Today’s opening evokes memories of a walk in Atlantis in 2010 with my colleague Dr Rob Davies, when Tedelex announced the closure of their factory, and the town stared at a bleak future of more joblessness. We committed to work together to reverse that trend, to help Atlantis to become a centre, a hub of manufacturing.
A few months after that visit, President Zuma led a team of Ministers to Beijing, to meet then-President Hu Jintao, to pursue talks and sign an agreement, the Beijing Declaration. That agreement was to form a Comprehensive Strategic Partnership between Africa and Asia’s largest economies.
As we sat in the Great Hall of the People on that August day in 2010, the SA economy was still shedding jobs as a result of the impact of the global economic crisis.
But we looked ahead and set in motion through the agreement with the PRC, a process that has already begun to reshape our two countries’ relationships and that contributed to this official opening of a factory.
The declaration commits the countries to improve the unbalanced structure of trade between them and to encourage trade in manufactured value-added products.
Two months later, government adopted a New Growth Path (NGP) that set out the storyline of an economy brimming with opportunity, on a continent that is registering some of the fastest growth rates in the global economy.
We spelt out a vision of an economy that rediscovers its roots in manufacturing, mining and agriculture – in sectors with high labour absorbing capacity – and combines that opportunity with R&D and technology, skills development and above all, an advanced economic infrastructure.
We committed to a programme to widen and deepen markets and promote greater social equity for all South Africans.
We pointed to the strengths of the African continent: a consumer base of one billion people, enormous resources of natural resources, a youthful population, a great climate for solar and wind energy and a growing optimism about the future.
Since the adoption of the NGP, the economy has created more than 600 000 new jobs and has started the long march to recover from the most serious global economic crisis seen since the 1930s.
Today’s opening of the factory fits into that optimism about our future.
It is a story of youth employment, of industrialisation, of African economic opportunity, of BRICS and of China.
It is important because:
- to the people of Atlantis this factory brings hope that the burden of poverty and unemployment that ravaged the people of this area for years can be reversed.
- to the Western Cape it is a major contributor in reversing the net job losses experienced by this province in the first three months of this year
- nationally it helps to retaliate our a vision to re- industrialise the South African economy and strengthen the manufacturing sector as envisaged in our New Growth Path (NGP) and the National Development Plan (NDP).
But development is not only about policies. It has a human face.
- Ms Latiefa Ganieldien, the mother of three, who was re-trenched as the Tedelex Factory closed down. She remained unemployed until the Hisense factory opened its doors and employed Ms Ganieldien three months ago. She is one of over 150 women that have secured employment when 300 production employees were recruited to kick start this factory; when I saw her on the production floor 45 minutes ago, she was filled with smiles.
- Ms Andrea Koopman is a 24 year old new entrant to the labour market, who after she completed a college diploma, has been struggling for work.
A retrenched worker and a new entrant to the labour market: this is the profile of many South Africans who are available and capable to work and who constitute a resource that we need to bring into employment.
It is appropriate that the factory opens in June, national youth month, for the majority of employees are young people.
Over 60% of total employees are young people, producing a youth production zone here in Atlantis, drawing SAs young talent into making consumer goods that makes lives easier.
It builds on the story of China's new relationship with SA:
- The Beijing Automobile Works (BAW), a Chinese company, established a factory in Springs to assemble taxis locally, which delivered its first 16-seater minibus taxi that meets quality standards of the SABS;
- A R600 million investment by First Automobile Works (FAW) into Coega in the Eastern Cape resulted in the construction of a truck assembly is due for completion at the end of this year;
- It is employing 300 workers currently and will double this by the end of the year.
The optimism I have expressed is anchored by a number of pillars that include:
- The strategic partnerships we are building including our membership of BRICS and the role we are playing in the African Continent to speed up industrialisation, transformation and development.
- South Africa’s trade with the rest of the continent has grown
- The rolling out a massive National Infrastructure Plan which will serve as a stimulant for the next 20 years and more, with a projected expenditure of R4 trillion. This programme, with over 120 projects nationally, is employing over 150 000 people and growing.
These interventions are supported by various government incentives spearheaded by both the Industrial Development Corporation and the Department of Trade and Industry.
The dti’s Manufacturing Investment Programme (MIP) has assisted Hisense with a R26,8 million cash grant, while the IDC signed an MOU with Hisense Company of China and the China-Africa Development Fund (CAD Fund) covering finance for the expansion of the company to cover the assembling of air-conditioners as well as other products.
I want to tell the story of televisions and fridges to show we can make a difference.
South Africa imported $175 million worth of televisions and projectors from China in 2012. What is important is the number has been dropping as we ramped up local production.
This is 19% lower than in 2008 and 34% lower than in 2011.
Our imports of TV’s from all countries (including China) also dropped in 2012. It was 34% lower than in 2008 and 29% lower than in 2011.
We have managed to increase our exports of televisions to all countries by 77% from 2011 to 2012. We exported $94 million or R770 million worth of televisions in 2012.
This drop in imports and increase in exports has resulted in a drastic improvement in our trade deficit in televisions from $334 million in 2008, to $172 million in 2012.
South Africa has at the same time increased its exports of televisions to the rest of Africa with 9 of our top 10 destinations being African countries and almost 90% of our exports going to other African countries.
This is the result of a dedicated effort by the government to revive the local electronics sector.
It was kicked-off shortly after the start of this administration, when we changed the duty structure for the import of television components. This incentivised television manufacturers to increase the local value add of the components they imported.
It includes the work recently with Hisense and also with other companies such as Vektronix in the Eastern Cape, a company which has been supported by the IDC that produce Samsung flat-panel models which were previously imported. LG has set up a plant in Gauteng, while Sony is producing televisions at Tellumat here in Atlantis.
This is an example of government’s work to re-industrialise the country and replace products currently being imported with locally manufactured goods.
We believe that the manufacturing of fridges here in Atlantis at Hisense will assist in improving the trade deficit in fridges as we have managed to do in televisions.
These changes are by design, as government interventions started with changing the import duty structure for television components to the incentives we have provided to boost local manufacturing of TVs.
We increased household access to electricity since the advent of freedom and democracy from 34% to 84% by 2011. Today, for an example, the Minister of Energy is switching on the 5.6 millionth household to get electricity. It provides the power needed for TV’s, fridges and the other appliances required by South Africans.
The buying power of many citizens have improved, which expands demand for goods. As wages rise, with productivity growth, we lay the basis for even larger markets for consumer goods. We have identified technical skills development as a focal point in our higher education and training sector and signed a National Skills Accord with social partners.
We trust today’s investment is just a beginning of a long productive relationship with South Africa and the people of Atlantis.
On behalf of national government, of the provincial government, on behalf of the residents of Atlantis, it is my great pleasure to officially declare the factory opened. Let the production begin!
