Systems, Clean Energy would initially market and eventually assemble and manufacture fuel cells in sub-Saharan Africa.

It was still in development, but had already sold 18 fuel-cell back-up power systems to Vodacom.

An agreement was being negotiated with a Norwegian partner for the commercialisation of a hydrogen storage material.

The parties had agreed to co-fund the pilot plant and upscale it into a fully-fledged manufacturing plant.

A third example was fluorine.

A multi-purpose fluorination pilot plant had been launched at the SA Nuclear Energy Corporation, in Pelindaba.

Through this initiative, South Africa could develop human capital and reduce its chemical trade deficit through exports.

It could also attract foreign direct investment and increase research and development, she said.

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