South Africa’s analytical and scientific instruments sector is facing significant challenges due to rising costs, exchange rate fluctuations, load shedding and specialised skills shortages. However, there are still strong growth opportunities in the market. This is according to leading companies set to participate in analytica Lab Africa 2023 from 5-7 July at Gallagher Convention Centre.   

Current challenges

Vicky Wagner, Director at Wirsam Scientific & Precision Equipment, of the continent’s leading suppliers of laboratory instrumentation, says rising costs are a key challenge: “The rate of exchange volatility is pertinent to everyone, plus there is the challenge of load shedding. The exchange rate is contributing to the rising cost of everything – in our industry equipment and parts are around 20 – 30% more expensive than they were a year ago. It all began after Covid where we had a shortage of spares and equipment, then the Ukraine war and exchange rate exacerbated the situation. We try to share the pain with our customers, but they are having to dig deeper and find various ways to fund projects. Universities are among those hardest hit.”

Wagner notes that load shedding is adding to costs: “It has quite an impact on equipment – some equipment doesn’t respond well to changes in power. In addition, there is downtime to contend with.”

Alex Wagner, fellow Director at Wirsam Scientific & Precision Equipment, adds that supply chains are longer: “Where previously, deliveries were made relatively quickly, now it’s taking significantly longer, with chip shortages impacting manufacturers.”

Despite the challenges Wirsam believes that there are several positives for the sector, among them the NRF and NEF and other funding programmes. 

Alex Wagner adds: “Software is improving, so it has become less onerous to develop analytical programmes and allowing for more of the work to be done with fewer specialist people. Artificial Intelligence is lowering the barrier to entry to more customers.” 

Vicky Wagner adds: “Within each sector we see pockets of excellence with certain businesses performing really well and updating their instruments. Mining in South Africa and in neighbouring countries show good growth potential – particularly the lithium sector.”

Delphine Darling, Director at Lasec, supplier of quality, dependable solutions to the laboratory and scientific community, agrees that load shedding and the exchange rate are challenges. “We have moved to mitigate the impact on our business, but for customers, it’s a problem. A lot of equipment can’t just be switched on and off.  In addition, it’s forcing labs to have to work around load shedding cycles that might interrupt testing. They must be confident they have power to complete a cycle,” she says. “The devaluation of the rand is having a significant impact on budgets and planning – particularly around consumables. We try to work with customers to minimise the impact of price increases and exchange rate fluctuations on their consumables supplies and operations.” 

Kylie Davis, Portfolio Manager – Instruments & Biotechnology at Lasec, adds that the Covid-19 lockdowns have also had a lasting impact on models for engagement with customers. “Many have retained the virtual meeting approach, making it challenging to maintain a close customer connection, understand their working conditions and needs, and offer solutions,” he says. “We have such a broad range of solutions that when you are on site interacting with customers in their lab, it opens up the potential to demonstrate products. If you only interact online you may be confined to addressing only a particular need whereas in a lab you get a real feel for what the customer is doing, and how you can help address their pain points.”   

Growth opportunities 

Lasec sees opportunities for growth in neighbouring countries. Says Darling: “The South African economy is under more pressure than many other African countries, so there are opportunities outside the country. Across Africa, there has been more investment in healthcare and laboratory medicine for more effective diagnosis. Labs are being upgraded and staff upskilled to deal with the next pandemic. We also see investment from multinationals, and a bigger focus on food and beverage safety.”

Industry 4.0 and automation are among the key growth opportunities for the sector, says Ravi Issari, CEO of Metrohm SA. Metrohm AG is an internationally active producer of precision instruments for chemical analysis, the leading manufacturer of titration devices and one of the two biggest manufacturers of ion chromatography systems.

Issari says: “With Covid having scuppered sector plans and initiatives, we modified our approach to market and reviewed where we needed to place emphasis. In spite of that event and doom and gloom around all the challenges in South Africa, we have been fortunate in that our products are diverse and we can tap into a wide variety of markets and go after sectors that are resilient. For example, we find that the mining industry is still quite strong, and we are meeting demand for specific customised solutions in that sector. “

He says Covid – with its associated sick days among staff – drove uptake of automated solutions that reduce the need for extensive human resources. “We also see a growing focus on ESG driving demand for technologies that utilise ‘green chemistry’, while enhancing the safety of the analysts.  Another factor is the skills deficit we have in South Africa: certain very advanced equipment may need a high level of skills to manage, so we have introduced AI to support monitoring and management of equipment.”

Darryl Harris, General Manager at Shimadzu South Africa, says one of the biggest issues facing analytical and measuring instruments specialists such as Shimadzu is global shortages. “Shortages are impacting manufacturing and deliveries. However, our strategy remains to cement ourselves as a major supplier into the Sub-Saharan African market, and we have been enjoying solid growth.  Load shedding is slowing market growth in South Africa, with many customers in a ‘holding pattern’ to see what will happen,” he says. However, the same cannot be said about neighbouring countries, where the market is growing. 

Says Harris: “One market in South Africa that has picked up is food safety. The local food processing and manufacturing sector has grown, and our market is becoming more educated. Consumers are scrutinising labels on packaging and challenging companies, so food safety has become even more important.

analytica Lab Africa 2023 is part of Messe Muenchen’s worldwide network of exhibitions and the only trade fair for laboratory technology, analysis, biotechnology and diagnostics in South Africa. Over 230 leading brands are set to participate in the upcoming analytica Lab Africa 2023, giving visitors an update on the latest trends and innovations in the world of lab technology, diagnostics and analysis solutions. Analytica Lab Africa will be co-located with IFAT Africa, the leading water & waste, recycling and environmental technologies trade show.

Running from 5-7 July at the Gallagher Convention Centre, analytica Lab Africa will feature a strong supporting programme of workshops and demonstrations.