By Yeshen Pillay, CEO, CHIETA
Just like the people of South Africa, the chemicals industry has been shaped by the challenges of our past and strives for continued growth and prosperity. Heritage Month – a time where we celebrate our cultural diversity and history – strikes me as a suitable time to reflect on the history of our country’s chemicals sector. Understanding this past is key to understanding the industry as it stands today, and how we can foster its growth into the future.
Our chemicals sector dates back to the late 19th century, with the discovery of coal near Vereeniging in 1878. Arguably, this can be seen as SA’s industrial revolution as it changed our way of life and work forever. The sector stemmed from a thriving minerals industry and, in fact, its inception was a response to a need for explosives for mining companies. Explosives were the core output of the chemicals industry for the first forty years!
In the 1950s, the first coal-to-liquids plant was built in Sasolburg, with the second coming to Secunda in the 1980s. This can be thought of as the heyday of the local chemicals industry, which became a prominent employer and economic stimulant. However, while the local chemical industries seemed to be thriving, it was largely because of international sanctions during Apartheid. Without international imports, SA’s chemicals industry had to be self-reliant. Our chemicals sector was far from being internationally competitive, so when sanctions were lifted during the dawn of the democratic era, the industry faced a dire need to innovate.
Understanding the industry today
Today, the chemicals sector remains a crucial facet of the South African economy with a 12 times multiplier effect for job creation and about a 5,5 times multiplier on GDP. However, the sector faces several challenges as well as further hurdles presented by the Covid-19 pandemic. Firstly, the oil price crash in March 2020 has hindered the sector’s competitiveness. Secondly, consumer concern about carbon emissions has impacted on end-markets for chemicals. The chemicals sector is largely an upstream sector, and its success depends on the downstream sectors performing well and growing. Thirdly, since the chemicals sectors are scientific in nature, South Africa’s poor education outcomes are a hindrance to sector growth as there is an ever-widening skills gap.
The need for innovation which was recognised in 1994 is ongoing. The chemicals sector must equip itself to navigate today’s challenges, and the first course of action must be education. With investor confidence at a low, skills development is crucial to foster a world class and competitive industry. The industry is suffering, largely due to a shortage of chemical engineers, mechanical engineers, and data scientists.
Moving the industry forward
The Chemical Industries Education and Training Authority (CHIETA) has seen great achievements this year in meeting our mandate, which aims to fill the skills gap. We were able to award R235 million worth of discretionary funding that is expected to benefit more than 10 000 learners. By investing in our learners now, we are helping foster skills which are desperately needed in the various sectors we serve. At the same time, these young people are provided with the tools they need to have successful careers!
CHIETA has also issued more than 775 certificates and approved 14 workplaces which means there are more people and companies equipped to contribute to industry growth. Further, five discretionary grants were awarded for qualification design and two for research reports. This is sure to foster innovation in the industry which we so urgently need.
While we look back on the history of South Africa’s chemicals sectors, we must continue to build this sector into the future. Education and skills development are the path to a vibrant and sustainable industry.