Chapter 4 : Secondary and Tertiary Sectors

SA's manufacturing status in Africa

SA is by far the leading manufacturing country in Africa (goods produced, exported, and share of labour force in industry) and has the continent's most advanced service sector.

Three categories of the secondary sector

Manufacturing (converting raw materials into goods), construction, and utilities (supply of water, electricity and gas).

Mass production

The making of large quantities of identical articles by standardised mechanised processes, often along an assembly line where each worker does one specialised job.

Why is manufacturing important?

It turns raw materials into usable goods, the human skills used increase the value of the raw materials, and it employs more people than any other formal economic activity.

Why has some manufacturing declined?

Many factories (especially clothing) have closed because SA can import cheaper goods produced with lower-cost labour elsewhere.

Why has the tertiary sector grown the most?

A more mature economy; expanded government employment (four to nine provinces after 1995); rising education levels; the data also include the quaternary sector; and it is partly relative to decline in the primary and secondary sectors.

Heavy industry

Industry that processes large masses of basic materials (e.g. steel ingots, bulk chemicals) or makes large products (shipbuilding, bridges, petrochemicals). Needs large areas, emits much waste, usually located on the urban periphery.

Light industry

Industry where workers handle small amounts of material to make small-bulk articles (clothes, hand tools, TVs, packaged food). Produces little pollution, usually located in industrial areas within the city.

Raw-material-oriented industry

Industry located near its main raw material to cut transport costs or avoid deterioration, e.g. sugar refineries, fruit canning and iron/steel plants near coal or ore.

Market-oriented industry

Industry located close to its buyers, e.g. bakeries (fresh products), weight-gaining assembly (furniture), or products expensive to transport (big machines).

Footloose industry

Industry not tied to any specific location (e.g. steel gate makers, upholstery). Made possible in SA by electrical power being available everywhere.

Ubiquitous industry

Industries found in almost every town, e.g. small bakeries, metalwork, carpentry, dressmakers, butcheries and food processors.

Bridge industry

Industry set up at a break-of-bulk point where cargo is transferred between transport modes (e.g. car assembly and soap-making at ports like Port Elizabeth and Durban).

Break-of-bulk point

A point where cargo is unloaded from a bulk carrier (like a ship) to be reloaded into smaller units of transport (like trains or trucks).

Industrial inertia

The tendency for industries to stay in one area even after the original reasons for locating there have gone (e.g. Cape Town's retained skills).

Factors influencing industrial location

Raw materials, energy, labour supply, markets, link industries, transport infrastructure, water, capital, land, government assistance, trade and competition.

SA's four main manufacturing regions

The PWV (Gauteng), eThekwini (Durban-Pinetown), the southwestern Cape, and the Nelson Mandela Metro (Port Elizabeth-Uitenhage).

PWV region - importance

The Pretoria-Witwatersrand-Vaal complex (Gauteng); ~11 million people live there and it produces about 45% of SA's manufactured goods and 41% of GDP - the largest industrial complex in Africa.

PWV - location factors

Gold, in-migrating people, nearby coal for energy, a large mining/urban market, abundant labour, Vaal River water, nearby raw materials, good transport on flat highveld, and available capital.

PWV - main industries

Chemicals/petrochemicals (Sasolburg, Secunda), iron and steel, metal products, food and beverages, and motor vehicle assembly (BMW, Ford, Nissan).

eThekwini (Durban-Pinetown) region

Produces about 13% of SA's manufactured goods. Grew around a natural harbour (Bay of Natal); Durban is SA's main import/export gateway and busiest general-cargo port.

eThekwini - location factors

A port situation (bridge industries using imported materials), large labour supply (KZN has 20% of population), local resources (sugar, timber, fruit), plentiful water, nearby coal energy, and flat coastal land.

eThekwini - main industries

Food processing, sugar refining, motor manufacturing (Toyota), oil refining (SAPREF - SA's biggest), rayon, chemicals (AECI) and light industries (Durban leads in shoes).

Southwestern Cape region

Core is Greater Cape Town; has 6,4% of SA's people but produces ~11,5% of manufactured goods (15% with wine towns). Highest growth rate and lowest unemployment in the country.

Southwestern Cape - factors

Historical head start (oldest city, colonial government); skilled labour and industrial inertia; agricultural raw materials (fruit, wine, wheat); limited but adequate water; but far from coal so higher energy cost limits heavy industry.

Southwestern Cape - main industries

Labour-intensive light industry: clothing and footwear, food processing, fish canning/packing, hi-tech manufacturing, link industries (printing/packaging) and petroleum refining (Milnerton).

Nelson Mandela Metro (PE-Uitenhage) region

SA's 4th-largest manufacturing region (~5% of national output); one of the most intensive motor-vehicle clusters in the world (GM, Volkswagen + 150+ component suppliers). 80%+ of Eastern Cape exports are manufactured items.

Nelson Mandela Metro - factors favouring

Central port location for exports, adequate water (Orange River Project), modern port facilities (including deep-water Ngqura at Coega), equalised rail tariffs (1996), lower labour costs, and the Coega IDZ.

Nelson Mandela Metro - obstructing factors

Now seen as far from the main consumer markets; labour costs still higher than Asia/Eastern Europe; and strikes damaging its image as a reliable supplier.