KZN Manufacturing challenges and potential fell under the spotlight at a manufacturing and business event at Mount Edgecombe Country Club, Durban on Thursday, where the challenges faced in eThekwini were highlighted and steps were formulated to aid in a recovery.
Justice Matarutse, Senior Economist at Spatial Economics said that KZN has a strong manufacturing base in eThekwini, but they have had the short end of the stick since 2020.
“We had the Covid 19 pandemic and then the civil unrest in 2021; unfortunately, the 2021 unrest targeted a lot of the warehouses and factories of key manufacturing. It has had a negative impact on businesses in the region. Some moved, and we have a company like LG that closed,” he said.
Matarutse added that that was one issue, but unfortunately there was also the flooding in April 2022 which affected the South Durban Basin, a key manufacturing node in the region.
“Jacobs and Prospecton areas were badly affected; the entire precinct, which is part of a proposed Transnet water channel, was actually a water channel that burst and flooded factories. We think that there could be more floods in the future; during the 2022 floods, we had companies that had their entire factories swept out by water into the parking lot,” Matarutse said.
Matarutse said that those challenges have left Durban on the backburner.
“They are still trying to catch up with progress and recovery which other metros have already done. However, Durban is recovering and heading in the right direction; the employment numbers are looking a lot better thanks to government intervention. However, the private sector still needs to come back to pre-covid 19 levels.”
Matarutse added that the manufacturing base in KZN remains one of the key strong points in the region.
“The smaller firms such as BSN Medicals and NCP Alcohol companies that have been in Durban for a long time are seeing that their performances are doing well. A lot of the product lines are also doing well such as Mondi and Sappi. Toyota is also opening up new initiatives."
"I believe the new Hilux vehicles and electric vehicles will be happening out of the Durban plant, and there is a lot of expansion activity. The provincial government and the eThekwini Municipality are looking at opening a KZN Automotive Supplier Park in the South of Durban,” he said.
Matarutse said that the textile industry has had the strongest effect since it employs the most people in South Africa. “It is still doing really well despite pressure from countries such as Pakistan and China. There are areas that are doing well, and we still have time for our recovery.”
Matarutse added that the busiest container port is in Durban, which means that South Africa or Southern African Development Community (SADC) countries, when they are importing their goods, land in Durban.
“Eighty-eight percent of containers that arrive in Durban on the ships don't leave Durban. It means that Durban is a big packing and unpacking station with containers being unpacked and loaded and empty containers staying here and getting moved out. In Durban, in terms of our import volumes, they look quite large, because everyone is importing through Durban, but most of the imports are for SADC and South Africa countries. Most of the imports come from China, and India is also growing,” he said.
Takatso Sello, Senior Manager of Manufacturing, Nedbank Commercial Banking, said that businesses face many challenges.
“We are on a mission to create a network that works for businesses. The reality is we need to find solutions that work for businesses to drive revenue. It's important to find a partner that is willing to walk with you to get your business across the hard times.”
Sello added that manufacturing capacity is falling. “However, it doesn't mean there is no greatness happening in the country. Let's not get stuck in the challenges but carve a way forward for businesses.”
Shane Naidoo, Nedbank Global Trade Specialist, said that companies need to understand how the economic system and trade system can change the environment. “It's a tough path to walk, but with the right alliance partners understanding the different disciplines, you can grow your business and diversify it,” said Naidoo.
yogashen.pillay@nationalmg.co.za
THE NATIONAL