By Nigerian journalist Odinaka Anudu. First published in Business Day (Nigeria) on 4 December 2017.
At a Pretoria-bound train in Rosebank, north of central Johannesburg, economic capital of South Africa on November 12, a middle-aged man and a woman were haggling over the cost of repairing some set of electronic gadgets.
“You know I am going to take the television and the phones from your home to my shop,” said the man.
“I know, but the best I can do is R300. No more, no less,” the woman replied.
“Ok, let’s cut it short. Just make it R400. I will give you the best service and you won’t come back looking for someone to repair them in another year,” said the man.
The conversation caught my attention as I was interested in knowing how South Africa works, having come from Nigeria, a country competing with Nelson Mandela’s country.
I sat and watched as they concluded their negotiation, which ended up with the man agreeing to accept R350.
The middle-aged man sat close to me on the train and as we got to the Centurion Station, I decided to engage him in a discussion.
“Are you an electrician?” I asked.
“Yes, I am an engineer. I repair electrical and electronics faults,” replied the man, who introduced himself as Emmanuel.
Emmanuel told me that there was no kind of electronics fault he couldn’t correct or repair.
As we conversed, I later learnt that he spent three years working at Hisense, a Chinese appliance and electronics maker, which entered South Africa in 1996.
“I learnt a few things there and I have my own shop now,” he told me.
“I am no more working there but I know electronics inside and out,” he said.
Chinese manufacturers in South Africa are creating jobs for South Africans and transferring vital skills.
With the support of the Africa-China Reporting Project at the University of Witwatersrand, Johannesburg, I undertook an investigation into Chinese manufacturing companies in South Africa to understand how they transferred skills and created jobs.
The investigation was informed by my findings in Nigeria which showed that some Chinese and Indian manufacturing firms were restricting local workers from key production departments. I wanted to find out if that was the case in South Africa.
I investigated four Chinese-owned manufacturing companies in South Africa – New Hope, located at Klipriver Business Park; First Automotive Works (FAW), situated at Coega Development Corporation (CDC), Eastern Cape; Harvest Group at Babelegi Industrial Park, Western Cape and Hammanskraal, and Hisense at Atlantis.
All together, the four firms employ 1,119 workers, out of which 1,053 are South Africans and only 66 Chinese.
FAW has 149 workers, out of which 142 are South African and seven Chinese. The car maker has four departments: production, administration, quality and technical, and maintenance.
The production department consists of five sub-departments: adjustment line, assembly, body shop, warehouse, and paint shop. The total number of employees within the production department is 108, out of which two are managers – a South African and a Chinese.
The administration department has four sub-departments: general administration, human resources, finance, and health and safety. In total, these departments have 21 employees – 17 South Africans and four Chinese.
I found that South African employees are in the human resources, finance, and health and safety positions, as these require advanced knowledge of South African legislation, standards and best practices.
The quality and technical department consists of 15 employees, led by a Chinese.
Also, the maintenance department comprises five South Africans, and one Chinese who heads it.
Four South Africans are at the management level, and are part of the leadership of health and safety, finance, human resources and production departments.
My findings showed that there is no South African manager in the quality and the maintenance departments.
I found that South Africans working in FAW understand car-making process but struggle when it comes to issues around standards.
However, Ayanda Vilakazi, head of marketing and communication at Coega Development Corporation, told me that South Africans had over 60 years of experience in manufacturing and vehicle assembly and could make their own cars.
But FAW understood that it wouldn’t just be easy for South Africans to make cars owing to skills gap.
“There may be skills shortages in specialised departments, but we are committed to continuous improvement and transfer of skills processes to ensure that both South African and Chinese employees learn from each other,” Cheng Zhang, FAW’s general manager in charge of sales and marketing, told me.
Zhang said the techniques and processes South Africans used in applying their skills to their work functions were different when compared with their Chinese counterparts. He also said that communication gap sometimes posed a barrier to skills shortages.
New Hope was my next port of call. It is the second biggest privately-owned animal feeds manufacturer in South Africa and has established eight retail depots in Guateng, Kwazulu-Natal, the Free State, Limpopo and North-West. It has seven departments such as technical, marketing, production, and HR, among others.
It employs 70 workers, nine of whom are Chinese.
Angelique Gu, company representative, told me that there was lack of technical skills among the South Africans.
She said this was why the company ran internship programmes for workers and gave them increases according to their performances.
I found that like in FAW, the Chinese are also managers here, even though South Africans work in all departments.
The firm believes that South Africans are lazy, citing frequent excuses given by workers to buttress its position.
“They want six months maternity leave, funeral funds and can walk away without excuses,” Gu said.
I observed that South African workers did not trust the Chinese. They believed that the Chinese wanted them to work 20 hours in a day, including weekends, which was contrary to African work ethics.
“We used to support them with loans for studies, but we discovered that some of them would not go for such studies but would rather use the money to do other things. When we discovered that, we stopped the programme,” Gu said.
New Hope complained that the 2 Euro per day minimum wage in South Africa was too high.
“Labour is becoming expensive in South Africa and workers are prone to strike,” she said.
“Visa extension is getting more difficult. Sometimes our managers do not get visas and we send them to other countries,” the company representative added.
Harvest Group was next. A manufacturer of knitted vegetable bags, woven vegetable bags, mono vegetable bags and circular polypropylene bags, the group has been in manufacturing operation for 10 years.
The company employs 400 workers, 20 of whom are Chinese. Many of these Chinese work on the machines, whose language of operation is Chinese.
Machines are imported from China and the welding is done by the people Deon Van Wyk, marketing director, described as ‘the effective Chinese’.
Van Wyk said South Africans are in all the departments such as yarn, weaving, bags and printing but does not believe they could produce the packaging materials themselves if left alone ‘because of history’.
Van Wyk said the company was always on training programmes with workers updating their skills and knowledge. However, he pointed out that “they work for us for one year, two years and all of a sudden the opposition purchases them and they go away. Last year, we had a major unpredicted strike.”
Like Gu, Van Wyk said there was lack of knowledge among South Africans, saying that government backed workers than investors.
“One union instigated that they should go on strike last year. We gave them four- time opportunity to come back but they didn’t. So we had to retrench them, but we were asked to re-employ them,” he said.
One major thing I found was the need to upgrade technical education in South Africa to make local workers employable.
“The biggest problem is the minimum wage, the Employment Equity Act. It is against manufacturers. It is not worthwhile manufacturing in South Africa anymore,” he concluded.
Hisense is located at Atlantis, an area battered by poverty and is known for unemployment, drugs and hooliganism. The company employs 500 workers directly and 3,000 indirectly.
Workers left the factory with capacity to repair electronics.
An official of the company told this writer that televisions and fridges were manufactured locally. The official said others such as smart phones and washing machines were made in China and imported into South Africa due to skills-related issues.
Lessons for Nigeria
I found that there was near absence of power interruptions in South African factories, meaning that a Cadbury product in the country would be much cheaper than the same product in Nigeria, where five-hour power supply in a day is rare. Apart from strong labour laws in South Africa, which do not exist in Nigeria, South African manufacturers have access to efficient train and good network, which facilitate movement of products from factory to market.
The author was a participant in the Project’s Africa-China Reporting Workshop 2017.
This work was produced as a result of a grant provided by the Africa-China Reporting Project managed by the Journalism Department of the University of the Witwatersrand.
Featured image: Wall Street Journal.