The Case For Local Manufacture

01 

Executive Overview.

• Public procurement is one of the key industrial levers in the Industrial Policy Action Plan (IPAP). The revised Preferential Procurement Policy Framework Act (PPPFA) regulations, which came into effect on 7 December 2011, empowers the Minister of Trade and Industry to designate industries, sectors and sub-sectors for local procurement at specified levels of local content
• Through local procurement, a policy lever is provided to minimise import leakages
• An important strategic approach is to use government’s leveraging muscle as a ‘large buyer’, to  influence how much is locally manufactured, to promote sustainable growth in the manufacturing sector, leading to new business opportunities, job creation and skills development.

02 

Local Content Thresholds & Preferential Procurement.

All national and provincial departments, all municipalities, all entities listed in terms of Schedules 2 (Major Public Entities) and 3A (National Public Entities) and 3B (National Government Business Enterprises) as well as all other government agencies and State Owned Companies are required to adhere to the Instruction Note as issued by National Treasury in relation to the procurement of goods and services where minimum local content thresholds have been prescribed

The stipulated minimum threshold percentage for local production and content for the different types of valves products and actuators is 70%

Suppliers are required to meet and where possible exceed the prescribed minimum content threshold in order to continue providing goods and services to the public sector.

03 

Benefits of Local Manufacture.

• Local manufacture will leverage on Government preferential procurement policiesLocal manufacture will leverage on Government preferential procurement policies
• Reduction in lead time due to locally sourced products
• Cost savings due to locally sourced products/parts/services
• Reduced plant downtime
• Manufacturing under license allows for technology transfer & innovation
• Windfall effect creates jobs in the foundry & service & repair sectors.