INDUSTRIAL participation, in the form of offset deals, is being negotiated to help strengthen South Africa’s industrial base. The government wants multinationals to invest in projects that will fill the technological gaps or meet the training needs to make industry more competitive. Offset deals for all government contracts worth more than $10-million are now obligatory.
Trade and Industry Minister Alec Erwin and Department of Trade and Industry industrial participation director Vassie Ponsamy last week told the parliamentary trade and industry committee they were working on 13 projects they hoped would be implemented by 2000, generating 1000 jobs directly and 500 indirectly, and $1-billion in revenue, of which $780-million would be exports and $200-million investment.
The most advanced was a proposal from Rolls-Royce to invest $16-million in an industrial park comprising mini-factories with a central service operation that will handle shipping, financing and other commercial transactions. The factories would manufacture components that would be exported directly to Rolls-Royce. The industrial park would earn $116-million in foreign exchange over seven years. It could be built either in Atlantis, Western Cape, or at Coega, Eastern Cape. But the deal depends on whether South African Airways buys seven new Rolls-Royce-powered Boeing 777s. “It all hinges on SAA, which is deciding whether it is the right time to buy,” Ponsamy said.