There is multistakeholder consensus on the need to increase investments in the infrastructure development required to improve the trajectory of South Africa’s manufacturing sector, highlights financial services company Nedbank Commercial Banking manufacturing services manager Amith Singh.

Significant investment in ports, roads and rail is necessary, and should be structured so as to address the complex challenges of underinvestment, rising business operating costs and logistics disruptions.

Some of the challenges facing manufacturing include the high initial costs attributed to operating in the sector, the need for skilled labour and global competition from other manufacturers, with Nedbank noting that solving these requires strategic planning and continual investment in infrastructure development and education.

Singh elaborates that the sector’s investment potential should be predicated on mathematics and science education and the need to improve and develop skills for this sector, with a particular emphasis on technical proficiency – including operating machinery and understanding operational processes – and soft skills, such as communication, teamwork and problem-solving.

“We have dwindled as a country in skills pertaining to [the] science, technology, engineering, and mathematics fields, and it is of the utmost importance that we develop education and vocational training to meet the needs of modern manufacturing.”

Small and medium-sized enterprises should be better supported by providing financial incentives, grants and support programmes to help them scale, innovate and compete in local and global markets.

Singh adds that the local manufacturing sector could stimulate economic growth by creating jobs and reducing unemployment while emphasising sustainable practices and localisation to reduce the carbon footprints associated with long-distance transportation. This practice, he notes, would enable the country to be more independent and less susceptible to global headwinds.

Innovative Considerations

Nedbank deems the promotion and adoption of advanced machinery as critical to the development of the manufacturing industry, as the current and foreseeable pressure on expenses is leaving many with no option but to leverage the advancements in technology to improve efficiencies.

Considering the advent of robotics and automation in manufacturing processes, Singh notes that the bank does not foresee these factors as key impediments to job prospects, but more as an enhancement of various workforces, from low- and semi-skilled to high-skilled workers across various businesses operating in the sector.

While fully appreciating that robotics and automation in manufacturing processes are key to enhancing production efficiencies, Singh notes that, from a commercial perspective, these advancements could be viewed as ‘business investments’. This, in turn, could require bank assistance in the form of lending, which is at the core of its banking practices.

He says Nedbank will continue to empower manufacturers by offering guidance and advice regarding growth and expansion strategies while introducing digital efficiencies that streamline administrative tasks and promote easy and efficient functionality.

“At Nedbank Commercial Banking, we understand the valuable contribution that manufacturing makes to our country’s economy. We also appreciate that this is the gateway to becoming a developed country and it is for this reason that we have a specialised and dedicated focus on the sector to partner with our clients in their growth aspirations,” Singh concludes.