After more than two decades of decline, the SA tooling industry has launched an ambitious project in an effort to stem an alarming skills shortage crisis that is threatening to impede the sector's growth.
SA's tool, die and mould (TDM) industry says there is a critical shortage of designers, artisans, engineers and project managers. It has now put in place an intervention programme, driven by the national tooling initiative (NTI) that will address the most critical areas.
The national programme manager of the NTI, Dirk van Dyk, says the decline in the industry can be blamed on a depleted skills base, lack of capital expenditure on equipment as well as the decline in SA's armaments and nuclear industries since the late 1980s.
Tooling commonly refers to the equipment used to convert raw material into a required shape and is crucial to the manufacturing industries.
Van Dyk predicts that demand from these key sectors will exceed R6bn by 2008, but SA is producing only about a third of the tooling locally. The local automotive industry alone imports tooling worth R3bn/year.
A key component of the programme, says Van Dyk, is to turn SA's competitiveness around through specialisation. The five driving programmes to achieve the rehabilitation of the industry are:
- Skills and expertise development;
- Capacity expansion through small, medium and micro-enterprises ;
- Technology recapitalisation;
- Competitiveness improvement and export development; and
- Public-private partnerships.
The NTI programme aims to turn the tooling industry around by 2014 with its job-creation targets growing six fold, from 3 000 in 2006 to 18 000 in 2014. The entire programme is expected to cost around R9bn, with funding coming from industry, government and the EU.
The tooling skills initiative comes in the wake of a detailed report released by the SA Institute of Race Relations last week, which confirms that SA has a dire skills crisis.
The author of the report, Marius Roodt, says practically every sector which relies on skilled or semi skilled labour is experiencing some sort of skills deficit, which is a worrying obstacle to economic growth in the country.
According to the report, other than technical and academic skills, SA has shortages of engineers and artisans, it lacks sufficient draughtsmen and there are not enough accountants. The number of teachers is at an unacceptably low level, and SA does not produce enough PhD graduates or research papers.
According to trade union Solidarity, SA has only 10% of the number of artisans it had 20 years ago.
For example, according to the Steel & Engineering Industries Federation of SA, in 2006 there were 3 400 apprentices in training in the metals industry, compared with nearly 13 000 in 1982.
Early in 2003 Sasol commissioned the National Advisory Council for Innovation (NACI) to conduct a resources study on the SA construction sector. In the report, the NACI estimated that the country lacked more than 5 600 skilled artisans, of which more than 2 000 would be needed for maintenance shutdowns.
Petro chemical companies are required by law to shut down their refineries and other plants at least once every four years and usually require an additional 8 000 artisans to carry out the work.
The situation became so dire that, from 2002, companies were forced to import the skills they needed, mainly from the Far East and the US. At the most recent shutdown at its giant Secunda complex, Sasol had to import almost 2 000 fitters and turners, welders and other artisans from Thailand.
Oil companies are now hoping that as a result of a recently established oil, gas and chemicals manufacturing skills development project, 1 200 skilled artisans will be trained for the sector by March next year.
The manager of the skills training project, Sasol's Mike Macrae, says the current average age of artisans is about 56, which means at least half of this workforce is expected to retire within the next five years. "It is my personal opinion that the situation will get much worse before it gets better," says Macrae.
In May 2004 R25m was allocated to train about 1 000 new artisans up to a level two qualification.
But the funds were insufficient and the industry had to bail the project out by R8m, which eventually allowed 665 learners to finish the course. Macrae estimates that it costs between R50 000 and R55 000 a learnership.
In July 2006 government allocated R60m more for a new phase, with Sasol committing R140m. The new programme started in January 2007 with 944 learners and is expected to run over 30 months.
In August this year, Macrae applied for a further R100m, which he says will allow for another 1 700 artisans to be trained by March 2011.
But even with the crisis interventions, it is unlikely that the skills shortage will be stemmed any time soon.
According to government's Joint Initiative on Priority Skills Acquisition, SA will need anything between 50 000 and 80 000 skilled artisans by 2010 if it is to meet the country's needs.
Macrae says the decline happened over at least a decade and will probably take as long to correct.
"We have just not made the artisan profession attractive enough to new learners, and this will be a good place to start," he says.
But even if government succeeds in turning the tide, it is still difficult to prevent the loss of trained artisans to emigration or the lure of better contracts and pay from international companies.
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