1. NAFCOC-Input Industrial Policy Action Plan

2. Industry Size: The current industry is worth an estimated R1.161tn made of the following major groups: (Stats SA-December 2009) Food and beverage- R240.7bn (15.4%) Textiles, clothing, leather & footwear- R38.3bn (4.9%) Wood and wood products, paper, publishing & printing- R101.8bn (10.2%) Petroleum, chemical products, rubber & plastic products- R269.5bn (22.1%) Glass & non-metallic products- R36.3bn (4.8%) Basic iron & steel, non-ferrous metal products, metal products- R226.3bn (22.9%)

3. Industry Size (continued): Electrical Machinery- R37.9bn (2.5%) Radio, television & communication apparatus & professional equipment- R14.3bn (1.1%) Motor vehicles, parts & accessories & other transport equipment- R139.6bn (10.9%) Furniture & other manufacturing division- R56.4bn (5.2%) Food & beverages, Petroleum, chemical products, rubber & plastic products, Basic Iron & Steel as well as Automotives are the biggest contributors

4. Purpose: IPAP aims at promoting long term industrialisation and industrial diversification beyond the current traditional commodities and non-tradable services. Expanding production in value-added sectors with high employment and growth multipliers that compete in export and domestic market against imports. It places emphases on labour absorbing production and services sectors. Ensuring increased participation of historically disadvantaged people and region in domestic economy. Ensuring a shift from being consumption and to being a productive country.

5. Critical Sectors: First Cluster (new areas of focus)  Metals fabrication, capital and transport equipment, green and energy saving industries and agro-processing. Second Cluster (broadening from first IPAP)  Automotives and components, medium and heavy vehicles,  Plastics, pharmaceuticals and chemicals;  Clothing, textiles, footwear and leather; bio-fuels;  Forestry, paper, pulp and pulp;  Cultural industries and tourism and business processes Third Cluster (Sectors we have potential to grow)  Nuclear, advanced materials and aerospace

6. NAFCOC, Government Interventions: Increasing awareness of IPAP to SMME’s  Seminars  Information workshops  Skills development Identifying infrastructure for SMME’s  Developing business plans for township, rural industries and former homelands Capacity Building to SMME’s  Manufacturing Supplier Development Programme  Technology transfer to rural areas

7. NAFCOC, Government Interventions: Identifying industries & developing fact sheets on each area  Appointment of service providers Identifying Specialised, High Impact/High Growth Industries  Cluster programmes Import substitution of identified products  Clothing/food Supply to Government and Agencies

8. NAFCOC, Government Interventions: Facilitating Procurement, Market Linkages  Preferential Procurements/Set Asides  Government, parastatals and big business  Link shopping centres to light industry manufacturing Automotive parts manufacture promotion and linkages  Decentralize industry to allow for SMME components manufacturing Beneficiation of raw materials  Ownership  Processing  Consumption  Export Surplus

9. NAFCOC, Government Interventions: Agro-processing, stable food production  Land restitution on deals  Investment in Production Plant Alternate energy, Independent Power Producers  New Plants established  Enterprise Development Manufacturing of Pharmaceuticals  New/Generic medicines

10. Impact of the Intervention: Increased investment in domestic economy and region Increased competitive domestic economy and region Support meaningful Broad Based Black Economic Empowerment (B-BBEE) in all 3 spheres of government and in State Owned Enterprises (SOE’s) Intensify campaign against customs fraud, under-invoicing, smuggling and illegal imports. Counter anti-competitive practises

11. Conclusion: NAFCOC is supportive of the Government’s Industrial Policy Action Plan in that it would unlock the potential of each of the industrial sectors to the benefit of the SMME’s and further enhance B-BBEE. In the industry which is worth about R1,161 trillion our level of engagement with Government should result in at least 10% of the procurement and business opportunities being for SMME’s (R101 billion).Particularly PDI’s) In order to break the barriers to entry, the Government should increase subsidies and support emerging entrepreneurs.