South Africa's automation market is seeing activity in more than just mining these days, with the inflow of foreign direct investment prompting growth in several sectors, according to the ARC Advisory Group. After a flat 2011, the local automation market is back on the growth track, and ARC predicts that market volume will exceed $1 billion by 2016.
A significant amount of the investments are coming from China, analysts said. Manufacturing is picking up, and the food and beverage and automotive industries are exporting more. South Africa is benefiting from developments in neighboring countries such as Botswana, Namibia and Mozambique, but also exports its products to manufacturing industries worldwide.
South Africa is still highly affected by racial inequalities, however, and ARC sees the social tension, poverty and diminished consumer spending as an inhibitor to industry growth. Also, the lack of engineers and skilled workers is a threat to growth, but local and global companies in South Africa have established a number of strategies to overcome this problem, the report said.
The largest automation market in South Africa is mining, but exports of chemicals, metal products, machinery, transportation equipment, and manufactured goods have also increased in recent years.
ARC advises companies to evaluate investments in South Africa carefully, but the group is convinced that there is great potential. ARC recommends settling in the Johannesburg/Pretoria region, and focusing on easy-to-use automation with plenty of services.