South African businesses pledged billions of rands towards localisation at the Proudly South African Buy Local Summit and Expo with the goal of revitalising the economy and creating thousands of new jobs. Localisation remains at the heart of government’s economic recovery strategy, as the Department of Trade, Industry and Competition (dtic) and National Economic Development and Labour Council (Nedlac) parties aim over the next five years to reduce South Africa’s reliance on imported non-oil products and replace them with local goods and services.
Proudly South African Chief Executive Officer Eustace Mashimbye explained, “Localisation is a tried and tested way in which the local economy can be developed, grown, and jobs created. Localisation aims to balance trade within the country by importing fewer goods that can just as easily be manufactured in South Africa.”
Highlighting the importance of these commitments, Mashimbye added that private sector investment was crucial to stimulating local businesses and job creation.
“The empowerment agenda will significantly benefit from the localisation commitments that have been given. More jobs will be created, and skills taught. New businesses will enter a secure market where they know that someone will buy from them,” he said. “This will improve the living circumstances of entrepreneurs and those they employ, and will further help to boost the GDP and to develop infrastructure within the country.”
Private sector partners outline localisation initiatives
During the Buy Local Summit, prominent companies from a variety of sectors ranging from banking to clothing, automotive and FMCG, outlined their localisation achievements to date and detailed their investment plans for the future.
Standard Bank’s Head of Supplier Development, Kholofelo Shaai, noted that the bank is currently rolling out engineering and technology skills development programmes in strategic partnership with companies such as AWS, Microsoft, and Salesforce, who are expected to spend at least 30% of their contracts with specifically identified local small, medium, and micro enterprises (SMMEs), ensuring that the hard skills from the bank’s educational programmes are utilised appropriately.
“As part of this initiative, we seek to empower local SMMEs to attract offshore spending, ensuring that we do away with skills dependency by 2025,” she said.
Tony Da Fonseca, the Managing Director of the OBC Group, stated that the company remains dedicated to helping the local economy thrive through emphasising local procurement and selling unique, locally made products in the OBC stores.
OBC has launched the Kasi Braai Master initiative, giving local street hawkers and vendors the opportunity to advertise their businesses nationwide at no cost, and has further formed a partnership with SA Music, an Open View channel that plays only South African music. Finally, OBC stores now have an OBC brand of goods in their stores endorsed by Proudly South African.
South African Breweries (SAB) Corporate’s Brand Director, Sphe Vundla, stated that the company has launched a number of exciting localisation initiatives in South Africa. In the agricultural sector, SAB has already helped 920 emerging farmers to increase barley production. It has further invested over R200 million into its SAB Thrive Fund to facilitate enterprise development, which has led to successes such as the establishment of the first black woman-owned hops farm in George in the Western Cape.
“SAB also invested R2 billion in 2021 into its South African operations at a time when such capital investment is sorely needed,” he said.
The Foschini Group (TFG) mentioned plans for significant investments in the local economy over the next three years. TFG Managing Director of Merchandise Supply Chain, Graham Choice, stated that 30 factories, which translates to a new factory every one-and-a-half months, will be built over the next few years to expand production capacity, enabling the group to achieve a target of 30 million pieces of locally-produced apparel per annum by 2025.
Each of these factories is expected to employ 250 people, creating sustainable jobs for a variety of unskilled, semi-skilled, and skilled individuals.
“Our local employment will rise from today’s 2,830 individuals to 11,000 individuals working in our Quick Response Unit by 2025,” said Choice. “This will push our local spending from R1.9 billion to R4.3 billion in 2025.”
PG Bison CEO Gerhard Victor mentioned that the company already boasts 95% local input, which includes growing its own trees to produce its wood products. He added that the company would be building new production plants which will create numerous additional employment opportunities during construction and permanent opportunities once the plants are open.
“We’ve just finished a R560 million project, and we are now investing a further R2.5 billion in localisation and industry. We support both the Furniture and Forestry Master Plans as set out by the President,” he said.
Aspen Pharmacare Senior Executive, Stavros Nicolaou observed that while it was difficult for Africa and South Africa initially to secure COVID-19 vaccines, the company was now producing its own vaccine, Aspenovax. Aspen will be investing further into local supply chains for other elements including vial and packaging.
“Aspen has now committed along with the dtic to localise the suppliers of the vials, material, and other elements so that these can be manufactured in our country and on our continent,” Nicolaou said.
Proudly South African welcomed these and other private sector commitments made by Absa, Nissan, NAAMSA and the SA Canegrowers’ Association, observing that it was gratifying to see local businesses standing together to invest in local manufacturing.
“This speaks of hope for a better future for more South Africans, driving sustainable job creation and uplifting the economy,” concluded Mashimbye.