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Why we should support local manufacturing

by | Jun 5, 2020

Guest editor Mari-Louise Candiotes looks at the pros and pros of supporting local brands.

Shop small, support local. These are the current buzzwords appearing all over social media. But why is local manufacturing important to our country and its citizens? Why should we support local? Aren’t there enough international brands producing exactly what we want and at a price we can afford?

The majority of South Africans would actually like to support local if they could, but there are many reasons why they don’t (or perhaps I should say cannot) support local manufacturers.

Some of these include:

  • Locally manufactured products are too expensive.
  • There are no locally produced options for the product that I am looking for.
  • The product quality and service level of local brands are sub-standard.
  • Locally produced products aren’t readily available.

 

All of the above may seem like fair excuses, but what if I told you that in fact, you are the reason for these shortcomings?

Throughout the ages, drought has been one of the most devastating and invasive disasters for all living things. Water is our most important survival resource. How does drought happen though?

Picture yourself sitting next to a beautiful lake on a lovely summer’s day. You look out over the water and all you see is paradise. However, hidden from view is the natural evaporation of water. Little by little, water evaporates up into the air. This process continues every minute of every day, non-stop, but because it’s so slow no-one notices any changes.

Now imagine that no rain falls into that lake for two years … Disaster! Drought, in essence, occurs when there is less rain, than evaporation for an extended period of time.

Now, back to local manufacturing. When goods are imported, money leaves the country to pay for those goods (evaporation). Money flows back into the country when goods are exported (rainfall).

The difference between exports and imports is referred to as the trade balance. It is negative if imports exceed exports (more evaporation than rainfall). Just as a prolonged period of water evaporation without any rain causes a drought, so a prolonged period of negative trade balance creates an economic disaster (no money left).

The most severe impact is seen in local employment. Jobs become less and less available as more goods are imported. An ever-weakening local currency comes next, due to the principle of supply and demand.

Demand for a currency increases when you sell in that currency. Exports represent sales for a currency. Thus the less you export the less demand there is for that currency. Lastly, local products become more expensive as demand for the locally produced good decreases.

Local manufacturing is one of the best ways we can keep our money in our country, provided the manufacturer spends the money it receives on local resources.

The natural evolution of a well-supported manufacturer is that they are able to increase their volumes and thereby create efficiencies through improved processes, setting up assembly lines and reducing material costs when buying in bulk. All these benefits filter back into the pockets of their customers, who pay less for products as efficiencies improve.

The natural evolution of a well-supported manufacturer, is to improve its manufacturing capabilities so that it can start exporting. And that brings “rainfall” to South Africa, which will benefit all South Africans in the long term.

We all dream of a South Africa where there is enough for all to make a decent living, a place where there is work for all who want to work and a sense of pride when we say, “I am a South African!”

Supporting local manufacturing helps the country move towards this dream.

So, next time you consider buying something, ask yourself: “Do I want to be part of ‘rainfall’ or ‘evaporation’? You have the buying power to make a difference. Whatever you decide today will have a lasting impact on your kids too – let’s not create drought for them.



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