Financial Data
Updated 21 May 2019


Building business networks across SA’s manufacturing industry

Standard Bank recently introduced a cross-section of local business leaders to each other in East London. The aim? To enable them to grow their entrepreneurial networks – and remain competitive.


24 May 2018  Share  0 comments  Print


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What do Bremen in northern Germany, Tuscaloosa in the USA and Beijing in China have in common with East London? All four locations are home to Mercedes-Benz production facilities, specialising in building thousands and thousands of C-Class vehicles for global supply.

The Eastern Cape factory served as the ideal setting for Standard Bank to host our Manufacturing Network Experience 2018, which included tile manufacturers, pharmaceutical producers, chemical craftsmen and tool makers. Business banking customers in the sector were given a ‘by-invitation-only’ opportunity to network with fellow manufacturing business owners and extend business links.

“We recognise that no one knows your business better than you do, but we also understand the value of making the right connections. This is one of the key reasons why we host these networking events. We want to play our part in helping you grow your business relationship network.” – Shane Naicker, Head: Standard Bank Business Banking

Auto manufacturing sector insights shared

Standard Bank economist André Snyders discussed the economic climate of the automotive manufacturing sector with attendees. “The local automotive production industry is experiencing both highs and lows,” Snyders explained.

Related: Grow your company with the 7 Strata of Strategy

Last year, General Motors closed its manufacturing operations in the Eastern Cape in line with a global move to reduce costs. Isuzu Motors Japan stepped in, taking over the General Motors manufacturing facility, and the company will now  be building trucks in the Eastern Cape.

“Manufacturers are still investing in South Africa,” Snyders said. “BMW’s invested billions in Rosslyn, Mercedes-Benz has recently invested millions here in the Eastern Cape. “But, we need to build our manufacturing base up further if we are to remain competitive in the global economy.”

In the 1990s and early 2000s, South Africa’s manufacturing sector contributed more than 20% of the country’s GDP. However, that figure has dropped to around 13%. Snyders explained that food engineering businesses are leading the way in the country, but a broader base of manufacturing operations is needed for the sector to grow.

How does the manufacturing sector meet these challenges and continue to grow? According to Flux Trends analyst, Bronwyn Williams, business owners can remain competitive through the current trend of cross-industry collaboration and pivots.

According to Williams, these two key trends will become the norm as businesses that used to sell products look to sell additional services that come with the goods. “Ambidextrous leadership and hybrid employee skillsets are essential for companies to consider – to be able to compete in this dynamic market,” she explained.

How Mercedes-Benz East London pivoted and collaborated

Mercedes -Benz

The factory, which delivers award-winning cars, is vastly different from initial operations that began in 1948. Back then, it was known as Car Distributors Assembly Limited, building vehicles for Auto Union (Audi), Honda and other brands. In 1958 Mercedes-Benz products went into production.

Over the years, Mercedes-Benz increased its shareholding in the East London facility, and today, strategically builds Mercedes-Benz and FUSO products only. This shift from manufacturing for a variety of brands to two, enabled the company to hone how it collaborates with employees, and parts and technology providers.

Divisional Manager for Commercial vehicles, Gladstone Mtyoko shared some insights with delegates on how Mercedes-Benz thinks about collaboration and its business model:

Incorporating robots and co-bots into the workforce

Robots and co-bots play a key role in the Mercedes-Benz plant and the replacement of humans with machines has been challenging for the company to navigate. Robots bring the efficiencies and precision required to build high-end luxury cars (at speed), and the company could easily replace more people with more machines. But, this isn’t the Mercedes-Benz approach, however.

Collaboration to improve employees’ skills

Through the Siyaphambili Agreement, Mercedes-Benz ensures people take priority when it comes to employment. And, in collaboration with its factory’s technology providers, the company has built a state-of the-art technical training facility on-site where people are not only trained to work on the production line, and also to repair the technology behind the machines used to build products.

Related: How manufacturers can respond in an evolving sector

“We want to be in a position where our employees have the hands-on skills and the technology skills needed to work in a modern car plant,” Mtyoko explained. Standard Bank customers were impressed by the efforts Mercedes-Benz makes to collaborate with technology providers to upskill staff.

Shifting your business model through collaboration

By introducing local manufacturing business leaders to each other and exposing them to the rigorous nature of running a world-class car plant, Standard Bank aims to help more local companies collaborate and evolve their businesses.

“As a key participant in the manufacturing sector from a banking and financial services perspective, we know just how tough it is for businesses, Shane Naicker, Head: Business Banking, said. “We want you to know that we’re ready to talk to you about your business and what you need.”


CONSIDER THIS

Through networking events and the ability to put businesses in touch with one another, Standard Bank can help you collaborate with other companies. Talk to one of our relationship managers about moving your business forward with us today.

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