SA tool company smiling to the bank because of coronavirus
There are growing calls for SA to strengthen its own manufacturing capabilities to lower the reliance on cheap, Chinese imports, which are now drying up thanks to the virus.
In a statement on Monday, the tool-making company Lasher said they had seen a growth in new business orders as a result of the outbreak of coronavirus in China and the closure of the Asian giant’s manufacturing in an attempt to stem the spread of the deadly virus.
Albert Louw, Lasher Tools’ marketing manager, said: “For the first time, a big local retailer placed a multimillion-rand order with Lasher for products that the company has never bought from us before.”
The order was a direct result of the curtailed supply of tools from China.
The outbreak of the novel coronavirus was first reported in Wuhan, China, on December 31, 2019, according to the World Health Organization (WHO).
Worldwide, a total of nearly 80,000 cases of the virus have been reported, with more than 97% in China, as of February 24.
More than 2,600 people have died, but only Egypt and Algeria have reported any infections so far in Africa.
On January 30, the WHO declared the outbreak a global emergency and set up a committee to oversee its response. The mandatory closure of Chinese factories left a massive gap as the country is the world’s largest manufacturing economy. Lasher said that these closures have provided opportunities for South African manufacturers, including getting in fresh orders for products as well as reaching new consumers.
Louw said that, more than ever before, South African companies and consumers should support products made by local manufacturers. Lasher employs more than 800 people at four local factories.
“Such support would translate into greater job security throughout the manufacturing value chain at a time when local economic growth is stagnant, and unemployment is near record levels.
Louw said local manufacturers needed to stand together to work with the government to maintain and expand the sector, which until recently had “faced an increasing onslaught from low-priced imported Chinese goods”.
The South African manufacturing industry has declined from 20% of gross domestic product in 1994 to 14% today. The local sector continues to contract, and, in 2019, South African manufacturing output decreased by 0.9% when compared with 2018, according to Statistics South Africa.
Chinese imports have had a detrimental impact on local manufacturing, jobs and reduced demand for local goods and services.
Lasher tools argues they are higher quality and last longer than their Chinese equivalents.
“Lasher equipment lasts nine to 45 times longer than competing imported Chinese equipment,” Louw said.
In a recent report supporting this issue, Eustace Mashimbye, chief executive from Proudly SA, said: “With China’s manufacturing output hamstrung by the coronavirus, South Africa has an opportunity to review what it imports and capacitate local industries to secure the supply chain of local products. While we do not in any way celebrate what has befallen China, and, like the rest of the world we join in sending our sympathies and hopes for a speedy end to the infection, we have to recognise that it exposes the vulnerabilities of markets to single-supplier sources and offers opportunities to others to strengthen their own domestic capabilities.”
(Edited by Charles Cilliers)
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