The International Commodity Summit 2025 (ICS2025) has officially launched, setting its sights on the critical challenges faced by South Africa's manufacturing sector, particularly within the machinery industry. Addressing issues such as policy fragmentation and limited structural transformation, ICS2025 intends to foster meaningful dialogues and collaborative strategies for a robust industrial future.

With South Africa's manufacturing industry at a pivotal crossroads, stakeholders are increasingly concerned about the detrimental impacts of competing policies, inefficiencies in regulatory processes, and the slow pace of necessary transformations. Recognizing the urgency inherent in these challenges, ICS2025 aims to unite leaders from government, industry, and civil society to discuss innovative solutions and actionable frameworks.

South Africa continues to lag as neighbouring BRICS nations like China excel in the sector with vast and speedy technological advancements. It is important to note that South Africa still boasts a well-developed manufacturing sector that accounted for more than 1.6 million job creation, and made up 13.0% of the country's gross domestic product (GDP) in 2024; and South Africa’s tractor sales increased by 4% year-on-year in September 2022, despite economic challenges.

According to data from Statistics South Africa, the food and beverage sub-sector was the largest contributor to sales (22.3%) in the last quarter of 2023 followed by basic iron and steel, non-ferrous metal products, metal products and machinery (20.9%) and petroleum, chemical products, rubber, and plastic products (20.1%).

ConsTracks360, a South African consulting firm confirmed that the South African post-pandemic construction industry experienced a soar in growth of Compound Annual Growth Rate (CAGR) of 5.8% between 2023-24, outpacing the country's GDP by over four times as much.

Chief Risk Officer at Lula Business Funding, Garth Rossiter stated that South Africa’s first dedicated Small Medium Enterprises (SME) banking platform can confirm these statistics. Rossiter notes that in 2024 the construction sector was the fastest growing sector in South Africa, and even experienced growth in the last quarters of 2024.

However, the average South African business owner still faces major challenges that range from load shedding to labour shortages, and supply chain disruptions, and lack of access to funding. All these major problems affect project management, cut into profit margins, and dry up cash flow.

Moneyweb confirms that the construction sector liquidations went up with 32% with 94 South African construction companies closing their doors in 2024. The construction sector experienced a great decline in 2024 because of a shortage in construction projects in precedent years, but industry specialists confirmed a surge in 2024 and coming years.

PwC’s South Africa Manufacturing Analysis 2024 report noted that the manufacturing sectors may experience nominal GDP growth by an average rate of 5.7% per year over the next 10 years.

“It is still important to note that the growth of governmental investments in large construction projects, the Construction Industry Development Board (CIDB) expects strong demand for contractors, subcontractors, and construction professionals over the coming years”, the report stated.

However, the need for digital and technological advancements is what South Africa needs to transform the manufacturing and agricultural sectors, as South Africa’s loadshedding crisis continues to persist. Other main challenges include underinvestment, rising costs, and logistic disruptions – yet not limited to these factors.

The potential solutions include a government intervention and partnership with the private sector partnerships – as innovation hubs can support Research & Development efforts. Also, streamlining regulations to improve governance to enhance transparency. Promoting regional integration can help unlock the growth potential for Africa's manufacturers.

Another pressing issue is the lack of speed in automation transformation and employee reskilling as the use of artificial intelligence (AI) can foster an environment that provides rapid workload completion.

South Africa’s Transnet dilemma is a major problem that the ICS2025 summit may address – with the ongoing changes to procurement rules, the BEE codes, and the incentive procedures that increase risks and uncertainty for investment.

The cause of the Transnet stagnancy is the lack of clear guidelines, weak verification, enforcement processes, and the lack of insufficient coordination between the relevant government departments, and capacity constraints at the governing department. Transnet as a case study proofs that technology advancement is not the only facet lacking but that policy plays a pivotal role in getting our manufacturing to its peak.

“The future of South Africa’s machinery industry greatly depends on our ability to cohesively transform our policies and industrial practices,” said  Cherrylee Samson, Vice President at Hibarri.

Samson notes that the summit’s mission is to create an inclusive platform where diverse voices can gain equal footing and collaborate on solving systemic challenges, and providing the necessary dialogue needed to drive digital and technological transformation.

The summit scheduled to take place from the 14 -17 July in Cape Town, the ICS2025 will feature keynotes from industry thought leaders, panel discussions tackling critical topics, and interactive workshops focused on pragmatic strategies.

By bringing together a mix of local and international actors, ICS2025 aims to harness a wealth of expertise and insights necessary for transforming policy frameworks to meet the evolving demands of the industry.

Attendees can look forward to a space that emphasizes not just on dialogue but also the importance of establishing robust networks among stakeholders. By sharing best practices, among others, the summit hopes to compile a blueprint aimed at promoting sustainable, structural change within the machinery industry. 

ICS2025 is an inclusive global summit targeted at tackling significant issues pertaining to South Africa's machinery and manufacturing sectors. With a focus on fostering collaboration and innovative thinking, it aims to elevate discussion on policy frameworks and their alignment with industry development for sustained growth.