Chemical industry in South Africa

The Department of Trade and Industry’s (dti) chemicals sector development strategy provides chemical companies with an opportunity to spread their risks and move closer to certain markets. South Africa manufactures 300 types of basic or pure chemicals.

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%).

Pharmaceuticals

Pharmaceuticals are one of the key chemical industries in the Eastern Cape. Nelson Mandela Bay is home to Aspen Pharmaceuticals, the largest generics manufacturer in the southern hemisphere and the leading supplier of generic medicines to both the private and the public sectors in South Africa. Aspen is one of the top twenty generic manufacturers worldwide and South Africa’s number one generic brand.

The dti’s industrial policy action plan of February 2011 identified the following key opportunities:

• Domestic production of active pharmaceutical ingredients for key ARVs;
• Local production of reagents for AIDS/HIV diagnostics, under licence;
• Domestic production of vaccines under licence;
• Domestic production of biological medicines such as erythmpoietin, monoclonal antibodies and vaccines; and
• Removing regulatory barriers and constraints to clinical research in South Africa (current market R2 billion per year). Potential market size is R4 billion to R5 billion per year.

Plastic conversion

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 (excluding textiles), rotomoulding and forming. The major products include: flexible packaging, rigid packaging, cables, footwear, pipes, films, flooring, and white goods/electrical, automotive, and electronic components. The plastics industry is highly diversified throughout the province, and includes automotive, packaging, moulding and extrusion, household and construction.

The dti’s industrial policy action plan of February 2011 identified the following key opportunities:

• Automotive (interiors: products such as carpets and dashboards, and exteriors:products such as bumpers and mirror casings);
• Packaging;
• Medical (drips and syringes);
• Building (pipes, flooring, building sheet, sanitation, woven/netted Polypropylene PP
• bags); and
• Electrical and electronics (cables, appliances and casing components).

CDC Chemical Targets

Based on a demand analysis study on the South African chemical sector, the following sectors have been determined for the Coega IDZ:

• Crude oil refinery and downstream petrochemical products (a downstream petrochemical cluster would have a number of advantages including low logistics costs, lower input material costs and other opportunities for synergy);
• Chlor-alkali and downstream related products;
• Styrene butadiene rubber;
• Terephthalic acid;
• Non packaging plastics;
• Biodiesel; and
• Silicon carbide (using petroleum coke from refineries).

To take advantage of chemical manufacturing opportunities at Coega, please contact Mr Duane Mouton on:

E-mail: duane.mouton@coega.co.za

Telephone: +27 41 (403) 0505