Senior representatives of Eskom and Transnet
Representatives from the National Foundry Technology Network and all the Foundry companies present here
Our international partners from the United Nations Industrial Development Organisation
Department of Science and Technology partners from the Departments of Public Enterprises, Trade and Industry and Communications
Technology partners from Mintek and Council for Scientific and Industrial Research (CSIR)
Distinguished guests
Ladies and gentlemen
The major state owned enterprises are embarking on large scale infrastructure recapitalisation and expansion programmes over the next 20 years and beyond. In a bid to increase the participation of local companies in major procurement opportunities, South Africa recently launched its Competitive Supplier Development programme.
Three government departments are involved: the Department of Public Enterprises, the Department of Trade and Industry, and the Department of Science and Technology. The three departments are in partnership with industry and development agencies, and I must single out special mention of the United Nations Industrial Development Organisation (UNIDO).
The Department of Science and Technology has structured its contribution in terms of a Technology Localisation programme. It’s aimed at supporting supplier development by assisting local companies to develop their technological capabilities, and then to use these capabilities to leverage procurement opportunities from the infrastructure-build programmes of state owned enterprises. The enterprises concerned are Eskom and Transnet.
The Technology Localisation program is based both on conducting benchmarking of selected companies and on industry competitiveness studies. UNIDO has contributed to local development with assistance in developing benchmarking tools to identify key industries where Department of Science and Technology’s institutions, networks and resources would be best utilised to support the localisation effort in South Africa.
We’re already investing in materials and manufacturing research and technology development. We believe that the expertise we have built up around research and technology activities can be mobilised and deployed for the benefit of local engineering and manufacturing companies. Our aim is to develop these suppliers to a level where they are ready to leverage procurement opportunities from the Competitive Supplier Development programme and to supply to export markets.
For the 2009/10 financial year the Department of Science and Technology prioritised the foundry industry. Foundry companies were identified relative to components that are targeted for localisation in the Competitive Supplier Development Programmes of both Eskom and Transnet. This is a key criterion. The programme is not about generic support for enhanced manufacturing. Instead, it’s related to real industry needs, the production of specified products by local manufacturing companies.
Through the process of the studies and the benchmarking, technology gaps were identified �" gaps that the DST can help address to make the foundry companies more competitive.
As a result of these efforts, 117 foundry companies were benchmarked. Twenty eight of these were identified for the first round of Department of Science and Technology’s technology assistance packages. All of these enterprises met stringent requirements with respect to both technology benchmarking and business benchmarking exercises.
They are the “most ready” to produce components for the foreign original equipment manufacturers that will be given contracts from Eskom and Transnet. The representatives of all of these 28 companies are with us today. Please note that we’re not picking the companies that get contracts. We are simply using the outcomes of the technology benchmarking to establish which companies are in the running.
You still have to compete amongst yourselves and it will be up to the original equipment manufacturers to determine which of you is signed up under contract in their supply chains. The South African government is making sure that the original equipment manufacturers will be able to say that there are foundry companies in South Africa that can win a tier two or three tier supplier contract.
The benchmarking process has also identified what further steps must be taken in order to move your companies beyond the “most ready” status. The technology upgrade support Department of Science and Technology will provide in this first phase will be in terms of gaps identified on “lean and clean” manufacturing and castings technologies. This will not include equipment requirements, but will encompass access to expertise from my department’s activities in advanced manufacturing and light metals.
In addition to these efforts, industry hubs have been formed with other stakeholders in support of the Competitive Supplier Development programme. These include:
* the transformers and motors hub
* the boilers hub and
* the turbine hub.
We are optimistic that leading local enterprises in these industries will also benefit from the initiatives.
Although the Competitive Supplier Development programme is driven by state economic enterprise procurement, the Department of Science and Technology has taken the opportunity to replicate the model in other areas of both public and private sector procurement.
For example: the design and build of the new polar research vessel to replace the Agulhas, the procurement of technology and services for the design and build of MeerKAT (and opportunities related to the Square Kilometre Array (SKA) if South Africa is to win the bid to host this facility), the localisation of satellite technology within the space science and technology strategy and the localisation of capital equipment supplies to the mining industry.
The Department of Science and Technology’s Technology Localisation programme is something like a “Buy South African” campaign. However, the programme is not based on emotion or sentiment. It’s firmly based on good products, equal to the best products of international competitors, products vital to our national goals, reputation and wellbeing.
Only excellence is “good enough” when assembling the technologies on which our future depends. It remains for me to warmly congratulate the 28 companies whose skills and products have won our technology assistance packages. I congratulate also the partner departments and agencies and technology partners from science councils and universities.
This initiative seeks to enhance the capabilities of South African companies to allow them to access contracts, create more jobs and contribute to economic growth and knowledge, based economy. These are critical imperatives for South Africa.
I wish you all good luck and clear heads on the journey.
I thank you.
Issued by: Department of Science and Technology
1 March 2010
Source: Department of Science and Technology (http://www.dst.gov.za/)
