South Africa has a well-established chemicals sector, with revenue in excess of $35.1 billion, making it the biggest chemicals market in Africa. The South African chemicals sector contributes 6% to the GDP and 25% to the manufacturing sector.
The biggest driver in the chemicals sector is the increased demand for specialty and commodity chemicals, such as plastics, paints, and coatings and construction chemicals, as a result of increased consumer spend and the increase in infrastructural budgets. A key challenge is the shortage of skilled engineers, chemists, and artisans, which is slowing further growth in this sector.
Of the 80,000 fuels and pure chemicals types being manufactured globally, South Africa only manufactures 300. The sector is the largest of its kind in Africa and is highly complex and diversified. From a strategic perspective the sector is segmented into 11 sub-sectors excluding synthetic textile fibres, which is listed under the textile industry. They are, with sectoral production depicted in brackets: Liquid Fuels (31%), Plastic Products (20%), Consumer Formulated Chemicals (5%), Inorganic Chemicals (8%), Primary Polymers and Rubbers (7%), Pharmaceuticals (8%), Rubber Products (5%), Bulk Formulated (5%), Organic Chemicals (6%), Pure Functional and Specialties (5%) and Fine Chemicals (<1%).
South Africa has a strong, established sector specialising in the conversion of primary plastics into end products by means of processes such as injection moulding, extrusion, rotomoulding and forming. Plastics manufacturing in South Africa contributes approximately 0.5% to the GDP and 3.2% to the manufacturing sector. The industry’s contribution to the economy is significant, and also expressive of increasingly innovative connections with the green economy. With increased investment and technological know-how, the plastics industry in South Africa is in principle capable of undergoing a major diversification from basic to more sophisticated products.
The DTi’s Industrial Policy Action Plan (IPAP) of 2016-2018 identified the following key opportunities:
· Automotive interior products such as carpets and dashboards;
· Automotive exterior products such as bumpers and mirror casings;
· Medical devices;
· Buildings: pipes, flooring, building sheet, sanitation and woven/netted polypropylene;
· Electrical and electronics cables, appliances and casing components; and
· Boatbuilding materials.
South Africa’s pharmaceutical market, the largest in Sub-Saharan Africa with a total estimated R39.79bn.
The DTi’s Industrial Policy Action Plan of 2016-2018 identified the following key opportunities:
· Potential for marked generic sector growth, in line with cost containment and the tiered-pricing structure for pharmacists.
· Rising demand for diabetes and other chronic disease management treatments.
· Huge market for HIV/AIDS drugs given disease’s epidemic levels.
The South African cosmetics sector is comprised of large and medium companies producing lotions, fragrances, cosmetics, soaps and detergents. Rapid urbanisation, increasing population and the fast-growing middle class are the driving forces behind increased demand for personal care products in Africa.
The dti identified the natural ingredient cosmetics sector as fast growing and opportunities in this area are being promoted.
Cdc Chemical Targets
Based on a demand analysis study on the South African chemical sector, the following opportunities have been determined for the Coega IDZ:
• Aluminium sulphate;
• PET polymer; and
To take advantage of chemical project development opportunities at Coega, please contact Mr Duane Mouton on: