The sustainability of the South African catalytic converter industry in the face of local and international pressures

Abstract

The primary objective of this research is to assess whether the success and continued sustainability of the Catalytic Converter industry is critically dependent on a legislative regime. • The secondary objectives of the research are to: • Document the origins, history, growth and current structure of the industry • Look into the impact that the rapid growth of the South African catalytic converter industry has had on the International Catalytic Converter Industry. • Detail the short and long term prospects of the industry as seen by all the relevant role players, including identifying the risks facing the industry from, amongst others, legislative changes. • Determine the key factors required to ensure the industries on going success and long term sustainability in South Africa. • The intention of the Research Report is to be very focused on the industry in question. The strategy would therefore not be to look for possible impacts on other areas of the economy or the possibility of a replication of this industry growth in another field. • Factual research for this project was done by taking extracts from newspaper and magazine articles to supplement the information gathered during the interviews. Structured interviews and questionnaire responses were completed by top management of South African catalytic converter companies, members of the catalytic converter interest group and other relevant bodies. • The information collected from the respondents was collated into a tabular format wider specific headings to allow it to be analysed to in order to gam an widerstanding of the importance placed on each point by the participants. • The responses allowed for the origins of the industry to be identified and its history to be traced in conjwiction with information from other more formal sources. What was abundantly clear from the respondents was that without any action the catalytic converter industry as it stands now would cease to exist. • The main ideas that came forward as regards what must be done to ensure the sustainability of the catalytic converter industry in South Africa can be divided into two broad categories being: • The governments involvement • The corporate strategies that are needed. • The ways in which the government could get involved included: Replacing the Motor Industry Development Program with another scheme in the form of something like: Reduced income taxation rates International transport assistance General Export Incentives Scheme Low interest working capital loans Local government assistance Productive Asset Allowance Scheme Foreign Exchange Earnings Incentive Scheme Foreign Direct Investment Scheme Reduction of crime in the country Increasing stability in the country and its neighbours Negotiating with large corporates to increase their involvement in the local economy • The corporate strategies needed include: o o o o o o Reducing their reliance on the MIDP rebates Increasing the world market share of this industry Local government assistance Training and motivating labour Enhancing the links with the international technology suppliers Merging canners to get a sound customer base. There was no doubt in the minds of the people approached that the catalytic converter industry is extremely important to the South African economy. • Just as certain however is that if this industry is to survive into the future, then it is going to take and immense effort from the government and the industry role players to ensure that all the good work done is not destroyed in as short a time as it was set-up.