BRICS states have to continue to work hard to ensure that they create the conducive climate for global firms to see them as a viable option for investment in the developing world. The manufacturing sector in South Africa, which is a major player in BRICS, is seen as an engine for growth and has over the years attracted some of the big global firms. Two years ago, Procter & Gamble announced a major move in Africa, investing $170 million to create a new manufacturing plant in South Africa. The plant will make products such as detergents and feminine hygiene goods to serve markets in Southern and East Africa. Late last year, German-owned car maker BMW SA and its suppliers announced plans to invest more than R69 billion to build a new vehicle plant in South Africa. The company announced that it will stop building the 3-Series and replace it with the X3 sports utility vehicle. BMW SA’s Rosslyn assembly plant is one of four worldwide building the 3-Series. The changeover is due to happen in about 2019, when the current 3-Series reaches the end of its cycle.
Trade and Industry Minister Rob Davies, touched the right buttons when he assured car manufacturers in South Africa and the motor industry in general that there would be no drastic changes or disadvantages that would upset investors, after its current policy the automotive production and development programme (APDP) expires in 2020.
“We will start working on a successor to the APDP from next year and we have said there will be a significant element of continuity in that next programme. Our aim is to build on the success of the APDP,” Davies said.
Another strategic area for growth in the manufacturing sector and which is high in the agenda of big firms which want to invest in BRICS countries is that of reliable energy supply. Indications in South Africa are that interventions at ESKOM are being to pay off and there is reason for optimism. Government is working towards a reliable energy supply to ensure energy security for now and the future; an enabler for economic growth. The Economic Sectors, Employment and Infrastructure Development cluster has articulated several programmes to that end, including the opening of one of six generating units at the Medupi Power Station in Lephalale in Limpopo, which contributes about 800 megawatts (MW) to the grid.
Medupi Power Station will add 4 764 MW to Eskom’s grid once completed and will be the world’s largest coal-fired power station. This is also the fourth dry-cooled, baseload station to be built in 20 years by Eskom, after Kendal, Majuba and Matimba power stations.