Tough trading conditions, worsened by ‘unfair’ trading practices by international suppliers, are hindering progress of the South Africa’s pressure vessels industry, laments industry body, PEMA.
South African mines need high quality pressure vessels for different applications, hence, the pressure vessels manufacturing industry has to be in a robust state. However, sadly, the local industry has been “under significant strain”, in the words of the Pressure Equipment Manufacturers Association (PEMA) Executive Director, Ken Dewar, and is operating below its real potential.
This is not a fleeting scenario; if truth be told, the pressure vessel manufacturing industry has been sluggish for the a few years now, African Mining Brief is told.
Dewar singles out several factors behind this trend – decline in capital expenditure projects in South Africa over the last few years, particularly in the mining and mineral-processing sectors; the unrest in the metals and engineering sector industry; and escalating input costs, as well as administered prices, such as power, gas, fuel, port charges and toll roads.
Besides, Dewar reveals, burdensome border controls and bureaucracy have rendered exporting products to neighbouring countries extremely challenging, making matters worse.
Also more profound has been the impact of cheap imports from Asia and ‘unfair’ trade practices.
Large capital project developers have been importing products from Asia, that, although coded under Standard Industry Classification (SIC) as “projects”, do not fall under SIC.
It does not rain but pours for the local manufacturer it seems. Dewar notes that, increasingly, local pressure vessels manufacturers are facing the threat from countries such as Malaysia and Thailand, as well as from Europe.
“Using many non-World Trade Organisation-compliant export incentives, such as State-subsidies, allows for these products to enter South Africa at prices against which local pressure vessel manufacturers cannot compete,” he comments, acknowledging that monitoring the flow of imported products and taking action against companies that are dumping them in South Africa below market-related prices highly challenging.
Striving for relevance
The local industry is fighting to claim what rightfully belong to it. Thus far, learns African Mining Brief, discussions with the Department of Trade and Industry are at an advanced stage. PEMA is part of a broader “metals industry cluster”, which the national employer federation representing metals and engineering industry, the Steel and Engineering Industries Federation of South Africa (SEIFSA) heads.
Another way in which the industry is striving to stay relevant is through developing sustainable skills capacity. Currently, PEMA is working with public–private partnership best practice promotion body the South African Capital Equipment Export Council (Saceec) to establish a training programme for the fabrication and welding industries. The training programme is still work in progress, though, as critical factors still have to be considered, including funding.
Ultimately, PEMA, through its objectives, says Dewar, would like to see the industry realise its full potential to be able to supply mining and other industries with cutting edge technology.