Jump-off point for industrialization

Business leaders say South Africa can spread modernization to the continent

Raising the level of the economy, promoting inclusive growth and continuing to learn from the Chinese model are three of the key factors that could help South Africa successfully address poverty, inequality and unemployment.

Speaking at the two-day Hisense Export Strategy Conference in Cape Town recently, South Africa's Trade and Industry Minister Rob Davies also stressed that industrialization and infrastructure development were critical elements in implementing inclusivity in the economy.

"For us as a country, industrialization is fundamental and we need to move up the value chain. Infrastructure is necessary to support and underpin industrialization. It can also be a basis to support industrial development, because infrastructure rollout programs create demand for new factories.

"We also need to support new innovative technology coming to our country and transferring those technologies to our people. I believe that these elements will enable us to reach a inclusive growth," says Davies.

The Hisense conference saw partners from Africa, the Middle East and South America visit the Mother City to discuss trade relations and tour the Hisense factory in Atlantis, which is 40 kilometers north of Cape Town's central business district.

For Hisense, the conference was more than an exercise in showing off its local operations. In the past, some manufacturers treated Africa as a dumping ground for inferior quality electronic goods and old stock. Davies says South Africa could learn from the Chinese by promoting investment both domestic and foreign.

"One of the things that is interesting about Hisense in particular, it is one of the first Chinese investments that came to South Africa and located itself in value-added industries. The People's Republic of China changed from being the net recipient of foreign direct investment to becoming net investor outside of the borders of China," he says.

Davies also defended his government's policy on black industrialists, saying it was important for the government to promote a much more inclusive pattern of economic growth.

"We need to include more historically disadvantaged people in the manufacturing sector. It is for this reason that we have taken a decision to support black industrialists on top of the BEE (black economic empowerment) programs, so that we actually assist to create many more black people who are in fact leaders of the industrial enterprises in the country."

Davies says South Africa has the capacity to produce quality products.

Hisense General Manager Li Youbo says Hisense was voted among the top five performing companies in the country. Li says Hisense aims to produce 270,000 TV sets and 210,000 fridges in 2015 in the country. The company's strategy involves using South Africa to expand exports to Africa and create jobs, Li says.

Hisense and the China-Africa Development Fund understood the potential of the manufacturing sector and jointly invested in the South African Home Appliance Industrial Park.

Hisense says its strong commitment to the continent is demonstrated by the fact that its Atlantis factory employs over 600 workers from the local community, and it has established distribution channels in 14 African countries.

The second day of the conference was devoted to listening to the challenges faced by African trade partners, as well as proposals for possible solutions.

"It is true that for Hisense, Africa is a key market, and with a local factory providing quick turnaround times for orders, South Africa provides the perfect platform for distribution," says Keith Pereira, Hisense South Africa export manager.

"This is why this 'unconventional' conference is so vital, since for Hisense it's not just about pushing into Africa. It allows us to listen to what our trading partners are saying about their respective markets and respond to their concerns," says Pereira.

African countries belonging to the Southern African Development Community benefit from trading through Hisense South Africa by enjoying reduced trade rates.

African trade partners ordering from South Africa can also expect a much faster turnaround time in the delivery of goods, while containers can be mixed with different types of electronics, which is not possible otherwise.

Hisense partners also benefit through marketing support through the South African office, with the service department also available to them.

Alex Zhu, deputy general manager with Hisense International Co Ltd, addressed the delegates on the company's international vision, while Li discussed the company's performance locally.

"Growth is not an easy task and it takes dedication to achieve such rapid results. This is why we want to not only highlight Hisense's achievements, but also help share our knowledge and assist with growth in other markets," Li said.

The company, which manufactures flat panel TVs, household appliances and mobile communication devices, is recognized as a global top 10 player.

Recently, Hisense also had the opportunity to show its corporate responsibility.

The company spread some good cheer by donating a state-of-the-art refrigerator to the Southern African Foundation for the Conservation of Coastal Birds in the Western Cape.

This will assist the organization in caring for 300 baby penguins.

The foundation is a leading marine-oriented nonprofit organization that has treated more than 90,000 oil-coated, ill, injured or abandoned African penguins and other threatened seabirds since 1968.

Independent research showed that the wild African penguin population was 19 percent higher directly due to the foundation's efforts.

Wesgro, the Western Cape Tourism Trade and Investment Agency, put feelers out to their network of businesses and Hisense South Africa came to the foundation's rescue with a new, energy efficient 730L double-door fridge.

Councilor Kenneth Kempt Horne, chairman of the City of Cape Town's Energy and Climate Change Committee, and Jerry Liu, Hisense South Africa director, handed over the fridge to the foundation at their Tableview premises.

Liu said Hisense South Africa is glad to have the opportunity to be a donor. "Our factory in the Western Cape has been established, which will improve local employment rates."

For China Daily

(China Daily Africa Weekly 08/07/2015 page19)