Manufacturing
• Employment in the manufacturing sector has grown
• The closure of mines may bring new manufacturing opportunities
The free state economy is changing. Where before it was very reliant on primary sectors, such as agriculture and mining, it is increasingly growing its manufacturing sector, which now accounts for 12.7% of the provincial gross domestic product. Fourteen percent of Free State manufacturing is classified as high technology.
The most important manufacturing subsector is chemicals. All of the Free State’s chemicals are produced in the province’s northern district around Sasolburg. This subsector amounts to 70% of the province’s total manufacturing output and is dealt with separately in our overview of the chemicals sector.
The other two major manufacturing areas are Harrismith/Phuthaditjhaba and Bloemfontein/ Botshabelo/Thaba Nchu. The latter area increased its share of manufacturing small, medium and micro enterprises from 28% in 1994 to 37% in 2003. Clothing is made in Phuthaditjhaba and Harrismith has a carpet factory. Kroonstad has an engineering works and Aco tractors are made near Hoopstad.
The Free State’s manufacturing profile has grown in tandem with national trends. Growth has been steady since 2003 and, in 2006/07, the sector grew by 5%. The sector was not as badly affected by the economic downturn in early 2009 as some other sectors; figures for February showed only a 2.6% decline on corresponding figures for the same month in 2008. Employment in the sector grew from 9.4% in 2002 to 10.4% in 2006.
After chemicals, the most important manufacturing subsector is food, with textiles (30% of all jobs), furniture, agri-processing, jewellery and engineering products making up the balance of enterprises. The trend has been for these businesses to be on a smaller scale than previously. This has been promoted by various small-business-development initiatives but industrial-development zones have not, until fairly recently, been part of the province’s strategy to boost manufacturing. The Free State Investment Promotion Agency and the Free State Development Corporation are now actively promoting nodal development.
N8 Corridor development
A project designed to provide infrastructure
and stimulate investment in manufacturing is
planned for the N8 route, which runs through
Bloemfontein, from Maseru in the east to
Kimberley in the west. The concept aims to
stimulate development at existing business
nodes and to create new opportunities.
Investors are expected to show considerable interest in a wide range of potential sites and projects, which include a five-star hotel and international conference centre in Bloemfontein; a golf course and racecourse node; a logistics, freight centre and warehousing complex for agri-processing in Bloemindustria; upgrading of Bloemfontein Airport; industrial and warehousing facilities at Botshabelo; and the development of Thaba Nchu’s central business district.
Another major project that will have facilities for manufacturing when fully developed is the Harrismith Logistics Hub.
Other methods of promoting small-scale manufacturing include developing a ‘small-town strategy’ and linking this with Local Economic Development plans.
Attention is being given to the likely closure of gold mines in the Goldfields-Matjhabeng area and what economic activities might replace them. Local communities and entrepreneurs are being encouraged to think of ways of using assets that will be left behind, such as shafts, workshops, boarding houses, recreational facilities and metallurgical plants.
Virginia Jewellery Hub
The central Free State district of Lejweleputswa
is at the heart of the gold-mining industry. The
town of Welkom was designed to cater to the
gold-mining industry, which started producing
in 1951, and the nearby town of Virginia was
chosen as the site of a jewellery school in 2001.
The greater Virginia area has been identified as the hub of a jewellery-manufacturing cluster of industries. This is a result of the vast availability of redundant mining assets that are suitable to be turned into factory space to manufacture jewellery. With the support of the Harmony Gold Mining Company Limited, the availability of raw materials in the form of gold will be guaranteed.
Opportunities abound as there are readily available factory buildings that have been equipped and designed for jewellery manufacturing. Minor alterations would be needed and the investor would need to supply appropriate machinery.
The find by Australian mining firm, Paramount Mining, of a 15.47-carat diamond at its Peakstar Mine has stirred considerable interest. Previous reports of large diamonds at Peakstar include stones weighing 8.2 carats, 6.01 carats and 4.6 carats.
With the recent increase in the number of diamond mines, and the revival of some that were partially closed, the Free State now has five diamond mines. This has obvious benefits for companies in the beneficiation business.
Virginia is home to the Harmony Jewellery School, which was established in 2000 to train students from Goldfields and surrounding area. This was a vital move in providing skills to the local population. The school was a joint venture between Harmony Gold and the United Nations Programme for Small Enterprise and Human Development, with other stakeholders including the Free State Provincial Government, the Virginia Unemployed Labour Association, the Matjhabeng Municipality and the national Department of Trade and Industry.
The Harmony Jewellery School, in association with the Goldfields Further Education and Training College, offers NQF Level 3 to 5 courses in jewellery-making. It also offers a diploma course in cooperation with the Central University of Technology, Free State.
The NQF Level 5 courses started in 2004 and has had more than 100 registered students over the years, while the Level 3 course, a bridging course to prepare students for national diplomas, has trained 80 students. All graduates from the diploma course are employed by the industry. The school also facilitates post-graduate development and product development.
KEY CONTACTS
Consumer Goods Council of South Africa:
www.cgcsa.co.za
Free State Craft: www.freestatecraft.co.za
Free State Development Corporation:
www.fdc.co.za
Free State Investment Promotion Agency:
www.fipa.org.za
Harmony Gold Mining Company Limited:
www.harmony.co.za
National Department of Trade and Industry:
www.thedti.gov.za
South African Bureau of Standards: www.sabs.co.za
