The State of the

Welding Industry in
S th Africa
South
Af i
........................................................

Jim Guild
February 2012

What do we mean by the welding industry

For todays purpose only the production part of the

industry:
Manufacturing including welding fabrication
Metal construction

What do we mean by Gross Domestic Product?

For todays
today s purpose: The total market value of all final goods
and services produced by a country in a given year, plus the
value of exports
exports, minus the value of imports.
We can think of it as our national net turn-over.

South Africas GDP -

the importance of manufacturing

South Africas GDP (national turn-over)

US$ 364 Billion in 2010
R 2548 Billion in 2010

What proportion came from manufacturing?

About 15% i.e.
i e R 380 Billion which excludes the motor
vehicle trade and the metal fabrication portion of
construction.

South Africa GDP -

manufacturing contribution

GDP Sectors
400
350
Manufacturing

250
200

Construction

150
100
50

Year

20
10

20
09

20
08

20
07

20
06

20
05

20
04

20
03

20
02

20
01

20
00

R Billion

300

South Africas GDP - growth and the importance of manufacturing

Recent and future growth:
10 year growth and current growth about 3% per annum
in real terms
Target growth 7% per annum because of need to
create employment
Growth in the manufacturing
g sector about 2.5% p
per
annum over a 10 year period (major knock in 2009)

Growth in the manufacturing contribution to GDP

GDP Growth in Constant 2005 Prices

5.0

2010

2009

2008

2007

2006

2005

2004

2003

-5.0

2002

00
0.0
2001

% of Grow
wth on
Previous Year

10.0

10 0
-10.0
-15.0

Manufacturing

Year

Total GDP

South Africas GDP - growth and the importance of manufacturing

Is Manufacturing
g central to g
growing
g GDP and creating
g jjobs
what are the alternatives?
C
Can we switch
i h to b
being
i a kknowledge
l d b
based
d economy?
?
Can we be an international financial services hub?
Are there other areas of our economy with better
prospects?
If we can increase growth in the manufacturing sector by 10%
over a ten year period GDP increases by about R 600 Billion
and
d th
there iis an employment
l
t gain
i off about
b t 450 000 jjobs.
b

South Africas GDP -

the importance of welding

What role does welding play in manufacturing?

Welding (or joining) is involved in 98% of manufacturing
processes.
Obvious implication
Welding is a critical technology for our manufacturing
industry.
Result of failure to pay sufficient attention to welding
Higher level of imported products and labour with negative
growth and GDP ((further lowering
g of employment).
p y
)
effect on g

South Africas GDP -

what are the challenges in welding?

We must at least match the standards of our international

competitors - we must be able to weld effectively and
economically which means access to essential
requirements:
q
Consumables and equipment
Skilled personnel at all levels
Technology development and application
The welding industry needs to have adequate capacity and
must be able to combine the essential requirements
q
to
achieve consistent quality.

How iis South

H
S th
Africa doing
against these
requirements?

Consumables
C
bl
and equipment
eq ipment

Consumables and equipment - challenges in welding

Access to most requirements through competitive local and
international suppliers but:
Need to encourage local equipment and consumable
manufacturers
Protect our manufacturers and fabricators against
subsidised imports
Appreciate the difficulties for fabricators to invest in new
equipment technology when obliged to work in survival
mode or with at least one eye on the possible implosion
of the markets

Skilled
Skill
d
personnel

Skills challenges facing the South African

welding industry
Still difficult to attract suitable people to welding-related careers
Skilled welders
welders, supervisors,
supervisors inspectors
inspectors, non
non-destructive
destructive testing
technicians, welding technologists and welding engineers are in
short supply
Result is that skilled workers are imported for large capital expansion
projects, shutdowns and construction projects

Skilled personnel at all levels - challenges in welding

The welding industry has good employment prospects
Employs a full spectrum of people with all levels of education and
qualifications ranging from Standard 10 to Post Graduate
Offers a wide variety of careers with progression opportunities
Generally the employment profile is well suited to South Africa

Employment profile of welding industry

Educ
cational Level

Lower

Intermediate

Higher
1

10
N off J
No
Jobs
b A
Arising
i i
Log Scale

100

Where are new jobs arising? - welders

New jobs arise where money is being spent e.g. Eskom

power generation, Transnet transportation and pipelines etc
and Sasol and other petrochemical plants:
Easy to forecast the skill requirements of welders
Jobs are arising at the high end of the skills spectrum

New jobs - welders

Why at the high end of the welder skills spectrum?
Complexity of welding (many tube and pipe welds in many positions)
Multiple processes used to make welds (e.g. tig root welds and mma
fill and cap the weld)
A wide range of materials are being welded including special high
temperature grades of steel which require careful control of the
welding process
The hazard category of the plant (plant failure has high financial
consequences and there is high risk to people)

Skills issues -

challenges at welder artisan level

It is widely
y accepted
p
that South Africas artisan shortage
g is a chronic
problem
Skill levels are low and high levels of rework are common
National training programmes are focused on basic skill levels and
have not appreciated that high end skills are required
Newly trained welders emerging FET colleges and acquiring NQF
qualifications
lifi ti
h
have a credibility
dibilit iissue

Skills issues -

challenges at welder artisan level

Imported Welders
Only the Department of Home Affairs knows how many imported welders
are currently working in SA?
Initially there were government attempts to prevent the importation of
welders but this has been relaxed to some extent at least this decision
helps secure the jobs of the already employed workforce even if it doesnt
get the unemployed employed!

Safe to assume that the number of imported welders working in

South Africa is in the thousands and not in the hundreds and
working on long term jobs

Skills issues -

challenges at welder artisan level

Imported Welders

Between 30% and 40% of the welders on working power stations are
imported
Up
p to 80% of the welders working
g on the new p
projects
j
- Medupi
p and Kusile
- are imported
Importation of welders no longer restricted to construction and short term
contracts and the numbers are larger - commonplace in all areas of
industrial activity including fabrication shops with long term contracts

Skills issues -

challenges at intermediate level

SAIW has trained supervisory and quality control personnel for many years:
Quality control programmes are successful South Africa probably has
the best programmes in the world (SAIW / IIW qualifications) for training
inspectors but there are still challenges:
The
Th quality
lit off the
th programmes mean high
hi h mobility
bilit off personnell with
ith
many qualified inspectors working outside the country
Increased numbers of course candidates with little or no prior welding
experience
The current level of success of training
g supervisory
p
yp
personnel using
g the
IWP and IWS programmes is disappointing:
Mainly due to reluctance of companies to train supervisors because of
increased mobility with recognised qualifications

Skills issues -

challenges at higher level

Since 2003, when SAIW became the Authorised National Body of IIW in
South Africa, only 20 International Welding Engineers (IWEs) and 17
International Welding
g Technologists
g
((IWTs)) have been registered
g
in
South Africa:
Germany has averaged about 700 IWEs and 100 IWTs per year
over the last 10 years
China is about to overtake Germany in training new IWEs

Skills issues -

challenges at higher level

The IWE and IWT programmes are additive courses which assume
prior knowledge at engineer and technologist level.
In the case of the IWE programme it makes more sense for SAIW to
cooperate with a university which has the underlying engineer training
structure.
Wits has been training welding engineers for a number of years but the
limited staff capacity has meant that output has been very low.
The University
Th
U i
i off Pretoria
P
i has
h recently
l made
d a significant
i ifi
iintervention
i
which will significantly increase the numbers of IWEs and IWTs.

Skills issues -

solutions and challenges

In terms of training programmes and qualifications for improving skill

l
levels
l th
there iis a simple
i l solution
l ti using
i th
the IIW system:
t
Developed by the best experts from more than 50 countries
Covers the full spectrum of welding personnel
South Africa has the accreditation needed to use the IIW courses
Ensures that Learners are trained by
y knowledgeable
g
trainers in
suitable facilities
Ensures learners are trained according to a credible programme that
delivers the high skills levels required by industry
The IIW qualifications are referenced in international standards and
are used by international end users and project houses

Skills issues -

solutions and challenges

At the level of supervisory and management welding personnel the IIW

system
t
is
i already
l d widely
id l used
db
by S
South
th Af
African
i
iindustry
d t the
th bi
big
remaining challenge is at the level of welders.

There are some bright spots:

Eskom training 700 welders using the IIW system over the next 6 years.

MERSETA - Institute of Sectoral Occupational Excellence Project

A greatt id
idea nott carried
i d through
th
h to
t completion
l ti

Technology development -

challenges

Very
y little welding-related
g
research is currently
y performed
p
at South
African academic and research institutions
Only University of Pretoria and Nelson Mandela University have
research programmes addressing welding and fabrication issues and
these are modest!
Very little technology development work is currently undertaken in
Universities or Technical Institutes

Other challenges facing metal fabricators?

Recently a Metal Fabricators Group identified the following as just
some of the factors affecting its sustainability and growth:
Rapidly rising administered prices (power, rail, ports etc)
Skills shortages
g
Poor control over imported products
Dumping,
Dumping primarily from the Far East
Poor export incentives
Currency volatility
Labour relations and labour productivity
Boom
B
or bust
b t economy

Challenges what can the Universities and the Technical

I tit t do?
Institutes
d ?
Facilitate and provide access to the best training programmes in the
world
Facilitate
F ilit t and
d supportt the
th access off welding
ldi fabricators
f bi t
to
t the
th quality
lit
certification programmes ( IIW ISO 3834 programme) used as
contract or order entry requirements by purchasers
Partner in the development of centres of expertise for the
development of wider application of modern welding
g processes and
overcoming technical barriers arising in new projects and
maintenance activities SAIW Centre of Welding Technology at
University of Pretoria, SAIW supported chair at Wits University,
SAISC and SAISI university activities

Challenges what can the welding fabricators do?

Address factors impacting on productivity and quality issues
make use of the benefits of technology developments
use the ISO 3834 certification system for effective quality
management programmes
switch
it h from
f
a culture
lt
off inspecting
i
ti quality
lit into
i t a product
d t to
t a culture
lt
of right first time increase the numbers of skilled personnel using
the IIW qualifications
Use technology centres for the technical support needed to ensure they
can compete in new projects
j
with new welding
g challenges
g
Form a representative body to communicate and interact with
government on issues which negatively impact on the ability of the
industry to grow

Challenges what can government do?

Recognise the potential of the welding fabrication industry for the
significant impact it can make on GDP growth and employment
Appreciate that money spent on the welding and fabrication industry is
low risk and will deliver a high return on the growth and employment
goals quickly
Government should be involved in funding in all the areas we have
mentioned
Training at all levels of personnel
Technology centres
Quality systems
Overcoming barriers identified by metal fabricators, and
Especially
E
i ll iit should
h ld h
have a vehicle
hi l iin which
hi h iit meets with
i h the
h welding
ldi
and fabrication industry to achieve development goals

Concluding remarks
South Africa has not encouraged the metal fabrication industry as
much as it should have and this needs correcting
Universities and the technical Institutes such as SAIW, SAISC and
SAISI are doing what they can to improve national capability of using
manufacturing and welding to improve growth and reduce
employment by working on improving skills and providing access to
quality certification programmes and research and development but
much more support is needed from industry and government

Concluding remarks (cont.)

The approach of Germany in 2009 at the height of the recession in
Europe
p was enlightening
g
g
DVS the German Welding Institute was upskilling and re-skilling welders
by training on double shifts paid for by the German government
Germany knows the value of manufacturing to its national well-being
and the contribution needed by the welding industry!

Concluding remarks (cont.)

We all have to remember that every welded vessel or structure
which is imported and every welder imported has a negative impact
on GDP and employment.
Its not possible to avoid importing some manufactured equipment
and skilled human resources. These sometimes have a beneficial
effect overall but every importation should be questioned not by
the regulatory authorities but by industry at large by the end user or
the agent who places an order for fabricated equipment overseas
by the fabricator or constructor who imports labour.

WE NEED A WINNING
PARTNERSHIP TEAM SOUTH
AFRICA