Industry & Retail
From The Report: South Africa 2016
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One of the top manufacturing powerhouses on the continent, South Africa has a strong industrial tradition dating back 150 years. The past few decades, however, have posed challenges to the industry, with external and domestic factors weighing on sector growth. To help revitalise the industry, the government and industry leaders have been working to stoke growth and develop value-added industries. By autumn of 2015, some industry pressures were showing signs of easing, with industrial action coming to an end, and new power and water infrastructure coming on-stream. While some structural issues remain, particularly in the realm of labour legislation and education, the government’s industrial strategy has allowed the sector to maintain momentum, with investment incentives and close cooperation with investors helping to offset downside risks to a degree. Over the longer term, manufacturing will be buoyed by growth across Africa, which should support higher sales. South Africa also has a well-developed retail sector ¬– one of Africa’s largest and most affluent markets – with a sizeable portfolio of major domestic players. While recent macroeconomic difficulties have affected certain segments of the market, the retail sector has continued to grow, drawing in a number of new international brands looking for an entry point to the rest of the continent. Their arrival underscores the sector’s sound fundamentals, and the market looks set to remain highly competitive and active in the coming years.

This chapter contains an interview with Andre de Ruyter, CEO, Nampak.

Articles from this Chapter

Overview

A rock of stability: The economy’s leading segment weathers the global downturn
OBG
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Among the manufacturing powerhouses of the continent, South Africa has a strong industrial tradition dating back 150 years. The past few decades have been difficult, with external and domestic factors weighing on the sector, but the government and industry leaders have been working to stoke growth and develop value-added industries. In doing so they can capitalise on the country’s industrial base, ample natural resources and rising position as an exporter to the fast-growing markets of Africa and…

Interview

Counting costs: OBG talks to Andre de Ruyter, CEO, Nampak
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Interview:Andre de Ruyter What factors are driving demand for packaging products across markets in Africa? ANDRE DE RUYTER: In common with the rest of the continent, South Africa’s rising middle class has led to increased demand for fast-moving consumer goods (FMCGs) that require packaging, which tends to be correlated with consumer demand and spending. We have seen strong, sustained growth in demand for beverage cans in particular, with growth rates far in excess of GDP growth at around…

Analysis

Wheeling along: Although growth has slowed, it has not stalled
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The automotive industry is the biggest contributor to manufacturing GDP and one of the most dynamic parts of the segment. While other industries are struggling, automotive firms have proven resilient, due to the segment’s strong degree of integration, with domestic component suppliers flourishing, a solid policy framework and export diversification. Major Driver The broader automotive sector contributed 7.2% to GDP in 2014, according to the Automotive Industry Export Council. The sector accounted…

Analysis

Picking up the pace: Population demographics helping support the retail segment
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Around the world, fast-moving consumer goods (FMCGs) tend to be more resilient to economic volatility than other manufactured products. This category of low-cost goods, sold quickly, includes a range of consumables like processed and perishable foods, soft drinks, basic toiletries, beer and basic pharmaceuticals. FMCGs are less discretionary than electronics and automobiles, low-margin and high-volume. Market Performance The FMCG segment has ridden out several years of economic fluctuations in…

Overview

Selling points: The retail environment is challenging, but growing
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One of Africa’s largest and most affluent markets, South Africa has a well-developed retail sector, including a number of major domestic players. While recent macroeconomic difficulties have affected parts of the market, it has continued to grow and draw in a number of new international brands looking for a launching-pad to the rest of the continent. Facts & Figures The retail market grew 2.4% in 2014, according to Statistics South Africa, an official body. This is respectable growth, almost…

Analysis

Driving riches: While the car segment struggles, luxury goods are sustained
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The retail sector in South Africa has seen mixed fortunes in recent months, with a slowdown in vehicle sales, but encouraging news in luxury goods. New passenger vehicle sales, which constitute just under two-thirds of overall automotive sales, fell 9% yearon-year (y-o-y) in September 2015, on top of a 8.2% y-o-y decline in August, according to the Department of Trade and Industry. However, y-o-y vehicle exports increased 14.3% in September 2015, over the same period the year before. Auto sales are…