25 October Initiatives Driving Growth - South African Plastics Industry

Transcription

1 25 October 2017 Initiatives Driving Growth - South African Plastics Industry

2 Who are we?, the umbrella organisation for the South African plastics industry is registered as a Non Profit Company (NPC), and is funded by membership fees based on sales of locally manufactured and imported plastics raw material; sponsorships from industry associations and other contributions. Most of the income is from own accredited training activities to the Plastics Industry is a Federation of Associations. Together with our industry associations we play an active role in the growth and development of the South African Plastics Industry. We strive to address plastics related issues, influence role players and to make plastics the material of choice for today and the future represents all sectors of the South African Plastics Industry including polymer producers and importers, converters, machine suppliers, fabricators and recyclers

3 Strategic Initiatives for the Industry 1. Zero Plastics to Landfill 2030 (Circular Economy) 2. Growth through Exports and Import Replacement 3. Innovation and Skills Development 4. Industry support through Public Private Partnerships

4 Apparent Plastics Consumption 2016 Growth vs GDP Growth Domestic Virgin Plastics Consumption (Tonnages) 1,600,000 35% 1,500,000 30% 1,400,000 25% 1,300,000 20% Tonnages 1,200,000 1,100,000 1,000,000 15% 10% 5% % Growth 900,000 0% 800,000-5% 700,000-10% 600, % Tonnage % Growth %GDP growth % Manufacturing GDP growth

5 South African Plastics Market Sectors Europe 2014 Packaging 39.5% Building and Construction 20.1% Automotive 8.6% Electrical and Electronics 5.7% Agriculture 3.4% Other 22.7%

6 Population Estimate in Population Reference Bureau

7 Linear to Circular Economy?

8 PLASTICS SA BOARD Sustainability Advisory Board Smart Growth Minimise the Impact Sustainability Resource Efficiency Bio-plastics Oxo fillers Standards Global and National Networks Research and Development Technical Solutions Recycling data collection Waste Data collection Circular Economy Geo-spatial analysis Marketing & Communication Legislation PPIWMP Design 4 Recycling LCA Separation@Source Packaging promotion Projects Plastics and the Environment Education & awareness Clean-ups Training Recycling promotion Waste Management and Infrastructure

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10 Circular Economy Design for Sustainability

11 Design for Sustainability

12 Availability of skills a problem, apprentices in decline Number of apprentices % Source: Moleke, 2006 Neither SETAs nor industry has bridged the gap 12

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14 Exponential Organisations

15 Current demand from local consumers will not create impetus for growth Source: SA Reserve Bank Trade sector contract by 5.9% in Q1 as private and business purchases slowed down 15

16 Plastics Trade Balance 2016 Rand Value

17 Joint Breakfast Session 13% OF THE GLOBAL OIL WAS PRODUCED IN AFRICA IN ,4 Billion expected POPULATION by % Of AFRICAS POPULATION WILL BE UNDER THE AGE OF 25 US$ 2 TRILLION AFRICA S COLLECTIVE GDP

18 The vicious cycle of deindustrialisation Consumer confidence down Less disposable income Jobs Demand Capacity utilisation Lower capacity utilisation Delayed investment Premature deindustrialisation has serious consequences... It reduces the economic growth potential and the possibilities for convergence with income levels of the advanced economies. Deindustrialisation removes the main channel through which rapid growth has taken place in the past. Dani Rodrik Fewer shifts are worked Retrenchments abound Less investment in skill and training Investment Returns on existing investments are lower less confidence Future investments are deferred or cancelled Higher growth markets are sought Less exports History teaches that a strong economy begins with a viable manufacturing base. Africa must find a viable path to prosperity without passing through an industrialisation phase [and jump to a services phase]. This is not likely to happen. It is by no means clear that it is even possible. Jerry Jasinowski Without a virtuous cycle of investor and consumer confidence, supported by stable policies, South Africa will continue to deindustrialise, without the capacity to move to a services economy 18

19 Decline in manufacturing correlates closely with drastic loss of jobs Since 1989, SA manufacturing has shed half a million jobs, as share of GDP has shrunk If manufacturing were to have an appropriate share of GDP for SA s developmental stage (28 32%), a theoretical to 1,1 million jobs could be created Unemployment at 27.7%, highest in 14 years Manufacturing contracted 3.4% in Q1 19

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21 Creating additional demand for local goods is the key to a virtuous cycle that promotes economic growth which leads to higher demand Demand Stimulate demand for local goods preferential procurement Protect local industries through more assertive trade policies Support industry initiative Jobs Capacity utilisation..which leads to more jobs, more training Investment which boosts investor confidence Sustained demand growth Policy certainty Supportive regulation Competitive incentives and fiscal policy Competitive returns More economies of scale to compete for exports Investment will not take place if demand side policies do not dovetail with supply side policies 21

22 Public-Private Partnerships Clusters Mandela Bay Composite Cluster Automotive Cluster Plastics Manufacturing Cluster KZN PU Cluster Ekurhuleni Skills Development Cluster Gauteng Province SARS Risk Engine Associations Value chain engagement Collaboration

23 Presented by: Anton Hanekom Executive Director Plastics SA Cell: Land line: