Localisation The Current Challenge for SA Incorporated

2. Localisation The Current Challenge for SA Incorporated

3. 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

4. Localization A balanced approach to the local content for manufacturing Determine local content threshold % No cap on award on assessment for exceeding local content threshold

5. Scenario

6. Scenario - Problem • OEM advised customer of successful manufacturer • Customer requires assessment • Customer introduces additional requirements • Outcome • Manufacturer successful in assessment with additional costs • OR • 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

7. 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

8. Proposed Solution • 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

9. Summary • Determine requirements • Pre approve manufacturers • Create a stable market for localization • Export credits

10. Thank You