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Contribution to the Economy
Although the furniture manufacturing sector has the potential to create many employment opportunities, currently it only contributes approximately 1.6% to overall employment in South Africa’s manufacturing sector. Department of Trade & Industry (DTI) statistics show there are 2,200 registered business entities that employ approximately 29,000 people.
A lack of Competitiveness
A lack of competitiveness in the manufacturing sector has resulted in South Africa being a net importer of furniture, with 2014 imports amounting to R8.3bn compared to exports valued at R5.7bn. Most imports originate from China and although the current weakness of the Rand should be an advantage for the local manufacturing sector, imports from China and other Asian countries are still cheaper. Local manufacturers attribute this to support in the form of subsidies from the Chinese government and much lower input costs.
The furniture manufacturing industry is one of the main focus areas in the Government’s Industrial Policy Action Plan (IPAP) 2014/2015 – 2016/2017 which is supported on a regional basis. The Gauteng Growth and Development Agency (GDDA) has already implemented a three year plan for the establishment of small BBBEE furniture companies and the Western Cape Furniture Initiative actively promotes opportunities for furniture manufacturers in that province. The 2015 National Furniture Design Competition, an initiative of government and private enterprises, should eventually result in new product development and product differentiation that will enhance the furniture manufacturing sector’s competitiveness locally and abroad.
The Manufacture of Furniture in South Africa evaluates the domestic industry, government attempts to stimulate local manufacture and factors influencing the sector’s success. The report also profiles 25 industry players, ranging from KAP Industrial Holdings Ltd with 16 factories and 18,900 employees to small enterprise Streamline Metal Furniture Manufacturers which employs 20 people at its factory in Gauteng.