LocalisationThe Current Challenge for SA Incorporated

DCD an engineering and manufacturing concern since 1911

with a long history of supplying heavy engineering components to

all coal fired & hydro power stations erected in SA and

participated in all the nuclear initiatives

to date

A balanced approach to the local content for manufacturing

• Determine local content threshold %

• No cap on award on assessment for exceeding local content threshold

Localization

Scenario

Customer identify

project that needs to have

localization

OEM starts tender process

OEM awards tender based on standard terms and conditions.

Manufacturer accepts

tender based on agreed

T&C

• OEM advised customer of successful manufacturer• Customer requires assessment• Customer introduces additional requirements

• Outcome• Manufacturer successful in assessment with additional costsOR• Assessment unsuccessful and project is put on hold until meets

requirements

• This leads• Project delay• Penalties• Additional costs• Even cancellation in some cases• This will bankrupt smaller suppliers• FAILURE OF LOCALIZATION

Scenario - Problem

Scenario – Root Causes

• OEM• Perception is that requirements does not need to be spelled out• Nor did they do a proper supplier assessment• No supplier development takes place

• Supplier• Looked at the complexity in terms of technical requirements• Without focus on the admin requirements and upfront qualifications

• Customer• Did not recognize that a new approval process was requires• Did not adopt a developmental mind set once the problem was identified

Step 1 – Create an SA Inc. approach

Step 2 - Determine administrative requirements for different manufacturing/services

Step 3 – Assess potential suppliers in terms of these requirements

Step 4 – Put a developmental plan in place for each supplier

Step 5 – Then procure

Proposed Solution

Determine requirements

Pre approve manufacturers

Create a stable market for localization

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Summary

Thank You