Furniture manufacturing industry crafts plans to stimulate sector
The South African furniture manufacturing industry, which has shed thousands of jobs in recent years, partly due to cheaper imports, is considering plans to stimulate the sector.
The sector is calling on the government to enforce its procurement guidelines which are meant to prioritise local suppliers.
The furniture manufacturing industry, which produces kitchen units, office desks and chairs among other products, contributes approximately 1% to SA’s gross domestic product and employs more than 26,000 people in about 2,000 factories. In the early 2000s the sector employed about 50,000 people in 3,500 manufacturing plants.
The Industrial Policy Action Plan and the National Industrial Policy Framework identified the industry as having significant potential to create jobs by expanding production.
The government also designated the sector for local procurement in the public sector. It has become the preferred supplier for furniture in schools, hospitals and government offices. However compliance has generally been low.
The plan for the sector, called the Furniture Industry Master Plan, will set clear guidelines and targets for the furniture manufacturing industry and guide public sector procurement as part of the government’s efforts to support and stimulate the industry.
“At the recent furniture sector forum, the industry agreed to work with the department of trade & industry (DTI) to create the master plan before the end March 2020. This process will include industry-wide consultation with manufacturers, labour unions, government, raw material suppliers and buyers, ranging from the retail sector to architects, interior designers and property developers,” said Bernadette Isaacs, the chief operating officer of the South Africa Furniture Initiative (SAFI).
The initiative aims to improve furniture producers' competitiveness and market access.
Isaacs said that many large manufacturing industries, including the textile and automotive industries, have a master plan that was co-created by the DTI and industry representatives.
“A master plan brings together all the policy instruments and government incentives that are available to a manufacturer and it combines that with clear manufacturing targets and timelines. This in turn creates a stable environment for manufacturers to invest in their plants and equipment and plan for future export contracts.”
SAFI, the DTI and Proudly South African, an organisation which seeks to influence local procurement in the public and private sectors, also agreed to combine their resources and initiatives to drive and monitor local government procurement towards South African furniture manufacturers.
Isaacs said that according to estimates funding of between R5bn and R8bn would be available annually if the retail, corporate, government departments, state-owned enterprises, as well as institutions such as hospitals, schools and libraries, purchase their furniture from local suppliers.
“We believe that the political will exists, and we will do everything in our power to assist with the facilitation of translating the ‘buy local’ commitments made by the public and private sector into tangible orders for the local manufacturing industry,” said Isaacs.