Enterprise minister calls for 25-year supply chain plan

4 January 2013

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6 January 2013 | Adam Leach

Malusi Gigaba, South African minister of public enterprise, has called for the development of a 25-year plan to develop and localise supply chains.

Speaking at an event to celebrate the delivery of salt wagons which will carry the commodity from Botswana to South Africa, Gigaba called on South Africa and other countries on the continent to take the initiative and drive domestic capabilities. He praised the capabilities of South African companies such as manufacturer Rotek Engineering and the mining supply chain, but called for further growth.

In particular, he called for a shift away from transactional relationships in favour of more long-term and collaborative working between buyer and supplier, with state-owned companies (SOC) leading the way.

“We cannot achieve our industrial ambitions if we enter into short-term transactional relationships with our suppliers,” he said. “The time has come for the SOC to move towards long-term strategic partnerships with key suppliers who can become industrial champions focused on building complex, technologically-advanced capabilities.”

He called for greater responsibility to move down the supply chain to improve capabilities lower down. In particular, he called for companies currently supplying original equipment manufacturers (OEMs) to take on greater roles: “A key element of this process is moving the status of South African suppliers from a sub-contractor relationship with the OEMs to that of a prime contractor, taking full responsibility for the delivery of a complex value chain.”

In his speech, he also called for greater action to increase trade between African countries, highlighting the importance of trust. He said: “[A] most urgent challenge for Africa is to learn to trust ourselves and each other as business partners, increasingly to do business with one another, to prefer each others’ products instead of always giving business preference to foreign companies.”

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