An initiative which began around 18 months ago, with the aim of boosting the competiveness of the local electronics manufacturing sector, has come to a grinding halt.
Danie Jordaan – a consultant contracted by a group of interested parties including the SAEEC (South African Electrotechnical Export Council), component distributors and electronics manufacturers – says he has been forced to call it quits on a proposed submission to ITAC (International Trade Administration Commission) to reduce or eliminate duties applied to selected imported electronic components.
See previous article in Dataweek 11 July 2012.
The following is a condensed list of the issues Jordaan cited as contributing to the breakdown of the process:
* It was impossible to obtain information of size of the market, since import statistics could not help in the calculations as certain components are classified under the same tariff subheadings as other similar but bigger products.
* The complexity of determining accurate and meaningful statistics conforming to the current ITAC classifications.
* Reluctance of firms to meet ITAC’s request for financial statements and business plans.
Failure to surmount these obstacles meant that an application was never submitted to ITAC, since doing so would have meant that ITAC would not have accepted submission of a similar application for a period of 12 months, further harming any near-term future plans of a similar nature.
According to Eileen Leopold, CEO of the SAEEC, ITAC compounded the complexity when it published, without industry consultation, a new questionnaire in the Government Gazette on 22 November 2013, which substantially increased or altered the information required.
She also noted that several of the participating companies were unwilling or unable to supply certain information, and that the decision by some major companies to not participate meant the project did not reach the critical mass it required.
Leopold did, however, single out several companies deserving of credit for the considerable lengths they went to in order to facilitate the process. These include Arrow Altech Distribution, Avnet Kopp, Electrocomp, TRX, TUB, Microtronix, Tellumat, Projects Concern, Landis + Gyr and PFK. Mictrotronix and Projects Concern also hosted ITAC for factory tours in order to discuss the format and type of information required.
Leopold assures that the decision to suspend the project was not taken lightly, and that this endeavour has not reached the end of its road. Danie Jordaan will in future be meeting with ITAC to discuss its requirements and the limitations and difficulties for this sector, which will be applicable to all other sub-contracting manufacturing sectors.
Furthermore, the SAEEC will liaise with the Department of Trade and Industry’s Electrotechnical Sector Desk to look at the prepaid metering sector which manufactures defined products and is therefore not victim to some of the problems facing the broader electronics manufacturing sector.
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