Report Coverage
This report focuses on the manufacture of batteries and includes comprehensive information on the state of the sector including primary, automotive, energy storage, industrial and lithium-ion batteries, electric vehicles, technology, recycling and other environmental factors. There are profiles of nine companies including Eveready, the only primary battery manufacturer in South Africa and other major brands such as Energizer and Duracell. Other companies profiled include AutoX, involved in the automotive battery replacement market, and First National Battery (under Metindustrial), a major player in the original equipment manufacturer sector, and a supplier of industrial batteries.
Introduction
This report focuses on the manufacture of batteries, an industry which is expected to experience significant demand for lithium-ion batteries following the recent announcements by a number of countries to ban internal combustion engine (ICE) vehicles and promote electric vehicles (EVs) in the coming decade. While South Africa has no lithium-ion battery cell manufacturers, several companies are involved in battery pack assembly. Demand for all types of batteries is also expected to come from the rollout of renewable energy projects, as industry looks for cleaner, affordable and more reliable energy options to Eskom, as the country’s intermittent power outages continue. Indicative of this is that the value of lithium-ion batteries imports grew by 115.4% between 2019 and 2020, from R1.3bn to R2.8bn. President Cyril Ramaphosa announced in June 2021 that the Electricity Regulation Act would be amended to increase the National Energy Regulator of South Africa (Nersa) licensing threshold for embedded generation projects from 1MW to 100MW. The amendment is expected to propel new power projects, including renewable energy projects which require battery storage. While production by local manufacturers was initially affected when the pandemic began, it has since begun to recover. The battery sector is driven by research and development and a number of initiatives are underway to improve technologies. One opportunity is the recycling and reuse of batteries, as under the Waste Act, disposal of any type of battery will be banned from landfills from 23 August 2021.
Strengths
• A large portion of components come from recycled material or locally-manufactured components.
• A successful recycling programme in the lead-acid market.
• A vibrant battery pack assembling market.
• Dedicated and proven products for the industrial, vehicle and household consumer markets.
• Southern Africa has key battery minerals and significant manganese reserves. High levels of R&D globally and locally.
• Strong distribution networks focused on the FMCG market.
Weaknesses
• Skills shortages, particularly in the lithium-ion value chain.
• Small market size makes it difficult to make electric vehicle manufacturing for the domestic market viable.
• The lead acid market is primarily dependent on the automotive industry which is adversely affected by the economic climate.
• Virtually no viable lithium-ion deposits.
Opportunities
• Electrification of buses and minibus taxis, as well as supplying EVs to fleet owners.
• Growing energy storage opportunities with electricity utilities and independent power purchase opportunities from growing renewable energy deployments.
• Growing export markets through the Automotive Production and Development Programme.
• Increasing infrastructure spend in Africa and other fast-growing emerging markets may increase demand for energy storage equipment.
• Rapidly declining KWh battery costs due to increasing gigafactories and production efficiency improvements.
Threats
• Currency volatility.
• Declining margins in an increasingly competitive volumes driven industry.
• Increasing demand for key battery metals may result in price increases
• Increasing labour costs.
• The battery recycling sector notes increased volumes of battery waste required for electric vehicle battery production could result in shortages of active and raw materials.
• The increasing cost of staying at the forefront of rapid battery technological advancement.
• The risk of July 2021’s unrest leading to a long-term decline in investment in South Africa, which could impact negatively on the sector.
Outlook
Battery demand in South Africa is being driven mainly by industry’s and homeowners’ need for more reliable and affordable energy storage, amid continuing power cuts by Eskom, and the construction of new wind and solar projects. The June 2021 announcement that the National Energy Regulator of South Africa licensing threshold for embedded generation projects would be raised from 1MW to 100MW will likely result in more renewable energy projects coming on line, which will benefit the battery storage segment. In addition, the 12,000MW Renewable Energy Independent Power Purchase Programme is expected to roll out between June 2022 and 2030 and includes allowances to purchase 513MW of energy storage and a further 6,800MW of solar and wind. The automotive battery segment will see a steady recovery, with Naamsa expecting new domestic vehicle sales to grow 15% in 2021 and for exports to increase by 20%. A full recovery in exports to pre-pandemic levels is only expected in the next two to five years. It is not clear at present how unrest in July 2021 will affect vehicle sales, but most analysts expect it to lead to a decline in investment in the short-term. Lithium-ion sales will likely outpace those for lead-acid batteries, with strong demand for energy storage solutions, which are increasingly being powered by lithium-ion batteries, expected to continue given ongoing load shedding in South Africa. South Africa is also investigating how it can take part in the lithium-ion battery value chain and several projects in mineral beneficiation and manufacturing of components are expected to come online in coming years.
Full Report
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Industry Landscape
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Historical Reports
The Manufacture and Supply of Batteries Industry in South Africa 2019-09-12
R 1 900.00(ZAR) estimated $108.48 (USD)*
View Report Add to CartThe Manufacture and Supply of Batteries Industry in South africa 2017-07-31
R 1 900.00(ZAR) estimated $108.48 (USD)*
View Report Add to CartThe Manufacture and Supply of Batteries Industry in South Africa 2015-10-29
R 1 900.00(ZAR) estimated $108.48 (USD)*
View Report Add to CartTable of Contents
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1. | INTRODUCTION | 1 |
2. | DESCRIPTION OF THE INDUSTRY | 1 |
2.1. | Industry Value Chain | 2 |
2.2. | Geographic Position | 7 |
3. | SIZE OF THE INDUSTRY | 9 |
4. | STATE OF THE INDUSTRY | 16 |
4.1. | Local | 16 |
4.1.1. | Trade | 34 |
4.1.2. | Corporate Actions | 38 |
4.1.3. | Regulations | 39 |
4.1.4. | Enterprise Development and Social Economic Development | 41 |
4.2. | Continental | 42 |
4.3. | International | 46 |
5. | INFLUENCING FACTORS | 57 |
5.1. | Coronavirus | 57 |
5.2. | Economic Environment | 57 |
5.3. | Government Initiatives | 59 |
5.4. | Supply and Demand Impacts | 61 |
5.5. | Rising Operating Costs | 63 |
5.6. | Technology, Research and Development (R&D) and Innovation | 65 |
5.7. | Labour | 73 |
5.8. | Cyclicality | 74 |
5.9. | Environmental | 75 |
6. | COMPETITION | 79 |
6.1. | Barriers to Entry | 80 |
7. | SWOT ANALYSIS | 80 |
8. | OUTLOOK | 81 |
9. | INDUSTRY ASSOCIATIONS | 82 |
10. | REFERENCES | 82 |
10.1. | Publications | 82 |
10.2. | Websites | 83 |
APPENDIX 1 | 85 | |
Summary of Notable players | 85 | |
COMPANY PROFILES | 87 | |
AUTOX (PTY) LTD | 87 | |
DONAVENTA HOLDINGS (PTY) LTD | 89 | |
DURACELL SOUTH AFRICA (PTY) LTD | 91 | |
ENERGIZER (SOUTH AFRICA) LTD | 92 | |
EVEREADY (PTY) LTD | 94 | |
METINDUSTRIAL (PTY) LTD | 97 | |
POTENSA (PTY) LTD | 100 | |
PROBE CORPORATION (SOUTH AFRICA) (PTY) LTD | 102 | |
SOLGUARD (PTY) LTD | 104 |