The single biggest barrier to the growth of the South African
jewellery industry is the attitude of many of those involved in the
industry, suggested jewellery manufacturer OroAfrica MD Steven
Nathan in his address the South African Jewellery Industry
Indaba.
“When one attends a meeting of manufacturers, government and
labour, it is like going to a crying game,” he noted.
In March 1999, the gold crisis committee – which Nathan also
addressed – outlined a plan of action to create jobs and a
thriving local jewellery industry.
However, he continued, almost a year and a half since this meeting,
no action has been taken to resolve any of the issues raised at the
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time.
These included a lack of competitive gold loans in South Africa
– the cost of finance for local manufacturers is higher than
it is for jewellers in other countries.
A culture of criminality and low corporate governance exists in
South Africa, whereby manufacturers and other interested parties
are profiting from the purchase of stolen gold.
The third issue raised cosecond hand zenith portable crusher plantsncerned the lack of skills and the need
for training in the local jewellery- manufacture sector.
It also emerged that there is not nearly enough government support
for training to bridge the skills and productivity gaps that exist
between South Africa and other countries.
The steep 14% value-added tax (Vat) on export orders paid by
manufacturers of gold also means that thesedetailed section for duplicators mill manufacturers finance
the government for 45 days on the Vat portion of gold that they
must purchase.
Another barrier to growth is that local manufacturers cannot refine
gold and turn around scrap as efficiently as Italian jewellery
manufacturers, for example.
Furthermore, the lack of technical support to local jewellery
manufacturers in the the form of machinery manufacturers and tool
suppliers is a challenge they face daily.
“No one can develop a world-class manufacturing operation
that is labour-intensive in a country like South Africa with its
current labour laws, as the lack of flexibility in the labour
sector makes start-ups impossible,” commented Nathan.
Another issue raised at the gold crisis committee is that there is
little duty paid on jewellery entering South Africa and, therefore,
this effectively aids illegal operators in avoiding the payment of
duties.
And the final issue tabled is the fact that most jewellery
manufacturers are undercapitalised. Without a skilled workforce,
adequate capital and without dealing with these issues, it is
unlikely that any South African jewellery manufacturer will emerge
as a world competitor, cautioned Nathan.
He also firmly believes that it is myopic – in addition to
being a waste of time and money – of the government to
finance foreigners in setting up bases in South Africa.
Nathan maintains that short-term incentives will only attract
opportunists, who will create employment and benefits for South
Africa, but only for as long as these benefits exist. “The
Italians, Chinese, Turks and Indians, for example, all became
successful when they focused their attention on building
jewellery-manufacture industries in their own countries,”
said Nathan.
To build a jewellery-manufacturing empire, he suggests that
jewellery-manufacture schools, making use of the expertise of the
Italians and Germans, be set up to train the youth.
He also called for more representation of all sectors of the
population in the jewellery-manufacture industry, indicating that
black entrepreneurs will only emerge from a thorough training
process.
In conclusion, Nathan admitted that there is no quick-fix for the
situation, but he also confirmed that there is still hope.