8.6 The major retailers have undertaken to support in principle a BUY LOCAL programme. Early stage discussions have taken place at Nedlac with social partners on the following products. These discussions should be taken further with the industry and with the support of the entire supply chain for each product group to tie the undertakings down to concrete commitments. 8.6.1 Holloware and cutlery. 8.6.2 Garden tools and wheelbarrows. 8.6.3 Roof sheeting and cladding 8.6.4 Wire and wire products 8.6.5 Fasteners 8.6.6 Exercise weights. 8.6.7 Braais and braai equipment. 8.6.8 Garden furniture. 8.6.9 LPG cylinders 8.7 Further discussions at Nedlac identified a set of value-chains, a number of which will assist with demand for local steel. 8.8 The industry recognises using the home market to improve economies of scale and capability and develop export markets. 9 PRODUCT VALUE CHAINS 9.1 There will be major opportunities in climate change resilience. The industry should be pro-active in developing water recycling plants, desalination plants and improved water reticulation and conservation. The extensive water infrastructure (dams and pipelines, reticulation, maintenance of municipal systems) presents major opportunities, which will be supported by the designation of products by the dtic and the focus on localization of the Presidential infrastructure projects. 9.2 There will be major opportunities in the renewable energy industry. Key products include windmill towers, solar panel frames and solar water heating tanks. These opportunities should be written into the project planning by the DMRE and the Department of Human Settlement. 9.3 The DMRE has committed in its Minister’s budget speech in July 2020 to an extensive programme to promote the use of LPG gas in South Africa. The DMRE wishes to see at least 3 million houses using LPG gas for space heating and cooking. The development of new housing provides huge opportunities. The opportunity for the manufacture of gas cylinders is clear and a few projects are being considered. There are attractive opportunities for the use of stainless steel for the manufacture of cylinders. In order to exploit this opportunity, it is necessary to consider whether the refilling of cylinders can be removed from the monopoly suppliers and become a major opportunity for small businesses. The dtic will work with the producers and the DMRE to consider this opportunity. 9.4 Discussions have taken place with the auto industry. The increase in local content in that industry will provide opportunities for special steels (but the volume may not be sufficient to justify major investments in lighter and stronger steels and special finishes). However, there will be opportunities in the new power chains for hybrid and electrical vehicles. The industry is actively involved in discussions with the auto industry for new models coming into production in 2021 or 2022 and with how to increase the local content to 60% by 2035. This is a major challenge for the steel industry and one which it must pursue more actively. 9.5 Discussions have begun with the Minerals Council and the DMRE on how to boost local content in line with the Mining Charter. The mining industry spends about R316 billion per year on consumables, of which about R56 billion is imported. About R20 billion of the spending on consumables is spent on steel and steel products. About R40 billion per year is spent on capital projects, which is substantially down from R55 billion in 2010. Much of this is on civil works, but there is significant spending on structural steel and other steel products. The mining industry is therefore a very important partner for the steel industry. The mining industry is keen to digitize its supply chain and is partnering with the dtic on a project to do that. The tender for Phase 2 of the project has been issued by the IDC. This will allow very significant cost and efficiency savings in procurement for the mining industry and it will allow much better access for the steel industry and monitoring and reporting of local content. It is likely to smooth demand from the mining industry, so allowing for better planning and more efficient production runs of steel products.
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The South African Steel and Metal Fabrication Master Plan 1.0
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