SA seeks to expand added-value manufacturing

Rob Davies.

Picture: GCIS

Speaking at the opening of the refurbished Johnson & Johnson pharmaceutical manufacturing plant in Cape Town on Tuesday, Trade and Industry Minister Rob Davies said all mineral exporting countries had been hard-hit by the lower commodity prices, as the supercycle ended.

"We have to accelerate our transition and move up the value chain to add value to our products.... We have to industrialise. We are working with foreign investors and manufacturers who are beginning to see value in SA.... We want to provide stronger support and incentives to investors," Davies said.

The decision by Johnson & Johnson - a US multinational and manufacturer of medical devices, pharmaceutical and consumer packaged goods - to build a manufacturing plant in Cape Town showed the country was capable of establishing itself as a world-class manufacturing base.

The industrial action policy plan last year identified the South African pharmaceutical market as the biggest in Africa and among the world's most advanced. The sector employs 9,500 people and a further 25,000 downstream (in specialised logistics, retail and hospital pharmacies).

Department of Trade and Industry data show that SA exported R1.6bn in pharmaceuticals in 2013, of which more than half went to the US, the European Union and Australia.

"SA has the capability to provide a facility for world-class manufacturing, and our people, our operations, our organisations and our ... programmes are able to support and sustain world-class manufacturing," Davies said.

Johnson & Johnson invested more than R300m in the Cape Town plant and employs 130 people. It plans to double its workforce by 2020.