dti's new action plan gets mixed response
August 6, 2007
By Ethel Hazelhurst
Johannesburg - Some industry players have welcomed the new national industrial policy framework and action plan of the department of trade and industry (dti), while others have responded with scepticism.
The latest version of the industrial strategy was released to the press on Thursday and will be presented to business today.
The dti has targeted four "lead sectors" for immediate action because of their linkages to other sectors in the economy. They are: capital/transport equipment and metal fabrication; automotives and components; chemicals, plastic fabrication and pharmaceuticals; and forestry, paper and furniture.
"The framework could be an anchor for policy coherence, both within the dti and between the dti and other departments, especially in relation to regulatory issues," said Laurraine Lotter of the Chemical and Allied Industries Association.
"It's a positive development that will encourage industry to invest in the future," said Andre Oberholzer of Sappi corporate affairs.
However, Michael McDonald of the Steel and Engineering Industry Federation of SA, expressed doubt about the likely outcome of any policy. Referring to dti's track record, he said: "They tend to define the problems very well, but less often have workable solutions."
"Industrial policy is linked to many industrial sector development strategies," he said. "To implement these, the industries, the dti and other government departments will have to work together to develop implementable plans."
Earlier versions of the policy were unfavourably received by the private sector. "The version presented to cabinet last May was just motherhood and apple pie," said McDonald. However, the latest version follows extensive consultation with stakeholders.
Jorge Maia of the Industrial Development Corporation said the dti had consulted all players over a very long period.
Nico Vermeulen of the National Association of Automobile Manufacturers of SA said dti had arranged workshops to finalise the customised sector programme. And Norbert Behrens of Sasol confirmed there had been consultation "at industry level".
A vital aspect of the action plan is a link between incentives and "reciprocity" by the private sector.
"Incentives would be tied to clear conditions," said Nimrod Zalk of the dti. An example is the arrangement with aluminium producer Alcan. "They get 'developmental electricity prices', but have to make aluminium available in the local market at export-parity prices not import-parity prices."
He said the nature of reciprocity expected would depend on the sector. Lotter said the industry response to the concept of reciprocity would depend on the nature of the requirements.
Vermeulen said in the case of the automotive industry, it would be logical to link incentives to production, adding: "The industry is well positioned to achieve dti's target for the automotive industry of 1.2 million vehicles by 2020."
In the pulp and paper industry, "incentives could help establish a value chain that empowers small players", said Oberholzer.
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