SA Capital Equipment Export Council | +27 11 849 7388 | Log In

Challenges and solutions under discussion at VAMCOSA’S first networking session

  • Home
  • VAMCOSA
  • News
  • Challenges and solutions under discussion at VAMCOSA’S first networking session

Challenges and solutions under discussion at VAMCOSA’S first networking session

29 September 2015 | Posted in VAMCOSA News.

Challenges and solutions under discussion at VAMCOSA’S first networking session

The purpose of the networking sessions are to engage with consulting engineers, project houses and third party companies that handle either the procurement process or projects on behalf of state owned entities, including municipalities, specifically with regards to designated products.

Mark Wilson, the current cluster champion, opened the proceedings and provided a brief overview of the Department of Trade and Industries designation and local content requirements relating to valves and actuators, as well as an overview of the Instruction Note issued by National Treasury – applicable, in all instances, with state expenditure.

“One of the biggest challenges that we as local manufactures with designated products are experiencing is conveying the message that local content and the procurement of designated products still applies, even if the transaction takes place through a third party. If the money is from the government, local content must be adhered to”, says Mark Wilson.

The floor was then opened to discuss issues being experienced by the project houses and consulting engineers:

The Tender Process

It came out clearly that in the tender process the local content requirement was not being clearly communicated, nor the calculation of local content as well as the verification process. VAMCOSA has asked that, in instances where there is no specification for local content and valves are required, to please bring this to the cluster’s attention, where the cluster through the SACEEC (South African Capital Equipment Export Council) will take it up through the appropriate channels at The DTI.

Specifying a brand is against the rules of the PPFMA.

Calculating Local Content

Procuring entities are required to stipulate the local content requirements, which in the case of valves is set at 70% local content threshold. Calculating the local content is for some, open to interpretation - some believed that it was simply averaging out percentages, others believed that local content included buying imported products from a local supplier. At the end of the day – the calculation is 70 % of each valve should be sourced and manufactured locally – from the casting through to the end product.

The intended “multiplier effect” is to create jobs locally and stimulate local manufacturing in South Africa.

Exemption

Not all valves can be manufactured locally and where applicable, in instances where local manufacturers cannot meet the requirements in the case of import substitution, whereby an equivalent can be procured locally or the lead-time is too short to develop a local product; the procuring entity may approach the dti for an exemption.

Verification

At present the SABS has been tasked by the dti to verify local content. There are some challenges with SATS 1286, and these are being looked into. The Instruction Note issued by National Treasury is currently in the process of being updated, however the one issued remains in force until such time as the new one is issued.

Penalties Enforced

Local content is not just a buzzword. State-owned entities that do not comply with the Local Content Directive will receive an Unclean Audit – the results of which can have large monetary repercussions if they are looking for finance for projects.

In Closing – “South Africa needs to become a manufacturing giant.” Through designation and local content, we can create sustainable job creation which impacts on all the sectors of our economy from tax, to the health sector, to the education system etc. Simply put, if people have sustainable employment they will pay their taxes, school fees, purchase clothing and food. Crime levels will decrease while the economy rises. All the while creating a South Africa that uses South African products. “Let’s get South Africans to employ South African’s and let the Chinese employ the Chinese.” stated Wilson.

The day ended with one on one discussion, networking and lunch.

About VAMCOSA

VAMCOSA was formed in July 2011 and works within The DTI’s designated cluster parameters. VAMCOSA’s focus is to bring local valve and actuator manufacturers together in order to create a common focus and goal for the respective industries. VAMCOSA provides an effective platform for its members to Lobby Government through designated channels of The DTI and the SACEEC with regard to industry specific concerns.

The aim is to:

Encourage and promote local manufacturing
Promote job creation within the sector
Promote export of locally manufactured valves and actuators
Promote transformation
Create a respected quality marquee
VAMCOSA is available to come onsite and assist your team in better understanding designation and local content, please contact us.


Challenges and solutions under discussion at VAMCOSA’S first networking session
Challenges and solutions under discussion at VAMCOSA’S first networking session
Challenges and solutions under discussion at VAMCOSA’S first networking session
Challenges and solutions under discussion at VAMCOSA’S first networking session
Challenges and solutions under discussion at VAMCOSA’S first networking session
Challenges and solutions under discussion at VAMCOSA’S first networking session
Share This Post:

Related Posts


Comments

comments powered by Disqus
Contact Details
  • 9 Ninth Avenue
    Northmead
    Benoni Gauteng
    1501
    South Africa
  • Get Directions
  • Tel: +27 11 849 7388
    Cel: +27 83 459 3073
  • Monday - Thursday: 8:30 - 17:00
    Friday: 8:30 - 15:00
    Saturday - Sunday: Closed
Join Our Mailing List

Receive Industry news, SACEEC news and news of our Member's activities and achievements on a monthly basis.

We strictly abide by CAN-SPAM regulations by respecting your personal contact details and maintaining a respectful relationship in terms of email etiquette.

© Copyright 2014 - 2017 SACEEC. All Rights Reserved    |    SACEEC Member login