As consumer behaviour and preferences change in the wake of sustainable options, coupled with incoming decarbonised goods trade regimes, it is worth considering more “glocalisation” opportunities for the South African manufacturing sector.

This was the consensus reached by a panel on globalisation and localisation during the second day of the Manufacturing Indaba on October 25.

The panel described glocalisation as the modification and customisation of products to suit a local market or local conditions, which is becoming increasingly prevalent among manufacturers globally.

Glocalisation has, in no small part, been enabled by software as a leveller of production, explained software training academy WeThinkCode CEO Nyari Samushonga.

She cited the example of mobile money, which originated in East Africa, which solved the issue of many people being “unbanked” and moving money around unsafely or inefficiently. Although manufacturing has layers of complexity, a computer and access to the Internet had allowed for the creation of many useful solutions and product movements in Africa.

These digital advancements have also enabled local products to be ordered, shipped and consumed internationally.

Responding to what is needed to advance glocalisation for South African manufacturers further, Samushonga said quality could be measured technically through its quantifiable aspects, as well as through perception.

For example, many people assume German products are of superior quality owing to the country's reputation, or people assume that those who studied at Stellenbosch University have a superior quality of education compared with someone else who studied the same course elsewhere.

She explained that quality is not only a matter of objective standards and, therefore, South African companies need to start boldly talking about the quality of their products and likewise respect local products first, by using local suppliers.

Professional services firm PwC associate director Vinesh Maharaj agreed, stating that multinational manufacturers that are truly invested in the country not only create local jobs but support local suppliers.

He emphasised that with the introduction of multinational products, it often had to be localised with custom formulations and adjustments, through local skills, to suit the local market.

For example, a stock cube has to be customed to suit the palate of the local people, since culinary preferences differ across the world and across the African continent. Another example is hand lotion; what works in the US and with their climate and complexions does not necessarily work in African countries.

“This is where we have opportunities as small and medium-sized enterprises to add value and glocalise international products,” he stated.

Maharaj noted that even marketing needs to be “glocalised” with the right target market in mind, especially in South Africa with its agenda to be inclusive and embrace diversity.

International Finance Corporation senior operations officer Christoph Kausch added that exporters in other markets had also customised products for the South African market, particularly in the automotive industry, with many US vehicles being built with right-hand driving in mind.

He agreed with Maharaj that multinationals often added a lot more value to the manufacturing sector by building capacity for local suppliers and that many value chains were driven by large original-equipment manufacturers and multinationals. “Working with your local supply chain is where the biggest opportunity lies,” Kausch highlighted.

He continued that globalisation and glocalisation meant getting closer to suppliers and customers, which implied a change in how the supply chain functioned. What companies have learnt from the Covid-19 pandemic was that a secure supply chain increased resilience and responsiveness of businesses.

Kausch explained that being closer to suppliers often involved regional value chains or perhaps vertical integration.

To successfully pursue more globalisation opportunities in foreign markets, University College London Professor Julius Mugwagwa explained that manufacturers sat with the classic challenges of cost of production, scale, the need to modernise, market contestation by larger companies, as well as lack of skills in many instances.

To advance more manufacturing opportunities, he emphasised, “patient” capital was required over a longer term, as well as political capital – meaning there may be political will to support manufacturers, but did this sentiment translate into action?

He added that institutions and strong industries could only be built through deliberate government choices and actions, however, politics was often the elephant in the room.

“Covid-19 showed us the importance of co-working and how it can cut time taken for companies to do clinical trials and get approvals, for example. Policymakers are often responsible for creating these collaborative platforms but sometimes they forget the lessons learnt from the pandemic, despite the world still having existential imperatives.”

Steel and Engineering Industries Federation of Southern Africa COO Tafadzwa Chibanguza stated that the impacts of globalisation on Africa had been net positive, with the steel and engineering sector exporting 40% of the products that are produced locally. He explained the external market has offset a lot of the local challenges for steel and engineering companies.

However, many of these markets had become cost-sensitive as of late owing to the high interest rate environment, which limited demand for these products, whereas local demand had been more stable and predictable.

He highlighted a key issue for more African glocalisation as being the inability to deliver products from neighbouring countries to the next, owing to lack of infrastructure or other barriers to entry, which often led to local retailers selling US or Chinese products that were easier to come by, instead of neighbouring countries’ products.

Chibanguza went as far as to say that local manufacturing capacity can be developed exclusively for foreign markets. For example, Denmark has aggressive decarbonisation targets of not only being carbon neutral by 2045 but being carbon negative. This could only be achieved through decarbonisation of major industries such as steel.

South Africa, as a steel producer with high-quality iron-ore resource, was able to develop hydrogen for steelmaking for use in hard-to-abate sectors in Europe. “The capacity exists, we just have to expand it. We have opportunities to export for international preference,” Chibanguza stated.