Lesson 4

SECONDARY SECTORS
Definition of a secondary sector
• The secondary sector is concerned with the processing and
manufacturing of raw materials into value-added products.
• It transforms raw materials into goods or products.
Contribution of secondary activities to SA
economy
• At the moment secondary sector contributes about 23% to the GDP of
SA
• It produces goods for export to earn foreign exchange
• It produces goods for sale to domestic consumers
• It generates more employment in the economy
• It helps to improve the standard of living of people
Types of industries
• Heavy industries
• Light industries
• Raw material-orientated industries
• Market orientated industries
• Footloose industries
• Ubiquitous industries
• Bridge / Break-of-bulk industries
 Heavy industries
Define Heavy industry is the manufacture of large, heavy
articles and materials in bulk
Characteristics It has large scale industries
Located on the outskirts of settlements
It occupies large areas of land
It is associated with high levels of noise and air
pollution
It is close to bulk transport facilities (road, railway
lines and harbours or ports and power supply

Examples Oil refining, chemicals, ship building and engineering,

 Light industries
Define Light industry is the manufacture of small or
light articles.
Characteristics It manufactures small products
It is located close to CBD
It occupies small areas of land
It causes little pollution and congestion
It depends mainly on road transport and local
power supply

Examples Jewelry making, clothing factory, food and

beverages (drinks) Brewery + Cocacola
Raw material orientated industries

• These industries are located close to the source of raw materials

• The raw materials might be bulky and expensive to transport
• Examples: A sugar mill located near or inside a sugar cane plantation
and iron and steel factory.
Market orientated industries

• These are industries that are located close to the market (customers)
• Goods are probably perishable or expensive to transport
• Examples: Glass manufacturing and cheese/yoghurt processing
industry
Footloose industries

• These are industries that are not influenced by access to markets or

raw materials
• These service orientated industries operate through direct marketing
• Examples: Software industries and research companies
• Ubiquitous industries
Ubiquitous industries

• These are industries that can be found/located anywhere

• They provide services that are available 24/7 from any geographic
location.
• Examples: Cellphone companies
Bridge/Break-of-bulk industries

• These industries are located in between the source of raw materials

and market
• Examples: Oil refineries
•
Factors favouring industrial development
in South Africa
• Raw materials
• SA has large availability of wide range of minerals that are mined
• A variety of crops are available due to variable climatic conditions
• These wide range of raw materials support production in SA
• Labour supply
• Labour supply is large, e.g. unskilled and skilled labour is available
• Availability of tertiary institutions to train and skill the labour force
Factors favouring industrial development
in South Africa (cont.)
• Water supply
• Water is readily available near industrial cores
• Water transfer schemes such as the Lesotho Highlands and Tugela-Vaal
supplement the areas with water shortages.
• Energy supply
• Many industries in South Africa are located close to the source of energy
• Huge coal reserves are used to generate electricity by Eskom which is the grid
• Koeberg nuclear power station supply the Western Cape with electricity
• Wind farms such as Darling and klipheuwel wind farms also assist north of
Cape Town with electricity.
Factors favouring industrial development
in South Africa (cont.)
• Transport
• SA has a well-established transport infrastructure such as roads, railway lines, ports
and airports
• These transport networks help the country to have access to domestic and
international markets.
• Political intervention (Government support)
• Recently government has rolled out a new industrial development plan called
Industrial Policy Action Plan 1+2 (IPAP1+2) which is being funded through foreign
investment
• There are also several government policies aimed at industrial development, e.g.
The Small and Medium Manufacturing development Programme (SMMDP), IDZs,
SDIs and the National Development Plan (2030).
Factors favouring industrial development
in South Africa (cont.)
• Competition
• SA’s quality products compete well with international products, e.g.
diamonds, gold, fruits and wine
• Summer fruits are preferred in Europe
• Trade
• Trade is promoted by access to ports for exports and imports
• Free trade without barriers of trade allows SA to do trade with many
countries
• Fair trade agreements assist all traders to participate
Factors hindering industrial development in SA

• Over-concentration
• SA’s industries are over concentrated in the four core industrial areas
Which are: Gauteng ; eThekwini ; Nelson Mandela Metropole and South
Western Cape.
• That has resulted in traffic congestion, high demand for land and high
salary demands in these major urban areas.
• Transport
• Distance to markets. SA’s major markets are in Europe, North America
and Japan, countries with high purchasing power.
• The cost of exporting goods is higher, so it is difficult to compete
Factors hindering industrial development
in SA
(cont.)
• Air pollution
• Industries are the major cause of air pollution during production and so they must
reduce this air pollution in accordance with international and local agreements.
• Air pollution impacts negatively on the environment and people
• Labour supply
• Labour force is insufficiently skilled
• ‘Brain drain’ has resulted in a loss of many skilled technicians and managers
forcing the country to attract others from other countries at high cost.
• Lack of funding to uplift educational standards has impacted negatively on skill
development in SA.
• Workers strike action delays production and less profits
Factors hindering industrial development
in SA
(cont.)
• Water supply
• Water supply is erratic in SA due to drought conditions
• Industries that use more water in processing are negatively impacted
(Gauteng)
• Raw materials
• Raw materials are available but some are not economically viable to
mine.
Factors hindering industrial development
in SA
(cont.)
• Political interference
• Government bureaucracy, e.g. regulation, registration and tax levels block new entrants to the
industry (corruption)
• There is high political insecurity and crime (State Capture Commission)
• Competition
• Products from certain countries such as China compete with local products in terms of quality
and price which impact negatively on industrial development.
• Cheap imports and counterfeit goods compete with local goods (imitations)
• Trade
• Industries do not develop if there is lack of free trade and fair trade and there is trade
embargoes (blockages)
• Certain barriers prevent industrial development, e.g. tariffs, import quotas, administrative
barriers and procurement policies.
Four core industrial areas of South Africa

• SA’s industries are over concentrated in the four core industrial areas
which are: Gauteng (PWV – Pretoria – Witwatersrand – Vereeniging);
eThekwini (Durban-Pinetown); Nelson Mandela
Metropole (Port Elizabeth-Uitenhage) and South Western Cape.
Industrial regions to be studied
for 2023 are: Gauteng and Port
Elizabeth-Uitenhage
Gauteng (PWV)

• The largest industrial region in SA and the initial development was

influenced by the discovery of GOLD.
Map showing the location of Gauteng core industrial region.
Factors influencing the location of Gauteng

• A good transport network (road, rail and air) In PWV.

• Well linked to other regions of South Africa especially harbours.
• Large market.
• Raw materials available.
• Has skilled labour available. It has the largest population from all the core
• industrial region/provinces.
• Large power stations located in PWV and coal mines are close (large coal
• mines in Mpumalanga).
• Sufficient water supply (water supply supplemented by water projects e.g.
• TUVA project).
• Has many tertiary education institutions for skills development.
• Relatively flat land (easier construction of industries).
Main industrial activities in Gauteng industrial region

• Iron and steel products e.g. (Mittal Steel)

• Chemical products e.g. (SASOL)
• Engineering products e.g. (Aviation)
• Transport equipment
• Machinery
Factors that favour the continued success of Gauteng industrial
region

• Great variety and large amount of raw materials

• A good transport network (roads, rail + air) linked to other regions
and linked to harbours
• Large market
• Has skilled and unskilled labour
• Sufficient and relatively cheaper electricity supply
• Sufficient water supply
• Gauteng has many tertiary education institution for skilled
development.
Factors hindering Gauteng industrial region

• Over-concentration of industries, e.g. in the core industrial regions.

• Strain on resources e.g. water supply, power supply.
• Load shedding and increasing costs of electricity can hinder productivity.
• Strain on transport infrastructure (traffic congestion).
• PWV industrial region is far from the harbours creating more expenses.
• Industries, especially heavy industries, create a lot of air pollution.
• Labor unrests and protests.
• Safety problems.
• Power struggle between labor unions and industries.
• Production decrease due to workers taking more sick leave
• Hard lock-down during pandemics has a negative impact on productivity
Map integration: PWV (Gauteng Industrial Region)
Economic and Social Impacts
• Economic impacts
• Job opportunities are created
• Infrastructure is improved
• The provincial economy (GDP) is higher
• It attracts foreign investors
• Social impacts
• Better standard of living
• Improved service delivery
• There is poverty alleviation
• There is skills development in the province
 PORT ELIZABETH-
UITENHAGE INDUSTRIAL
REGION
The fourth largest industrial region in South Africa.
Map showing Port Elizabeth-Uitenhage
Industrial Region
Factors influencing the location of PE-
Uitenhage Industrial Region
• It is centrally located modern harbour
• More than adequate water supply
• Equalized rail tarrifs
• Large labour pool
Main industrial activities in the Port
Elizabeth-uitenhage Region
• Motor vehicle assembly plants
• Motor vehicle parts
Factors that favour the continued success of
PE-Uitenhage Region
• It is centrally located modern harbour
• More than adequate water supply
• Equalized rail tarrifs
• Large labour pool
• The Coega new project
Factors that hinder the continued success of
PE-Uitenhage Region
• It is far from the main consumer areas such as Gauteng
• Labour costs in this region is higher than Asia and Eastern Europe for
car production.
• There are labour unrest and strikes
Economic and Social impacts of PE-
Uitenhage Industrial Region
• Economic impacts
• Job opportunities are created
• Infrastructure is improved
• It attracts foreign investors
• Social impacts
• Better standard of living
• Improved service delivery
• There is poverty alleviation
• There is skills development in the province
THE END
• Thank you!!
• Shalom!!