Speech by the Deputy Minister of Trade and Industry,
Ms Elizabeth Thabethe, at the CIBJO World Jewellery Congress
Cape Town Convention Centre, 12 March 2007

 

“South Africa, Alive With Business Opportunities",

 

Her Excellency, The Honourable Deputy President of the Republic of South Africa, Ms. Phumzile Mlambo-Ngcuka, Mr. Mauro Agositi, Under Secretary of State, Ministry of International Trade of Italy; Dr. Gaetano Cavalieri President of CIBJO, the World Jewellery Confederation, Honourable guests from abroad Members of the global business community, Ladies and Gentlemen

 

Good morning everyone on behalf of the Department of Trade and Industry as one of the main sponsors of the conference, I wish to welcome you to our beautiful country. I believe this is the first time this event has been held in South Africa, of course as a country this is a welcome vote of confidence in our young democracy.

 

Honoured guests, my French accent will let me down badly if I attempt to say what the abbreviation CIBJO stands for (Confederation Internationale de La Bijouterie, Joaillerie, Orfevrerie, Perles et Pierres), so I will stick to the English version, calling it the World Jewellery Confederation, thereby not causing an international incident.

 

Congresses, like the CIBJO conference is very important to our economy, especially in terms of achieving our targeted growth rate of 6% and halving unemployment and poverty by 2014. As the lead department, tasked with making the targeted growth rate a reality, the Department of Trade and Industry has initiated programs to promote investment and export opportunities as well as negotiated trade benefits for the industry. How therefore can we as government contribute meaningfully to ‘delivering a responsible and sustainable global jewellery industry’, the theme of this conference.

 

As government we are proud of the talent of South African jewellers. When they listen to the heartbeat of our country, their designs are truly unique, as you will see when you visit the display area. We salute jewellery projects that promote economic and social development, especially amongst those of our communities denied the opportunities, like the exhibitors Vukani-Ubuntu, Kgabane, Imfundiso, and the Harmony Jewellery School.

 

For some of us, it may be hard to imagine growing up in a really poor neighbourhood, eventually designing precious metal jewellery that in some cases even win awards. This truly is a modern fairy tale come true! As we love saying, 'where else but in South Africa'.

 

2. GOVERNMENT'S INITIATIVES IN A NUTSHELL

I have been asked to highlight government's initiatives to stimulate growth in the jewellery industry.

 

Government sees training as crucial. For this reason, skills development is funded by government and training structures have been created in partnership with business to ensure high industry standards. Jewellery manufacturers based in South Africa can approach the Mining Qualifications Authority for financial assistance with in-house training programmes.

 

From a jewellery perspective, it is common knowledge that South Africa is one of the richest countries in the world in mineral reserves, producing approximately 25% of all raw materials for worldwide jewellery production. Although South Africa is an exporter of jewellery, we contribute less than half percent to the world's fabricated jewellery market. There is growing recognition that South Africa must develop

 

the means to transform its comparative advantage as a leading producer of precious metals and stones to become a globally competitive producer and marketer of jewellery. Current legislation aims to promote the beneficiation of precious metals and stones in South Africa, to achieve government's economic aspirations of growth, employment and equity.( I'm sure my colleague, the Minister of Minerals and Energy, will elaborate on this during the afternoon session).

 

2. DTI INITIATIVES

I have been requested to highlight what the South African Department of Trade and Industry does to promote the jewellery industry:

As mentioned, we act as co-sponsors of events like the CIBJO congress, to showcase South African jewellery, and to obtain the advice of experts.

We have funded research to help the industry grow.

We have assisted potential investors to link up with South African
jewelers, in co-operation with the Jewellery Council of South Africa.

We have helped jewelers to expand through grants that helped them acquire machinery, land and buildings.

We are proud to have been a co-sponsor of Vukani-Ubuntu as the first project in the country to start training disadvantaged students in jewellery manufacture and design. This is at no cost to the students. Some of their jewellery has even been exported.

 

The DTI has concluded a trade agreement with the European Union to gradually phase out import duties, with the idea of promoting market access into the EU. Asa result of the close relationship with the European Union, the EU is making available donor funding for well motivated projects aligned to the objectives of the Department of Trade and Industry.

 

The DTI also promotes the utilisation of the United States' Africa Growth and Opportunity Act (AGOA), which has been extended to 2015, which allows zero percent import duties on jewellery manufactured in SA.

We have various incentives to promote exports, investments and infrastructure development.

 

3. DTI INCENTIVES INCLUDE THE FOLLOWING:

3.1. INCENTIVES FOR POTENTIAL OVERSEAS BUYERS AND INVESTORS

 

1.The Group Inward Missions Incentive:

 

Should any of our esteemed delegates from overseas wish to visit the Jewellex International Trade Exhibition in Sandton from 14 — 17 July 2007, or consider investing in SA, you are welcome to contact the Jewellery Council of SA to obtain application forms for the Group Inward Missions Incentive. In essence, the dti pays for an economy class return airfare ticket, hotel accommodation of up to R1,200.00 a day and vehicle rentals.

 

INCENTIVES FOR INVESTORS AND SA MANUFACTURERS

 

The Small and Medium Enterprise Development Programme (SMEDP) and Foreign Investment Grant (FIG):

 

This is a financial grant for obtaining machinery, land or buildings, either to expand a current business, or to start a new one promoting small, medium and micro enterprises. It amounts to 10% of the amount if the business owner needs under R5 million, and 25% if more than that is required. It is linked to an incentive called the Foreign Investment Grant, which partially compensates investors for moving new machinery and equipment to new manufacturing businesses in South Africa. The limit is 15% of the moving costs, up to a maximum of R3 million per entity. These schemes are being revised at the moment, but will continue in essence, possibly with a few changes here and there.

 

Critical Infrastructure Fund (CIF):

 

The Critical Infrastructure Fund (CIF) is a cash grant incentive for projects that are designed to improve critical infrastructure in South Africa. The incentive covers up to 30% of the costs to develop qualifying infrastructure, namely transport systems leg roads), electricity transmission and distribution systems, telecommunication networks, sewage systems, waste storage, disposal and treatment systems and fuel supply systems.

 

Industrial Participation Programme (IPP):

 

All Government purchases and contracts with an imported content equal to or exceeding 10 million US dollar require a percentage of deals in return to benefit South Africa. These deals are called offset deals, and result in an inflow of foreign capital into South Africa. Overseas suppliers to the Government, especially multi-million rand projects, can be asked to invest money in jewellery related projects. There is evidence that some of these offset deals have indeed benefited the South African jewellery industry, and resulted in co-funding for Harmony's jewellery school in Virginia, Implats' platinum loan to Silplat and a super-alloy project run by AngloVaal Mining.

 

4 Incentives For South African Manufacturers

 

The DTI has various export incentives to help manufacturers based in SA to attend overseas trade shows and to visit potential overseas buyers/investors.

 

5. Sector-Specific Assistance Scheme (SSAS)

 

Industry associations like the Jewellery Council of SA can apply for funding from the Sector-Specific Assistance Scheme for projects that will develop the industry as a whole. Projects need to:

• Promote exports;
• Promote the participation of small and medium enterprises, previously disadvantaged individuals and women in exports.
• Propose solutions to factors inhibiting export growth.

 

5. The Gold Loan Scheme

The Gold Loan Scheme needs to be mentioned as an incentive where Government has played a supporting role to help facilitate it. AngloGold Ashanti, Gold Fields Limited, BAE Systems and Standard Bank have established a gold loan scheme for the SA jewellery manufacturing sector.

 

The purpose of the scheme is to lower the cost to SA jewellery manufacturers of financing gold, and to enable local manufacturers to become more competitive compared to their international counterparts.

 

6. The Industrial Development Zone To Be Established At The Oliver Tambo International Airport, Which Will Be Linked To A Jewellery Manufacturing Cluster

 

The private sector is co-operating with government to establish an Industrial Development Zone at the Oliver Tambo International Airport. The advantages of such a Development Zone are:

 

• A Customs Controlled Area in a high security zone located close to the main passenger terminals.
• There would be duty rebates and VAT exemption on the importing of raw materials, machinery and assets, if it is to be used in production with the aim of exporting the finished products.
• There would also be an exhibition area close to the passenger terminals to showcase jewellery and other South African products. This renders easy access to the large tourist market.

 

The idea is that such a Development Zone would include or would be linked to a cluster of jewellery manufacturing and training enterprises. This cluster Gould be based in the airport area, or in the adjacent African Gold Zone. The cluster would be launched by Mintek, the Jewellery Council of SA and the private sector, but Government would play a supportive role.

 

The African Gold Zone is based on 3.3 hectares of land donated by Rand Refinery. The aim is to create a cost-competitive gold jewellery manufacturing zone with direct access to gold in a secure environment. Rand Refinery has a secure terminal at Oliver Tambo International Airport. This could become the vehicle through which the Gold Zone could be linked to the above-mentioned Industrial Development Zone and its associated incentives.

 

We will hopefully be able to announce at the next CIBJO conference that this Industrial Development Zone has been finalised, and that it is ready for occupation.

 

7. Conclusion

To conclude, I want to go back to the discovery of the first commercially used diamond in South Africa by a fifteen year old boy, called Erasmus Jacobs on his father's farm in 1866/7 in a small rural town called, Hopetown in the Northern Cape. I'm sure Erasmus would be amazed at the transformation his find brought to the whole of South Africa! Combined with the discovery of the gold fields, it helped to change our country from an agriculturally driven community to a more diversified manufacturing nation. These discoveries brought prosperity, but unfortunately also exploitation. Since the birth of our democracy in 1994, the Government has gone to great lengths to protect the interests of the workers in all spheres of the economy.

 

May this congress guide us to improve initiatives to help grow the jewellery industry. May this congress be hailed by future generations as a milestone in the promotion of the jewellery industry in Africa.

 

There is an African proverb that says, 'Return to old watering holes for more than water; friends and dreams are there to meet you'. May all of us meet again at the next CIBJO watering hole, to celebrate dreams that have become realities.