Western Cape Business 2018 edition

OVERVIEW Manufacturing

OVERVIEW Manufacturing Steady growth is predicted in this diverse sector. Growth in the Western Cape manufacturing sector between 2003 and 2013 averaged 2.2% and the Provincial Economic Review and Outlook (Western Cape Treasury, 2015) predicts the same level of growth to 2020. A diverse manufacturing sector contributes 15% to the Western Cape’s GDP. A recent Moody’s report on the green economy in Africa states that South Africa is growing the fastest in that sector in Africa, and one of the fastest in the world. The Western Cape is driving a green economy manufacturing strategy focussed on the suburb of Atlantis. About 70% of South Africa’s manufacturing in renewables is happening in the Western Cape. Atlantis was chosen in 2017 as the site of a new factory for Czech fabric manufacturer PEGAS Nonwovens. At R1.3-billion, the investment is the biggest secured by Wesgro and Into SA since 2011. Training for local residents employed by the manufacturer will take place in the Czech Republic. All of the raw materials for production will be locally sourced but the high-tech machinery will be imported. Even an established investor such as fridge manufacturer Hisense is exploring ways to make its product greener, either through its own processes or encouraging its suppliers to go down that route. SECTOR INSIGHT The Red Tape Reduction Unit assisted a boat-builder secure US orders. • A Czech fabric manufacturer has invested more than R1-billion. Within the Western Cape manufacturing sector, the agriprocessing sector (including food and beverages and tobacco) subsector is largest employer (24%) followed by metals, metal products, machinery and equipment at 19%. The Western Cape Provincial Government has identified agriprocessing as a key growth sector, one of those most likely to deliver economic growth and jobs. For too many years, jobless growth was the norm. Food and beverages The combination of excellent and plentiful agricultural produce, good manufacturing capacity and a skilled workforce give the Western Cape a competitive advantage in the food and beverages sector. A sophisticated transport infrastructure system allows it to service international markets. Famous Brands has bought a famous Western Cape brand in WESTERN CAPE BUSINESS 2018 98

OVERVIEW its drive for greater backward integration. Lambert’s Bay Foods supplied Famous Brands restaurants with chips for two decades. With its purchase from Oceana, Famous Brands now has greater control over one of the vital items on the menu of its 26 restaurant brands, including Wimpy, Steers, Fishaways and Mugg & Bean. Lambert’s Bay Food sources potatoes from all over South Africa, but its proximity to the potatogrowing Sandveld region is help ful. British American Tobacco, which has about 65% of the legal domestic market, has moved its administrative headquarters to the Waterfront. The wheat-growing areas of the Swartland host several mills such as Sasko’s facility in Malmesbury. Bokomo has several manufacturing facilities in areas such as Atlantis, Epping, Ndabeni near Pinelands, Worcester and Bonnievale. Safari Vinegar is based in the Strand and there are two Heinz manufacturing plants at Wellington and Atlantis. Two of the biggest chicken processing facilities are located on the N7 highway to Malmesbury (Tydstroom) and on the N1 to Worcester (Rainbow Chickens). The Western Cape has about 16 000 commercial pork sows and produces a quarter of South Africa’s milk. Willards has a factory in Goodwood, in nearby Parow there is a Simba factory and local chip and snack manufacturer Messaris, which has been in operation since 1898, has a facility in Elsies River. Nestlé produces condensed milk and milk powder in Mossel Bay and canned pet food in Cape Town. Tiger Brands makes mayonnaise in Bellville and has also invested heavily in its prepared meals plant in Cape Town. SABMiller’s Newlands brewery is one of the busiest in the country as it is responsible for providing product for a very large geographical area. Coca-Cola bottler and distributor Peninsula Beverage has three plants – at Parow, Athlone and Vredendal on the West Coast, and employs 1 300 people. Boat building The Western Cape Government’s Red Tape Reduction unit assisted one of the province’s biggest boat-builders, Phoenix Marine, to get an abnormal load permit in time to attend a big boat fair in the US. The affected yacht was worth R12.5-million and the company signed contracts for two further boats valued at R29-million. The good news continued for Phoenix Marine with investors coming on board for -million and annual production targets being reset at three times the current rate. Nautic Africa make larger vessels, including patrol, defense, oil and gas platform and commercial vessels. It is also active in service and support, parts and spares and vessel leasing and management. Robertson & Caine’s manufacturing facility in Woodstock produces three boats a week for the international market. With a staff complement of 1 350, a record of having launched more than 1 300 vessels and a subsidiary company in Tampa, Florida, the company is a world leader in power catamarans and sailing catamarans. Atlantis is home to Admiral Boat Manufacturers and Phoenix Marine, both specialist catamaran manufacturers, and Celtic Yachts who make catamarans and cruising yachts. Ullman Sails makes sails in Maitland while Two Oceans Marine Manufacturing constructs its catamarans on the Foreshore. The Whisper Boat Building Academy is located at the False Bay TVET College. ONLINE RESOURCES Cape Town Boatbuilding and Technology Initiative (CTBi): www.ctbi.co.za Cape Chamber of Commerce: www.capetownchamber.com National Department of Trade and Industry: www.thedti.gov.za South African Textile Federation: www.texfed.co.za Wesgro: www.wesgro.co.za 99 WESTERN CAPE BUSINESS 2018