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
7 APRIL 2006
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
