"DRAFT CHIETA SSP 2011 TO 2016"
FIVE YEAR SECTOR SKILLS PLAN FOR THE CHEMICAL INDUSTRIES SECTOR EDUCATION AND TRAINING AUTHORITY 2011 – 2016 2012 Update FOREWORD The CHIETA is proud to present its 2012-13 Sector Skills Plan (SSP) Update, derived through a professionally researched process that entailed extensive stakeholder consultation that included our sine sub-sectors and our key government departments aligned to our sector. This is in line with the prominence given to importance of research as identified in NSDS III, and as espoused by the Honourable Minister of the Department of Higher Education and Training, Dr Blade Nzimande, as well as the Director General, Mr. Gwebinkundla Qonde. This research has supported the CHIETA to obtain credible information for this 2012-13 SSP update. The focus on skills development within the Chemical Industries Sector is about this process of deepening individuals' specialised capabilities in order that they are able to access incomes through formal sector jobs, as well as through small and micro enterprises (SMEs) or community projects which in turn positively contribute to the economic success and social development of our country. This learning process will also enable people to continue learning and adapting to the constantly changing work environment. In the period of NSDS III, the CHIETA’s approach to skills development now caters for both the formal education and training system as well as the non-formal system. It is primarily concerned with industry-based training within the Chemical Industries Sector, improving the intermediate level skills base of the country and labour market training for targeted groups (including the unemployed, retrenched workers, youth, women, people living with disabilities and people in rural areas). There is now also a far greater focus on strategies to accelerate the completion of diplomas and degrees of those with chemical industry related academic learning that lack workplace experience To this end, a range of partnerships are being forged with our companies to open their workplaces. The Skills Development Act as amended has generated great interest within the ranks of the CHIETA stakeholders from the labour, business and government constituencies. The new approach to developing work-ready artisans for the sector has received numerous accolades. This vision of the DHET, supported by the creation of the Quality Council for Trades and Occupations, as well as the more comprehensive occupational codes as specified in the Organizing Framework of Occupations, has given a great boost to the CHIETA to obtain a deeper understanding through our source-data based data collection by way of the workplace skills plans that we obtained in 2011, to understand our sectors’ skills needs right down to the task level. This new approach has already begun to inform the CHIETA about the real skills gaps and to plan for addressing them in this updated Sector Skills Plan. The 2011-12 SSP update has yielded more reliable data than the previous years. This has now laid the foundation for the realisation of the first strategic goal of NSDSII, namely the development of a credible institution for Skills PlanningFor the CHIETA, the most exciting aspect of NSDS III is the linking of the work of the SETAs with national macro strategic frameworks of Government namely the Industry Action Plan(IPAP 2) Human Resources Development Strategy of SA, priorities as articulated by social partners in the New Growth Path, the National Skills Accord as well as requirements to support the relevant legislation governing the chemical industry sector such as inter-alia, the Environmental legislation and Occupational Health and Safety legislation. The need to work with relevant government departments is clear and the CHIETA has already started forming the required partnerships in this regard. We are confident that the SSP 2011\12 will provide a solid basis for delivery on the numerous NSDS III outputs that speak directly to the centrality of the SSP in skills development interventions for the Chemical Industry. Apart from this being captured in our SSP these performance areas forms an integral part of the CHIETA Business Planning process for 2012\13 going forward to ensure focus and delivery on SSP objectives The pharmaceutical industry has a major role to play in the fight against the scourge of HIV and other preventable diseases, especially with the development of generic ARV’s that put them in closer reach of the people who need them the most. Local pharmaceutical manufacturing is significant not only because of the country’s health issues but also because it involves the application of advanced technologies and their innovation and has the potential to create jobs in the country. The vision to end poverty and create jobs through appropriate skills training at the local, municipal, district levels in both the urban and rural areas has given real meaning to skills development and a huge responsibility to the SETAs. Our SETA has embraced the challenges that NSDS III has brought about, and this SSP update reflects the areas that we have now identified though, among others, our PESTEL interventions and focussed discussions with the relevant government departments (Dept of Energy, Environmental Affairs, Trade and Industry). The strategic focus of the CHIETA now provides a new approach to skills development within a broader policy context even in the CHIETA’s 2012-13 Strategic Plan. This Plan is now grounded in the macro-economic, industrial, labour market, and science and technology requirements in relation to how they affect our specific sector. Post school education and training has been fore-grounded as a result of the research conducted to develop the current SSP update, with a focus on the youth in particular. The National Industrial Policy Framework has identified that for the chemical industries sector, the following areas of focus: Chemicals, Plastics, Fabrication and Pharmaceuticals. These areas will receive attention going forward; also informed by research commissioned by the various government departments. The Chemicals Industries Sector is one of the main drivers of growth in the manufacturing sector as a whole. It is responsible for greater value addition and greater employment creation than any of the other sub-sectors and it contributes approximately 23.2% to manufacturing GDP and makes up about one quarter of manufacturing sales. The significance of the chemical sector has been recognised by the government, which designated it as a high priority sector suitable for growing the economy and creating further employment. South Africa is a world leader in certain sub-sectors within the Chemical Industries Sector, such as petrochemical that is at the fore-front of coal-to-liquid conversion technology, gas-to-liquid conversion technology, etc. We are confident that this SSP Update of the CHIETA will stand up to scrutiny, since it is based on reliable data obtained through well researched methods. Ms. AYESHA ITZKIN Chief Executive Officer (Acting) Chemical Industries Education and Training Authority TABLE OF CONTENTS FOREWORD ............................................................................................................................................. 2 TABLE OF CONTENTS................................................................................................................................ i ABBREVIATIONS AND ACRONYMS ......................................................................................................... iii LIST OF TABLES ....................................................................................................................................... iv EXECUTIVE SUMMARY ................................................................................................................................... i 1. Context ......................................................................................................................................... i 2. Sector Profile.............................................................................................................................. iii 3. Demand for Skills ....................................................................................................................... iv Designated Trades ......................................................................................................................... iv Scarce and Critical Skills ................................................................................................................. iv Critical Skills .................................................................................................................................... v 4. Provision and Supply of skills ...................................................................................................... v CHAPTER 1. CONTEXT ............................................................................................................................ 1 1.1 Purpose of SSP ........................................................................................................................ 1 1.2 National Skills Development Strategy III ................................................................................. 1 1.4 Industrial Structure and Dynamics.......................................................................................... 3 Chapter 2. Sector Profile ................................................................................................................. 14 2.1 Industrial and Occupational Coverage .................................................................................. 14 Base Chemical & Petroleum .......................................................................................................... 15 Explosives & Fertilisers .................................................................................................................. 16 FMCG & Pharmaceuticals ............................................................................................................. 16 Speciality Chemicals & Surface Coatings ...................................................................................... 16 Glass .............................................................................................................................................. 16 2.2 Macroeconomic Context ............................................................................................................. 18 2.3 Summary Profile of Employers.............................................................................................. 20 2.4 Profile of the Labour Force ................................................................................................... 22 CHAPTER 3 – DEMAND FOR SKILLS ............................................................................................................... 26 3.2 WSP and qualitative skills information ................................................................................. 26 3.3 Designated Trades ................................................................................................................ 43 3.4 Scarce and Critical Skills ........................................................................................................ 45 i CHAPTER 4. PROVISION AND SUPPLY OF SKILLS ....................................................................................... 51 4.1 National Senior Certificate results ........................................................................................ 51 4.2 Output from Further Education and Training Institutions .................................................... 52 4.3 Enrolment and completion from HET institutions ................................................................ 55 4.4 Training by employers........................................................................................................... 59 4.5 Priority qualifications ............................................................................................................ 63 4.6 Industry/provider links, SETA/provider partnerships ........................................................... 63 Bibliography .......................................................................................................................................... 68 Appendices............................................................................................................................................ 70 ii ABBREVIATIONS AND ACRONYMS ABET Adult Basic Education and Training AIDS Acquired Immune Deficiency Syndrome AMTS Advanced Manufacturing Technology Strategy API Active Pharmaceutical Ingredient ARV Antiretroviral ATM Automated Teller Machine BBBEE Broad-Based Black Economic Empowerment CAIA Chemical and Allied Industries' Association CHIETA Chemical Industries Sector Education and Training Authority CPD Continuing Professional Development COIDA Compensation for Occupational Injuries and Diseases Act CSEAC The Chemicals Sector Expert Advisory Committee CSP Customised Sector Programme CTL Coal-to-Liquid Technology DHET Department of Higher Education and Training DME Department of Minerals and Energy DoE Department of Education DoL Department of Labour dti Department of Trade and Industry FET Further Education and Training FMCG Fast Moving Consumer Goods GDP Gross Domestic Product GHG Green House Gases GTL Gas-to-Liquid Technology HET Higher Education and Training HIV Human Immunodeficiency Virus HRDS Human Resource and Development Strategy IPAP Industrial Policy Action Plans MTSF Medium Term Strategic Framework NC(V) National Certificate (Vocational) NIPF National Industrial Policy Framework NQF National Qualifications Framework NSDS National Skills Development Strategy OFO Organizing Framework of Occupations PESTEL Political, Economic, Social, Technological, Environmental and Legislative PIVOTAL Professional, Vocational, Technical and Academic Learning PG Dip/Cert Post Graduate Diploma / Certificate QCTO Quality Council for Trades and Occupations SAPIA South African Petroleum Industry Association SARS South African Revenue Services SET Science, Engineering and Technology SETA Sector Education and Training Authority SIC The Standard Industrial Classification Code SMME Small, medium-sized, and microenterprises SSP Sector Skills Plan UG Dip/Cert Under Graduate Diploma / Certificate WSP Workplace Skills Plan LIST OF TABLES Figure 1.1: Chemical Sector Value Chain Figure 2.1 Real output, real fixed capital stock, real value added, and employment Figure 2.1 Real output, real fixed capital stock, real value added, and employment Figure 2.2 Employment and real wages 1990 – 2010 Figure 2.3 Imports and Exports in the Chemical Sector Figure 2.4 Levy Paying Firms by Chamber Figure 2.5: Firm Sizes by Chamber Figure 2.6: Levy Paying Enterprises by Province Figure 2.7: Gender and Race Profile by Occupation Figure 2.8 Occupation breakdown of Female workers in the Chemical Sector Figure 2.9 Racial profile of workers by Occupation Figure 2.10 Age profile of the workforce by occupation Figure 2.12 People with Disabilities by Occupation Figure 3.2 Skills Structure of the Chemical Sector 1990-2010 Figure 3.2 Chemical Sector Skills Demanded by Occupation Figure 3.3 Employment in Base Chemicals by Occupation, Race and Gender Figure 3.4 Age profile of the Base Chemicals Subsector by Occupation Figure 3.5 Real output, real value added, real fixed capital stock, employment Figure 3.6 Petroleum Subsector Skills demanded by Level and Occupation Figure 3.7 Age profile of the Petroleum Subsector by Occupation Figure 3.8 Skills demanded in Fertiliser and Explosives Subsectors by Level and Occupation Figure 3.9 Skills demanded in Fertiliser and Explosives Subsectors by Level and Occupation Figure 3.10 Age profile of the Fertiliser and Explosives Subsector by Occupation Figure 3.11 Age profile of the Glass Subsector by Occupation Figure 3.12 Real output, real value added, real fixed capital stock, employment in the Glass Subsector Figure 3.13 Speciality chemicals employment by race and gender Figure 3.14 Surface coating employment by race and gender Figure 3.15 Age profile of speciality chemicals subsector Figure 3.16 Age profile of surface coating subsector Figure 3.17 Employment in the FMCG subsector by Occupation and Skill Level Figure 3.18 Age profile of the FMCG subsector Figure 3.19 Pharmaceutical subsector employment by race and gender Figure 3.20 Age profile of the pharmaceutical subsector Figure 3.21 CHIETA Designated trades by subsector Figure 3.22 Age profile of CHIETA designated trades Figure 4.1 SET Completion rates at higher education institutions by race and qualification type Table 2.1: The CHIETA Chambers reconciled with the dti’s Strategic sub-sectors Table 2.2: Sub-Sectors and corresponding SIC codes for the Chemical Industry Table 3.3: Future skills required by Nuclear Fuels Table 3.2 Racial profile of CHIETA designated trades Table 3.3 Absolute Scarce Skills Table 4.1 Results of the National Senior Certificate: 2008 and 2009 Table 4.2 Results of examinations in selected National Certificate subjects at FET Colleges Table 4.3 Results of examinations in selected National Certificate (Vocational) subjects at FET Colleges Table 4.4 Analysis of throughput at higher education institutions Table 4.5 Selected University qualifications relevant to the Chemicals Sector Table 4.6 Training by occupation and type Table 4.7 Training for the unemployed by subsector and type Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 EXECUTIVE SUMMARY 1. Context In terms of the Skills Development Act, the Chemical Industries Sector Education and Training Authority (CHIETA) is required to prepare a Sector Skills Plan (SSP) every five years within the framework of the National Skills Development Strategy (NSDS). The NSDS III has five areas of strategic impact that drives the planning process of CHIETA. They are: 1. Equity impact in the realm of class, race, gender, age, disability and HIV/AIDS. 2. Programmes to facilitate access, success and progression; 3. PIVOTAL programmes 4. Skills Programmes and other non-accredited short courses and 5. Programmes that build the academic profession and engender innovation. The structure and dynamics within the chemicals sector have been fostered by a political and regulatory environment that promoted protectionism and isolationism. This has resulted in a large number of small firms and less competitive exports even though they are well placed to service their Southern African neighbours. Now that South Africa is fully integrated into the global community, chemical companies are striving to focus on the need to be internationally competitive and the industry is reshaping itself accordingly. The sector contributes strongly to manufacturing in South Africa. The coke, petroleum, chemical products, rubber and plastic and the glass and other non-metallic mineral products combined, comprised 23.2% of manufacturing in 2011 (Statistics South Africa). Two noticeable characteristics are to be observed about the sector: (i) While its upstream segment is concentrated and well developed, the downstream sector, although diverse, remains underdeveloped; (ii) The synthetic coal and natural gas-based liquid fuels and petrochemicals industry is prominent, with South Africa being the world leader in coal-based synthesis (coal-to-liquid – CTL) and gas-to-liquids (GTL) technologies. Political stability has offered an enabling environment for economic development and various government strategies have prioritized the chemical sector for growth and development. These include: The Chemical Sector Development Strategy, the Advanced Manufacturing Technology Strategy (AMTS), the National Industrial Policy Framework (NIPF) and the related Industrial Policy Action Plans (IPAP), the Minerals Beneficiation Strategy managed by the Department of Minerals and Energy (DME) and the 20 year Integrated Resource Plan which states that Nuclear energy will provide 22.6% of the energy mix by 2030. The most relevant policy affecting the skills of the chemical sector is the National Skills Development Strategy and its associated legislation. The purpose and key objectives of the NSDS III is detailed in section 1.2 and if effectively implemented by the relevant SETAs, it has the potential to materially impact on the sector. Feedback from stakeholders indicate that where companies are actively engaging with the SETAs (CHIETA in this case), the benefits are reaching further than even the drafters of the strategy could have envisioned. In terms of economic issues, the sector is recovering well from the recession. The local sector has seen a 6% growth in output from 2009 to 2010 (Quantec 2011) and an even more positive jump in their European counterparts with a year on year increase of 7% in January 2011 (ECIC 2011). The greatest economic issue raised by stakeholders was that of international competitiveness. The international literature is almost unanimous in predicting the further globalisation of the chemical Executive Summary i Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 sector (Patel 2008, MCE 2010, Deloitte 2010). What this means is that economic and political integration will continue, requiring the chemical sector to compete globally. In addition, the distribution of markets will change as growth markets in developing economies begin to represent a higher proportion of global consumption. This represents both an opportunity and a threat to the future of the South African chemical sector depending on the level of international competitiveness. The major social issues in the chemical sector reflect the major issues in South African society. They are: unemployment, HIV/AIDS and crime. The chemical sector has been shedding jobs consistently over the last 15 years. Total employment has shrunk by roughly 80,000 jobs from 250,000 in 1995 to 170,000 in 2010 which translates to a 32% reduction. This is not a phenomenon unique to South Africa but rather a reflection of how the global market is evolving. The European sector has shrunk similarly from a base of 1.587 million people in 1995 to 1.15million in 2010 (ECIC 2011). HIV / AIDS has had an adverse effect on the sector; the disease has resulted in increased absenteeism, reduced productivity and the loss of skills where workers have succumbed to the disease. The Redpeg report on the impact of HIV/AIDS in the chemical sector revealed that on average, an extra 5 employees are needed per large company to account for losses due to deaths and retirements. In addition, an extra 4 are required on average to account for productivity losses. The other major social factor impacting on the South African chemical sector is crime. The consequences of the scourge of crime have been adversely felt by the sector through theft of essential equipment, and stocks of finished products. This has led to the disruption of services and the dismissal of culpable employees resulting in the loss of skills. Along with the globalisation of markets, one of the greater drivers of change over the next 2 decades will be advances in technology. Changes in the technological environment are likely to create new markets (innovations), create production efficiencies (competitiveness) and assist in complying with forthcoming environmental regulations; all of which are key to the success of the local chemical sector in the future. Key to the success of R&D developments in the economy are: Interactions between academic institutions, large established chemical companies, and small specialized engineering firms. The presence of high level skills High intensity of R&D in the economy (proximity to the technological frontier) It is proposed that in order for the South African sector to compete globally, the level of and effectiveness of R&D investment needs to be increased. Environmental concerns are a key factor in the development of the chemicals sector. South Africa has adopted first-world standards in its environmental policies, introducing regulations to promote co-operative environmental management and providing guidelines for the disposal of hazardous waste. Export orientated sectors are becoming increasingly aware of the potential barriers which inadequate environmental standards present to trade and are seeking to improve environmental performance. A number of government initiatives to improve environmental performance, have recently been introduced or are imminent. This will have significant financial impact on the integrated synthetic fuel/chemical industry value chain. For instance the synthetic fuels value chain faces a significant number of regulatory challenges. Examples include the recently released Consumer Protection Act and the Air Quality Act. Pending legislation on clean fuels and labour broking if enacted, may lead to additional challenges for the sector. Firms will have to invest in new plants that incorporate new technology which may require upgrades in systems which in turn will require an upgrade of skills for operators. Firms that rely on tenders are likely to be affected by the outlawing of labour brokers as their labour requirements fluctuate according to need. Concerns have also been raised in reference Executive Summary ii Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 to the proposed National Health Insurance Act because of the need for affordable medication which could lead to company closures and job losses. 2. Sector Profile The chemical industry can be classified into the following five chambers1: Base chemicals and petroleum Fertilisers and explosives Fast moving consumable goods and pharmaceuticals Specialty chemicals and surface coatings Glass The data indicates that industry has 1,857 active members and in terms of the number of levy paying firms the sector is dominated by the Base chemicals subsector (31%) followed by the Speciality Chemicals (19%) with the smallest subsector being Explosives (0.4%). In terms of geographic distribution, by far the most active province is Gauteng with 47% of firms in the sector being based there. This is followed by KwaZulu Natal with 18% of firms and the Western Cape with 16%. The occupational profile of the sector shows again how skills intensive it is. While Plant and Machine Operators and Assemblers is the largest single occupational group representing 21% of workers, the high skilled occupational groups of Managers, Professionals and Technicians / Associated Professionals represent a total of 50% of workers when combined. In terms of equity, the sector is very much dominated by men with 69% of workers being male and only 31% female. However, while there are fewer female employees in the sector, their occupational breakdown is skewed towards the higher skilled occupations. The highest proportion of female workers can be found in the clerical and support occupations (21%) but a full 55% of all females in the sector are either Managers, Professionals or Technician / Associated Professionals. The sector has a fairly good age distribution with 40% of workers being younger than 35 years old, 50% aged between 35-55 and 10% over 55. However, only 8% of workers are under the age of 25. Even when one examines the artisan dominated occupational groups of Craft and Related Workers and Plant and Machine Operators, only 7-8% of employees are younger than 25. Anecdotal evidence based on stakeholder consultations suggests that industry is not entirely satisfied with the quality of artisan graduates in general and that they instead end up in somewhat of a bidding war over the more experienced workers. According to the 2011 WSP submissions, the target of 2% of employees to be people with disability has been comfortably met. A total of 2,656 disabled workers are currently employed in the sector representing just over 3%. These employees come from all occupational categories with only Service and Sales Workers employing less than 2% disabled workers. 1 SETA demarcation does not always correspond neatly with the standard industrial classifications, hence not all industries that fall under the traditional umbrella of chemicals are included in the SETA’s mandate. Executive Summary iii Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 3. Demand for Skills The demand for skills in absolute numbers has been declining steadily over the last two decades with investments in capital equipment being largely used to replace labour. These reductions in employments have largely come at the expense of unskilled and semi skilled workers resulting in the skills mix tending towards the higher level skills. The exception to this rule is the glass industry that while also losing jobs has remained largely driven by semi and unskilled labour with reductions in employment affecting all skills levels. The sector includes activities from research, high level process development to manufacturing. Therefore outside of the generic administration skills, the sector demands a high number of professionals (15%), technicians (19%) and artisans / machine operators (26%). As can be expected, the number of labourers and elementary occupations is relatively low with only 12% of employees being classified in those occupations. In general the economic performance of the sector has improved over the last twenty years with output and value-add increasing. A concern that needs to be noted is that labour costs have risen sharply since 2007. Part of this is due to the higher average level of skills as semi and unskilled labour is replaced but the increase is disproportionate. Where the productivity of capital is reducing, companies may seek to increase employment but with a disproportionate increase in labour costs this is unlikely to happen and investment in capital is likely to continue. Engagements with stakeholders revealed the following projects that are likely to impact on demand in the future: For the petroleum sub sector in KwaZulu Natal, pipeline projects such as the Transnet Multi Product Pipeline will place a significant premium on engineering skills in the professional occupational category. In the Western Cape, there was concern that project Mthombo (Petroleum South Africa’s initiative to build a world class crude refinery project) would culminate in an exodus of key skills in the engineering and artisan fields from the Western Cape. A joint venture to manufacture Active Pharmaceutical Ingredients for Antiretrovirals in South Africa Designated Trades The CHIETA has 9 designated artisan trades that have been allocated to it, and for which they are responsible for. These are: Boilermaker (Metal Fabricator), Diesel Mechanic, Electrician, Fitter, Instrument Mechanician, Motor Mechanic, Rigger, Turner and Welder. Based on the 2011 WSPs, a total of 3,835 employees are employed in occupations directly related to these trades. The occupations are almost exclusively male with females accounting for only 3% of posts. African males are the single biggest group making up 47% of employees followed closely by white males making up a further 37%. Scarce and Critical Skills While each of the subsectors have varying and often unique skills requirements, the drivers are overlapping and represent a potential synergy in terms of the interventions required to overcome them. a. Company Specific Drivers of Scarcity are where companies report difficulties in filling posts but no real scarcity exists in the labour market. These factors include geographic location, unattractive remuneration packages and ineffective recruitment policies. b. Poor quality of graduates was identified as a major driver of scarcity in that the graduates being produced by educational institutions are not matching the skills demanded by the sector. Executive Summary iv Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 c. Lack of information on career opportunities for learners. A driver of scarcity that was repeatedly mentioned for occupations from nearly all the major groupings in the OFO was that learners are not aware of the majority of career options in the economy and thus do not follow the required learning paths that lead them to the scarce occupations. d. Subsector specialists. Each subsector has a small number of employees that have a specialisation in a given field relevant to that specific subsector. The demand in these occupations (both scarce and critical depending on the nature of the specialisation) is usually very low but represent an important aspect of the business. e. Lack of succession planning. Often an occupation requires a very high level of company specific knowledge that excludes applicants from the general labour market. Therefore, for each such occupation, a pipeline needs to be established that is moving prospective employees through an identified career pathway; in effect creating a company specific supply chain for company specific demand. f. New Skills. The ever changing modern environment requires companies to adapt in order to remain competitive. These adaptations will often require variations in the skills demanded in specific occupations or even whole new occupations to be created. In such cases scarcity is to be expected as providers have not yet been able to construct programmes and standards to train workers. The following occupations were identified as having the most noted scarcity in absolute terms. In other words, drivers of scarcity aside, there are simply not enough qualified workers to meet the demand in these occupations: Pharmacists and related occupations, engineers, artisans and other sector specific occupations such as tinters, flavourists and glaziers. Critical Skills Critical skills are somewhat more difficult to identify as the gaps in competency within the labour force are likely to cover a very wide variety of competencies in almost as many occupations. Examples of where critical skills are currently found or are likely to be found in the future include: Sector specific knowledge for sales representatives, skills relating to new technology or new machinery, soft skills and emerging requirements of green legislation. 4. Provision and Supply of skills The analysis of supply examines the output of various learning channels available to workers, unemployed people, and newly qualified youngsters entering the labour market for the first time. The skills required by the chemicals industries are grounded in the natural sciences, most notably chemistry. The pipeline for the supply of skills to the sector thus includes schools, colleges, universities of technology, universities, and training offered by employers in the workplace. Successive ministers of education have attempted to increase continuously the number of pupils learning and passing mathematics and sciences in high school. However, the education system has been slow to generate the critical mass of students who successfully sit for these subjects. Well below half of the pupils who sat for mathematics and sciences got a mark above 40%. Clearly, unless these numbers can be boosted significantly, the pool of students able to pursue engineering and related qualifications required by the chemicals industries will remain limited. The workforce of the chemical industries is concentrated in the Trades and Technicians, and Machine Operators and Drivers occupational categories. Training and development for these occupations principally occurs at FET colleges (and to some extent Universities of Technology). A Executive Summary v Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 comprehensive report was prepared by the Department of Higher Education and Training in 2009 on FET colleges and the pattern that emerges is worrying. Overall, the pass rates for most subjects are well below 50%, with few exceptions. The National Certificates (Vocational) have been introduced to replace the traditional National Certificates, with a view to broadening the scope of coverage beyond the trades and related occupations. At present, the available range of NC(V) qualifications relevant to the needs of the chemical industries is very limited, and much more capacity exists for the delivery of the old National Certificates. Furthermore, public providers indicated that employers understand and prefer the old qualifications over the new ones, thus learners emerging from college with NC(V) experience greater difficulty finding employment. Enrolment in higher education institutions has been steadily increasing over the years. Throughput rates however, also reflect relatively high attrition rates. Only a small proportion of students who enter a programme complete the requirements for their qualification within the scheduled timeframe – meaning the throughput is inefficient. The chemical industries draw on the general pool of graduates who pursue SET qualifications. A key drive has been to encourage and support more black students into these fields. The main challenge in this regard however is that the vast majority of black students still attend schools with limited capacity to teach maths and science at a level that will enable students to pursue those subjects at tertiary level. The irony is that, bursaries set aside specifically for these subjects are more likely to benefit white students, who generally attend better schools and are thus able to meet the entry requirements of tertiary education institutions. Employers receive grants each year when they submit workplace skills plans and training reports of training offered to workers in the previous year. For the period 2010-1011, 141,919 learning opportunities were available to workers within the sector. These ranged from mentorship and skills programmes to full qualifications. In addition, 13513 unemployed learners were supported, of which 419 were pursuing tertiary qualifications. The SETA met with public providers and selected industry representatives during the course of consultations to continue the dialogue on ways to partner on the skills development agenda going forward. Proposals have begun to emerge on ways in which such partnerships can be given effect. Key principles that will guide the models to be adopted include: Partnerships should be defined by the needs of the sub-sectors; one format may not fit the needs of all, therefore each model should be guided by the context within which it is operating. Roles should be well defined and documented to ensure transparency and accountability on commitments made Formal agreements should be in place that define the scope, funding, timeframes, and roles the partnership model Both public and private partners can be involved in such partnerships CHIETA to be the champion of such partnerships to ensure they remain active and sustainable Executive Summary vi Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 CHAPTER 1. CONTEXT 1.1 Purpose of SSP In terms of the Skills Development Act, the Chemical Industries Sector Education and Training Authority (CHIETA) is required to prepare a Sector Skills Plan (SSP) every five years within the framework of the National Skills Development Strategy (NSDS). The SSP report is aimed at identifying: The skills needs of industry / economic sectors (skills shortages, skills gaps and skills supply) based on the standard industrial classification codes allocated to each individual SETA by the Minister in the SETA establishment and re-certification process; Possibilities and constraints in the effective utilisation and development of skills in relation to government’s priorities and the objectives of the HRDS, the NSDS, Provincial Growth and Development Strategies (including major projects) and relevant industry / economic strategies. In order to fulfil this function, SETAs collect information, research sector labour market trends and analyse national and provincial growth and development strategies. 1.2 National Skills Development Strategy III The 3rd National Skills Development Strategy further advances the drive for bringing alignment between the supply and demand for labour in the SA labour market. It represents an explicit commitment to encouraging the linking of skills development to career paths, career development and promoting sustainable employment and in-work progression. The key elements of the strategy are presented below (The full framework document can be obtained from the Department of Higher Education and Training): NSDS III seeks to contribute to the achievement of the country’s new economic growth and social development goals that are embodied in the Medium Term Strategic Framework (MTSF). The MTSFs priorities are listed as: 1. Improved quality of basic education 2. A long and healthy life for all south Africans 3. All people in South Africa are and feel safe 4. Decent employment through inclusive economic growth 5. A skilled and capable workforce to support an inclusive growth path 6. An efficient, competitive, responsive economic infrastructure network 7. Vibrant, sustainable rural communities with food security for all 8. Sustainable human settlements and improved quality of household life. 9. A responsive, accountable, effective and efficient local government system 10. Environmental assets and natural resources that are well protected and continually enhanced 11. Create a better South Africa and contribute to a better and safer Africa and World 12. An efficient, effective and development oriented public service and an empowered fair and inclusive citizenship The DHET and SETAs are collectively responsible for delivering on the fifth priority. The initiatives and interventions that will respond to the following pressing challenges: Context 1 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Inadequate skills levels and work readiness of graduates entering the workforce. Lack of literacy and numeracy of the long term unemployed Skills shortages in artisanal, technical and professional fields Over emphasis on NQF level 1-3 without sufficient progression towards more intermediate and high level skills Failure of businesses to equip workforce to adapt to changes in economy as it becomes more knowledge based. Systemic blockages in the provision of skills Absence of coherent strategies within industries Urban bias of our development To address these issues, the NSDS III will be guided by and measured against the following 7 developmental and transformation imperatives. These are: Race, Class, Gender, Geography, Age, Disability and the HIV / AIDS pandemic. 1.2.1 Goals of the NSDS The strategy places greater emphasis on relevance, quality and sustainability of skills training programmes to ensure that they impact positively on poverty reduction and inequality. It focuses on the following goals, each of which is attached to outcomes and outputs that will be the basis for monitoring and evaluation of the NSDS implementation and impact. 18.104.22.168 Establishing a creditable institutional mechanism for skills planning The SETAs will fill the current information gap in terms of credible information and analysis on the supply and demand of skills 22.214.171.124 Increase access to occupationally directed programmes There is a need to develop intermediate and high level skills in order to remain competitive as a knowledge economy. There is a strong focus in NSDS III on artisanal skills as the workforce is currently not keeping up with the demands of the economy. In terms of high level skills, access remains a key challenge. This is to be addressed through the PIVOTAL grant that has been incorporated into NSDS III. 126.96.36.199 Promoting the growth of a public FET college system that is responsive to sector, local, regional and national skills needs and priorities. The public FET college system is central to the government’s programmes of skilling and re- skilling the youth and adults. Since 2007 the focus on FET colleges has intensified but a number of challenges still remain. The NSDS III therefore aims to support and assist these institutions to build capacity and move them to the forefront of skills development in South Africa. 188.8.131.52 Addressing the low level of youth and adult language and numeracy skills to enable additional training There is a large group of youths that are unemployed and are not participating in education or training and will find it very difficult to participate productively in the economy. DHET will Context 2 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 establish institutional frameworks and programmes that will raise the education base of these young people and enable them to take on further education and/or employment. 184.108.40.206 Encouraging better use of workplace-skills development There is a call for increased workplace based learning as the lack of productivity is said to be due to inadequate training for those already in the labour market. Through the mandatory and discretionary grants, employers will be encouraged to train existing workers. 220.127.116.11 Encouraging and supporting cooperatives, small enterprises, worker intitiated, NGO and community training initiatives Skills development is not only about training people for employment but to empower them to create opportunities and make a living for themselves. The NSDS II must support the training needs of the cooperatives, small businesses (through SEDA), unions and other community based NGOs. 18.104.22.168 Increasing public sector capacity for improved service delivery and supporting the building of a developmental state. To achieve the goals of a developmental state, a skilled public sector that is capable to deliver quality services. Therefore SETA plans are based not only on the sectors where they have responsibility but also on the needs of the government departments and entities that are engaged in the sector economic and industrial planning. 22.214.171.124 Building career and vocational guidance There is a lack of guidance to direct young people to programmes for which they have an aptitude and will offer sustainable employment in the labour market. . 1.2.2 Programme Delivery Partners The above mentioned goals cannot be achieved without cooperation and coordination from all key stakeholders including government, SETAs, employers and others. The National Skills Fund (NSF) is to be a ‘catalytic’ fund to drive the skills strategies and meet the needs of the unemployed, non-levy paying cooperatives, NGOs, community structures and vulnerable groups. 1.4 Industrial Structure and Dynamics The chemical industry in South Africa has been shaped by a legacy fostered by a political and regulatory environment which created a philosophy of isolationism and protectionism. This tended to promote an inward approach and a focus on import replacement in the local market resulting in: The building of small-scale plants with capacities geared to local demand, which tended to be uneconomic. Locally processed goods being generally less than competitive in export markets as a consequence of isolation of the industry from international competition in addition to high raw material prices as a result of import tariffs. The building of chemical plants at inland locations close to the coal-based synthetic fuels plants which provided feedstock (raw material for the plants). This strategy was attractive at the time due to the additional benefit of being sited close to the heavily populated Gauteng area which is the largest domestic market. As a result, plants are comparatively smaller than world scale and their cost structures are not highly competitive in export markets, partly because of the high transport costs to coastal ports. However, they are well placed for exports to neighbouring African countries such as Zimbabwe, Namibia and Botswana. Now that South Africa is fully integrated into the global community, chemical companies Context 3 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 are striving to focus on the need to be internationally competitive and the industry is striving to reshape itself accordingly. The chemical industry in South Africa is the largest of its kind in Africa. It is highly complex and widely diversified, with end products often being composed of a number of chemicals that have been combined in some way. The sector dominates manufacturing in South Africa, the coke, petroleum, chemical products, rubber and plastic and the glass and other non-metallic mineral products combined, comprised 23.2% of manufacturing in 2011 (Statistics South Africa). Although the industry remains dominated by local companies, a number of multinationals have local distribution points and several have become involved in local manufacture. The primary and secondary sectors are dominated by Sasol (through Sasol Chemical Industries and Sasol Polymers), AECI and Dow Sentrachem. Some of these companies have recently diversified and expanded their interests in tertiary products, especially those with export potential. Two noticeable characteristics are to be observed about the sector: (i) While its upstream segment is concentrated and well developed, the downstream sector - although diverse - remains underdeveloped; (ii) The synthetic coal and natural gas-based liquid fuels and petrochemicals industry is prominent, with South Africa being the world leader in coal-based synthesis (coal-to-liquid – CTL) and gas-to- liquids (GTL) technologies. The chemical sector is divided into two main segments based on margin and production volume. Generally, commodity chemicals are produced at low margins, but in large quantities. In recent years, fine chemicals have also become commodities, and margins have fallen drastically. Higher margin products include those that are either patent protected or difficult to produce, referred to as designer chemicals (e.g. speciality ceramics and ethical pharmaceuticals) or are complex formulated products sold against a performance specification and hence are difficult to copy (e.g. flavour mixtures and water treatment chemicals, also referred to as speciality chemicals). Figure 1.0.1: Chemical Sector Value Chain Source: DoL (2008) Context 4 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 The chemical sector is its own biggest customer with about 60% of production used in downstream manufacturing within the sector. In the commodity sector, market share is the determining measure and driver for performance. Increased competition from countries with significant competitive advantages such as access to markets and/or raw materials, will force down prices and margins. As a result, global production is moving to lower cost economies. Include global discussion here The industry in South Africa produces roughly only 300 officially registered chemical compounds out of a possible complement of more than 80 000 types of basic or pure chemicals currently manufactured on a commercial basis globally. There has been a concerted effort to make the chemical industry more competitive with the South African Department of Trade and Industry (the DTI) spearheading various Petrochemicals, Plastics and Synthetic Fibres workshops to analyse the problems and opportunities of a sector of the economy which is considered to have great potential for the future, and to develop a way forward. To facilitate the realization of industrial policy goals of increased beneficiation, value addition, exports and employment requires reversal of the historical bias through a specific focus on growing downstream sub-sectors. Thus, according to the Industrial Policy Action Plan (IPAP, 2007), the development of the chemicals sector has two major elements: (1) to promote beneficiation of minerals into primary products for exports and also to provide feedstock into higher value-adding manufacturing activities; and (2) to promote downstream fabrication of polymers, thereby creating more jobs and adding significant value. Further to the above the chemicals sector (plastics, pharmaceuticals and chemicals) is included in IPAP 2 (2010) in Cluster 2 where the focus will be to scale up and broaden interventions in sectors initially identified in IPAP 1. However for planning purposes it is useful to understand the dynamics that may influence the market as these may offer useful indications of factors that may for instance impact upon market growth or may identify potential opportunities or direction for future operations. The following section highlights some of the drivers of change that may impact the sector. 1.3.1 Drivers of Change The PESTEL framework is a useful tool to help understand and categorize the external forces that may drive or influence the market. PESTEL refers to Political, Economic, Social, Technical, Environmental and Legislative factors. 126.96.36.199 Political Issues Political stability has offered an enabling environment for economic development and various government strategies have prioritized the chemical sector for growth and development. These include: The Chemical Sector Development Strategy, the Advanced Manufacturing Technology Strategy (AMTS), the National Industrial Policy Framework (NIPF) and the related Industrial Policy Action Plans (IPAP), the Minerals Beneficiation Strategy managed by the Department of Minerals and Energy (DME) and the 20 year Integrated Resource Plan which states that Nuclear energy will provide 22.6% of the energy mix by 2030. These strategies or programmes endeavour to give existing and potential investors in the chemicals sector some confidence on the strategic direction Government is taking thus making it easier for them to align their activities. The programmes (individually and/or collectively) seek to facilitate and expand beneficiation, exports and employment within the sector and also aim to highlight issues regarding investment, skills development, broad-based black economic empowerment (BBBEE) and small, medium-sized, and microenterprises (SMMEs) . However, it was the opinion of a number of stakeholders that there is a growing element of uncertainty challenging the stability that has been in place for the last decade Context 5 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 and a half. Talks of nationalisation and various labour reforms present an uncertain risk to the future of the sector. The most relevant policy affecting the skills of the chemical sector is the National Skills Development Strategy and its associated legislation. The purpose and key objectives of the NSDS III is detailed in section 1.2 and if effectively implemented by the relevant SETAs, it has the potential to materially impact on the sector. Feedback from stakeholders indicate that where companies are actively engaging with the SETAs (CHIETA in this case), the benefits are reaching further than even the drafters of the strategy could have envisioned. For example, a CHIETA stakeholder commented that by virtue of the process of aligning their posts with the Organising Framework of Occupations (OFO), they were able to gain clarity and better articulate what the function of each post actually is. This improvement was considered so useful that the company, a multi-national, attempted to implement the same process in the other countries where it has a presence. Unfortunately the number of firms engaging with the SETAs to this degree is relatively low when compared with the total number of levy paying companies. Anecdotal evidence suggests that a large number of companies just do not understand the NSDS and its goals and see the Skills Development Levy (SDL) as a pure tax. As a result they either write it off as a tax or engage with the SETAs on the most superficial level, complying with the WSP requirements in order to get a mandatory grant payment. The implication of this is that a large proportion of the sector is not embracing the spirit of the NSDS to their own detriment. On the other hand, as the knowledge of SETA initiatives grow and companies understand and embrace what is trying to be achieved, then significant strides forward can be made. Another trend that was prevalent during stakeholder consultations was that the information regarding the various initiatives by government and the SETA was not effectively diffusing through the sector. It was acknowledged that government, through the various line departments, are actively working towards building the sector but there was feeling that these initiatives were not being effectively communicated to those elements of the sector that could actually take advantage of them. These questions involved access to incentives and the bureaucracy surrounding them. This extends beyond financial incentives and direct initiatives. For example each SETA creates a scarce skills list which is combined into a global list. This information could be used by students choosing subjects or university applicants if the information was to filter down to that level. Finally, there are regional and global political factors that can have an impact on the local chemical sector. For example, regional instability in Zimbabwe affects export sales of fertilisers and globally effect on profits and investment decisions and may lead to loss of jobs and political unrest and tension in regions where the country sources crude oil usually leads to price increases of crude oil which has a negative impact on the sector. 188.8.131.52 Economic Issues The global recession directly impacted the chemical sector with curbed demand for explosives and chemicals, resulting in reduced sales volumes (CHIETA PESTEL Questionnaire, 2010). However, the sector is recovering well globally. The local sector has seen a 6% growth in output from 2009 to 2010 (Quantec 2011) and an even more positive jump in their European counterparts with a year on year increase of 7% in January 2011 (ECIC 2011). The greatest economic issue raised by stakeholders was that of international competitiveness. The international literature is almost unanimous in predicting the further globalisation of the chemical sector (Patel 2008, MCE 2010, Deloitte 2010). What this means is that economic and political integration will continue, requiring the chemical sector to compete globally. In addition, the distribution of markets will change as growth markets in developing economies begin to represent a higher proportion of global consumption. This represents both an opportunity and a threat to the future of the South African chemical sector depending on the level of international competitiveness. Context 6 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Stakeholders were not optimistic regarding the local market’s ability to be globally competitive. Reasons that were given included: a strong rand, aging infrastructure (particularly rail), increasing costs of raw materials, increasing labour costs and other social factors such as crime and corruption. ‘The availability of cheap imports’ was mentioned repeatedly by stakeholders as an ongoing threat to the local market, further reinforcing the perception of a lack of competitiveness. The Chemicals Sector Expert Advisory Committee (CSEAC) has previously raised concerns about the deficiency of South Africa’s rail infrastructure (Engineering News, 2010). The committee suggested that most chemical companies would prefer to transport chemicals through State-owned transport utility Transnet; however the utility does not have customised wagons suitable to transport some chemicals. Unfortunately, the alternative is road transportation, which exposes chemical companies to another set of challenges. Road transport is more expensive and has higher risks especially when considering the number of chemicals having to be transported by road. Although a number of discussions between industry representatives and Transnet have reportedly been held, as yet no resolution to this challenge has been publicly proposed. The downscaling of the mining industry is also negatively impacting the explosives sector. Companies aim to deliver more value by enhancing the safety and improving on the reliability of their products coupled with service delivery excellence. The above points notwithstanding, there are a number of large scale current and future projects that will have a material impact on the sector. These include: the expansion of Sasol Wax, the Coega Refinery project, the Transnet pipeline, continued government infrastructure projects and possible desalination projects (DoL, 2008). These will require additional skills and given that companies draw from the same skills pool this may result in the migration of skills from one region to another. (CHIETA PESTEL Questionnaire, 2010). The economic and trade context and its relationship to employment and skills is examined in more detail in section 1.4 below. 184.108.40.206 Social Issues The major social issues in the chemical sector reflect the major issues in South African society. They are: unemployment, HIV/AIDS and crime. The chemical sector has been shedding jobs consistently over the last 15 years. Total employment has shrunk by roughly 80,000 jobs from 250,000 in 1995 to 170,000 in 2010 which translates to a 32% reduction. This is not a phenomenon unique to South Africa but rather a reflection of how the global market is evolving. The European sector has shrunk similarly from a base of 1.587 million people in 1995 to 1.15million in 2010 (ECIC 2011). Those 437,000 lost jobs represent a 28% reduction in employment. The biggest driver of this structural change in the sector is the implementation of process automation. Technology is constantly evolving such that efficiencies are being created by automating processes that were once labour intensive. While the rate of job losses in the South African market has slowed (most likely due to the largest investments already having been made), this is a trend that shows no sign of reversing in the future. Therefore, unless the sector can increase global market share, become competitive in new markets or create entirely new growth markets, the sector will be unlikely to contribute significantly towards eliminating the high national unemployment rate. HIV / AIDS has had an adverse effect on the sector; the disease has resulted in increased absenteeism, reduced productivity and the loss of skills where workers have succumbed to the Context 7 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 disease. Firms have had to incur increased recruitment costs to replace staff, make additional investments in upskilling and multiskilling existing staff, and cope with increased overtime claims (CHIETA PESTEL Questionnaire, 2010). Further, the SAPIA has indicated that AIDS has affected tanker drivers who work in the logistics value chain area culminating in an acute shortage as these lost skills are not readily available in the market. SETAs have attempted to address HIV/AIDS through the provision of conditional grants for HIV/AIDS related training. The CHIETA has established a training and intervention programme in 150 of its registered companies (The Redpeg initiative), recognizing that learnerships may be at risk as training and replacement cost of HIV positive learners escalates and as training expenditure on learnerships, may decline, given the risk of losing such investments. The purpose of this initiative was to establish the potential impact of HIV/AIDS within the sector and to advise on strategies to mitigate this impact. Funded by CHIETA, it entailed an elaborate skills transfer strategy in which stakeholder organisations were consulted while concurrently facilitating a skills transfer to at least one employee (normally the HR manager) per workplace. The project culminated in the development of guidelines for the management of the impact of HIV/AIDS across the chemicals sector and the qualification of participants against all existing HIV related unit standards (part qualifications). The consequences of the scourge of crime have been adversely felt by the sector through theft of essential equipment, and stocks of finished products. This has led to the disruption of services and the dismissal of culpable employees resulting in the loss of skills. In addition firms have had to resort to the services of expensive forensic specialists (sometimes from abroad as this is a scarce skill in South Africa) and crime prevention and safety experts (CHIETA PESTEL Questionnaire, 2010). Due to the fear of crime, employees are sometimes reluctant to work late shifts, thus sometimes firms are forced to operate weekend shifts when they have increased demand (e.g. to service a tender). Added overtime costs become unattractive for the firms to operate (CHIETA PESTEL Questionnaire, 2010). 220.127.116.11 Technological Issues Along with the globalisation of markets, one of the greater drivers of change over the next 2 decades will be advances in technology. Historically, the chemical sector has been relatively more skills intensive and research driven compared with the manufacturing as a whole (Patel 2008). Therefore, as the globalisation of markets progresses, the ability of local markets to maintain proximity to the technological frontier becomes increasingly important. The skills implication of this continuing technological development is that the skills mix of the sector will continue to skew towards the middle and high level skills. Changes in the technological environment are likely to create new markets (innovations), create production efficiencies (competitiveness) and assist in complying with forthcoming environmental regulations; all of which are key to the success of the local chemical sector in the future. Patel (2008) details a number of factors that heavily influence both the investment in R&D and the effectiveness of that research. Of particular relevance are the following: Innovation is crucially dependent on the interactions between academic institutions, large established chemical companies, and small specialized engineering firms. Universities and other public research organisations provide basic research knowledge and training while small innovative firms develop product innovations as well as provide specialised engineering services critical for process innovation and diffusion. In-house R&D by large firms is an essential component, generating the absorptive capacity needed to exploit the knowledge and products emerging from a range of external sources of innovative ideas. Context 8 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Chapter 4 details a proposed partnership model being used by the University of Johannesburg that is a good example of this. In terms of the relationship between performance and characteristics of the national innovation system, the study shows that a high level of innovation in the Chemical industry is strongly associated with two dimensions of the knowledge base: R&D intensity and skills. o In general the intensity of the chemical sector’s R&D levels is low (except for Sasol) compared to the rest of the world, and this is not likely to change in the near future. Patel (2008) indicates that the positive effects of competition on R&D investment decline when a given country is away from the technological frontier. Feedback from the industry workshops suggest that South Africa is indeed far away from the technological frontier (with a few exceptions) and thus R&D requires a much greater investment in order to bring suitable returns. o One of the key underlying factors influencing innovation performance is the level of skills in an economy. Markets need to accumulate skills especially in relation to intermediate level technical skills and high-level skills, i.e. professionals and managers with tertiary education, which are extremely important for R&D and innovation. According to the dti publication ‘The Chemicals Industry Sector’, scientific and technological skills are a crucial limiting factor to future technological growth. Thus, in order to improve competitiveness in the future, there needs to be an increased focus on high level skills development. Countries with a high level of innovation performance in the industry are also likely to have the following characteristics: firms with a high level of international orientation, a high level of participation of technologically active foreign firms in the domestic industry, and those with higher than average intensity of cooperation with universities. A good example of the point can be seen in the pharmaceutical industry. The technology and background for generic pharmaceutical products are currently imported, whereas if sufficiently skilled expertise were available locally generic drugs and new forms of delivery of drugs could up to some level be locally developed. This is an area that has received much attention from the DTI over the last few years and the near future will see the establishment of a joint venture between a local and an international firm in order to manufacture the Active Pharmaceutical Ingredients used in the formulation of Antiretrovirals . Besides the direct impact of jobs being created, the skills base in the South African sector will be moving towards the technological frontier. This (in conjunction with other initiatives) is likely to create spin-off opportunities in the future. Also, 18.104.22.168 Environmental Issues Environmental concerns are a key factor in the development of the chemicals sector (South African Info 2008). South Africa has adopted first-world standards in its environmental policies, introducing regulations to promote co-operative environmental management and providing guidelines for the disposal of hazardous waste. Export orientated sectors are becoming increasingly aware of the potential barriers which inadequate environmental standards present to trade and are seeking to improve environmental performance. Context 9 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Chemical products have a twofold effect on greenhouse gas emissions (GHGs). These gases are emitted during the manufacture of chemical products, whilst at the same time the use of many of these products enables significant reduction in global emissions (CAIA, 2009). The emissions reduction enabled by the use of these products can often exceed the amount of GHGs emitted during their production. In line with Responsible Care principles, the chemical industry recognises its responsibility to contribute to efforts to mitigate climate change. The Department of Environmental Affairs compiled an enabling document for all SETAs as an input to the SSP process. The input to the chemical sector included the following key points: Resource sustainability. Many subsectors of the chemical sector make use of non-renewable natural resources. Ensuring sustainable availability and consumption of natural resources will be an ever increasing influence on the sector. Specific skills will be needed to manage access and consumption processes affecting these resources as well as the strategic planning and impact reduction skills to optimise the extracted resourced. In addition, diminishing fresh water supplies have led to increasing pressure on large-scale water users in the chemicals, plastics and pharmaceutical sectors. More stringent regulatory limits on the discharge of organic compounds make compliance more difficult and costly to achieve with conventional treatment processes. Cleaner production. Skills will be required for developing and implementing cleaner production cycles. Recycling and carbon emission reduction. Skills associated carbon emissions and recycling integrate with scarce resource procurement and management especially linked to resources such as clean water, coal and natural gasses. In this regard, and in line with the KYOTO protocol the department has committed itself to reduce total CO2 emissions by 34% by 2020 and by 42% by 2030. The industry’s goals in this regard are to reduce its own emissions by improving its processes and to encourage the use of chemical products that create a net emission reduction along the value chain and the identification of carbon footprints will become increasingly important within this sector. In addition, the department commits to the attainment of 50% to 80% of households with basic waste and disposal facilities and 25% of municipal waste gets diverted from landfill sites for recycling by 2012. To this end, the glass sub sector2 (in the form of the PG Group) is engaged in the recycling of cullet (recycled glass). Recycling of cullet benefits the environment in that it supplements raw material, saves energy through lower melting temperatures, conserves landfill space thus benefitting the lifespan of the site, reduces litter, is linked to job creation (stakeholders in glass recycling have invested in 1 200 bottle banks in urban towns to assist in domestic recoveries) and has educational value as the importance of recycling and caring for the environment filters to consumers (Consol). The larger enterprises in the chemical industry seem to be aware of environmental commitments, however there needs to be focused environmental awareness campaigns targeting smaller concerns. Green brands. Demand side pressure on the environmentally friendliness of products from the consumers will continue to have an effect on manufacturers (particularly within the FMCG subsector). 2 The environmental initiatives of the PG group is appended to this document as Appendix A. Context 10 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Green jobs. A critical aspect of challenges for the green economy is the general lack of skills in many sectors in South Africa, and in particular the lack of Engineers, Technicians and Health and Safety Practitioners will be essential in transitioning to a greener economy. According to the SAPIA, the petroleum industry needs skilled employees and new entrants who understand, are competent and are trained in future fuels, environmental issues and waste management3. The green economy summit held in May 2010 resolved that one of the elements of the green economy plan would be to define the job creation potential and protection of a green economy growth path and the associated skills requirements (DEA 2010 et al). Sustainability reporting. Global reporting standards have increasingly integrated sustainability practices into their criteria for best practice for example, the JSE’s Socially Responsible Investment (SRI) Index. In terms of specific sectors, the Green Economy Summit considered the diversification of renewable resources by looking at nuclear energy. Despite the problems associated with the disposal of nuclear waste, the summit acknowledged that it was carbon free and should be given more attention. The minister of Energy announced in her budget speech of 26th May 2011 that nuclear energy is part of the Integrated Resource plan and will make up 22.6% of energy generation by 2030. Finally, the Department of Energy is to adopt a short term focus (5 year pilot) to achieve a 2% penetration level of biofuels in the national liquid fuel supply, or 400 million litres pa. The target was been revised down from the 4.5% target that was initially proposed in the draft Strategy document. The following crops are proposed for the production of biofuels in the country: for Bioethanol, sugar cane and sugar beet and for Biodiesel sunflower, canola and soya beans. The exclusion of other crops and plants such as maize and Jatropha is based on the food security concerns. Further research is still needed to test usability of these in the country (Biofuels Strategy 2007). 22.214.171.124 Legislative Issues A number of government initiatives to improve environmental performance, have recently been introduced or are imminent. This will have a significant financial impact on the integrated synthetic fuel/chemical industry value chain. For instance the synthetic fuels value chain faces a significant number of regulatory challenges. Examples include the recently released Consumer Protection Act, which includes duplicate provisions for the management of hazardous substances, including chemicals; the Air Quality Act, under which one of the synthetic fuel sites is included in a scheduled hotspot area, which requires the development of an air quality management framework. In addition, implementation of the Environmental Impact Assessment regulations are placing increasingly stringent conditions on applicants, which are not related to demonstrated risks. Furthermore, compliance with water resource management requirements are increasingly demanding with the resultant costs (CHIETA PESTEL Questionnaire, 2010). Pending legislation on e.g. clean fuels and labour broking if enacted may lead to additional challenges for the sector. Firms will have to invest in new plants that incorporate new technology which may require upgrades in systems which in turn will require an upgrade of skills for operators for instance in the petroleum subsector. Firms that rely heavily on tenders are likely to be affected 3 The SAPIA environmental input is appended as Annexure B. Context 11 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 by the outlawing of labour brokers as their labour requirements fluctuate according to need. Concerns have also been raised in reference to the proposed National Health Insurance Act because of the need for affordable medication which could lead to company closures and job losses (CHIETA PESTEL Questionnaire, 2010). However the intended implementation of the National Health Insurance Scheme (NHIS) in which one of the founding principles is universal health coverage is likely to have implications for the broadening of access to antiretrovirals (ARVs). Furthermore globalisation will continue to impact the sector with an increasing number of Free Trade Agreements coming into place, however regulatory compliance issues may hinder access to particular markets. Environmental issues in particular are becoming significant conditions for market access coupled with a greater understanding and requirement of Life Cycle Analysis resulting in cleaner production as well as the use of renewable resources. To remain competitive companies will have to comply and adhere to generally stricter regulatory trends that may for instance favour one product or technology over another (e.g. emissions or the thickness of plastic bags). Companies are increasingly exploiting their intellectual property in addition to the sale of products and services. The ability to capture, share and use ideas or information generated within the business will increase (DoL, 2008). In reference to the safe handling and transit of chemicals legislation takes the ‘polluters beware’ line, i.e. full responsibility for the safe handling and transit of chemicals rests with the supplier. The Act also stipulates that, “a supplier should not provide chemicals to a client unless the client has met the requirements for the safe collection, transport and housing of the chemicals.” Therefore contracts that are entered into between suppliers and clients must be guided by professionals who understand the risk being undertaken (Alexander Forbes, 2010). There are key intellectual property issues that are raising concerns especially within the pharmaceutical industry (the dti, 2009). These include clarification of the “grey area” between the SA patent law and the competition law and clarifying the rules on data exclusivity (terms of protection of confidential data in the clinical dossier submitted for registration) and the need to establish communication channels between the SA patents’ office and the Medicines Regulatory Authority office, to prevent issuing market authorization for generic medicines before patent expiry or without valid licence. These factors have an adverse impact on investment on R & D and generics. In addition delays in regulatory approval and / or registration of medicines in SA (delays ranging from 18 months to 3 years, vis-à-vis the EU and the USA) is affecting both the R&D-based industry (which is losing 1½ to 3 years of sales before patent expiry) and generics (due to delayed entry of generic copies). Employment equity considerations continue to impact the sector, as education institutions are not meeting the demand requirements for the sector. (CHIETA PESTEL Questionnaire, 2010). All companies in every CHIETA subsector are required to comply with the BBBEE Codes. Skills development as envisaged in NSDS III can be used as a lever for transformation for most of the seven BBBEE elements, particularly Management Control, Employment Equity, Skills Development, Enterprise Development, and Socio-Economic Development. In addition to reporting annually on the BBBEE scorecard, the Petroleum Sector is also governed by compliance to the Petroleum and Liquid Fuels Charter. The Petroleum and Liquid Fuels Charter is currently being reviewed with the intention to determine the way forward beyond 2010. For the South African chemical industry to develop and compete effectively, and take advantage of growing international markets, enterprises need to constantly upgrade their production and organisational methods, tap opportunities to specialise, exploit economies of scale and scope, forge Context 12 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 domestic and international linkages and networks, improve worker skills, access appropriate technologies, and adopt new marketing strategies. Context 13 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Chapter 2. Sector Profile 2.1 Industrial and Occupational Coverage 2.1.1 Summary Profile of Industrial Activities Economists view the manufacturing sector as being at the forefront of an economy that is ascending the development ladder, taking it to higher levels of sophistication and efficiency. Gains in the manufacturing sector generally extend rapidly to other economic sectors, resulting in the balanced development of the economy as a whole. Manufacturing is a significant sector within South Africa economy, according to the IDC it contributed 17.2% to nominal GDP in the second quarter of 2009, whilst employing approximately 1.735 million people in 2011, equivalent to 13.2% of the total labour force (QLFS 2011). However, in the recent past in light of the global economic downturn the manufacturing sector has suffered reduced demand resulting in the global recession. The chemical sector is integral to practically every other sector of the economy, and as such the overall performance of the global economy has a massive impact on the performance of the chemical sector, and vice versa. The chemicals industry plays an anchoring role by supplying a multiplicity of locally and internationally sourced chemicals to diverse industries. Products of the chemicals and metals sectors are the basis for almost every manufacturing activity. In 2011 the Chemical manufacturing sector contributed 23.2% of manufacturing (StatsSA 2011). The best estimation of total employment for the sector is roughly 170,540,000 people in both the formal and informal economies (Quantec 2011).4 Given its broad overall influence on the economy, the chemical industry in South Africa has been identified by the government as one of the key drivers of economic growth. The IPAP (2007) states that the Chemical Sector is a crucial industry from the perspective of South Africa’s growth path for advancing its socio-economic development objectives. It can be classified into the following five broad categories5: Liquid fuels production, i.e. petroleum, diesel, etc. Synthesis, i.e. primary and secondary chemicals manufacturing such as commodity organic and inorganic chemicals, primary polymers and rubbers, and fine chemicals. Formulation i.e. chemical-containing products manufacturing, e.g. consumer products (household, cleaning, cosmetics, toiletries), pharmaceuticals, bulk products (explosives, fertilisers), specialty chemicals (paints, coatings, inks, adhesives, agricultural chemicals, etc.). Conversion i.e. plastic & rubber conversion (excluded from the CHIETA). Glass manufacturing from chemical raw materials such as soda ash, and glass conversion that includes cutting, blowing, etc. The Chemical Industries Education and Training Authority (CHIETA) currently incorporates the chemical and glass manufacturing sectors. The chemical industry consists of various sub-sectors as described below, while the glass industry consists of glass manufacturing from chemical raw materials as well as glass conversion. The CHIETA has five (5) chambers incorporating nine (9) sub- sectors. These sub-sectors are reconciled with the dti’s strategic sub-sectors in Table 2.1 below: 4 This an approximation as it is based on SIC codes 331 – 336 and 341 – 342, within which some subsectors do not fall under the CHIETA while excluding some SIC codes for instance 87140 (fuel research). 5 SETA demarcation does not always correspond neatly with the standard industrial classifications; hence not all industries that fall under the traditional umbrella of chemicals are included in the SETA’s mandate. Sector Profile 14 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Table 2.1: The CHIETA Chambers reconciled with the dti’s Strategic sub-sectors CHIETA Chambers CHIETA Sub-sectors The dti’s Strategic Sub-sectors Petroleum and Base Petroleum Liquid Fuels and Associated Products Chemicals Base Chemicals Commodity Organic Chemicals Primary Polymers and Rubbers Commodity Inorganic Chemicals Fine Chemicals Fast Moving Consumer Fast Moving Consumer Goods Consumer Formulated Chemicals Goods and Pharmaceuticals Pharmaceuticals Pharmaceuticals Explosives and Fertilisers Explosives Bulk Formulated Chemicals Fertilisers Speciality Chemicals and Speciality Chemicals Speciality and Functional Chemicals Surface Coatings Surface Coatings Glass Glass Not part of the Chemical Industry 2.1.2 Chamber Breakdown and Description Base Chemical & Petroleum Liquid fuels include all liquid and gaseous products derived from mineral sources such as crude oil, coal, natural gas, biomass and other sources, and are exclusively used in energy applications. Also included are all forms of lubricants and greases. Major product types include petrol, diesel, jet fuel, illuminating paraffin, fuel oil, liquefied petroleum gas (LPG), bitumen, lubricating base oils (mineral) and blended lubricants and greases. Base Chemicals include all products that are manufactured by means of polymerisation synthesis into a primary form (e.g. beads), ready to be converted by means of mechanical or thermo- mechanical processes into fabricated plastic and rubber products. A basic or primary organic chemical is the first point at which a substance exists as an isolated and reasonably pure chemical. Before this stage, it will have been present in a raw material such as coal, petroleum, or will have been a component of a mixture such as a refinery gas stream. These chemicals are typically large, e.g. volume consumption, multiple application and generally below 3 USD per kilogram (kg). It includes those products generally referred to as petrochemicals. Organic Intermediate Chemicals and Solvents are chemicals for which a definite chemical precursor can be identified. In addition, most of the supply of an intermediate chemical will undergo further chemical reaction (transformation) to produce a variety of other chemicals. Inorganic chemicals are those products most often produced from metallic and non-metallic minerals, which have commercial properties indicating typically large consumption volumes, multiple application areas, and relatively low market prices (e.g. below 3 USD per kg). Although some inorganic chemicals are used to manufacture other chemicals, the description among basic, intermediate and end chemicals is much less clear than in the organic chemicals group. Inorganic chemicals are used less as building blocks than as processing aids in the manufacture of both chemical and non-chemical products. Ammonia and its derivatives are discussed in the bulk formulated product sector (fertilisers). Sector Profile 15 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Explosives & Fertilisers Bulk formulated chemicals are formulated products compounded from high volume, commodity based chemicals. This includes mainly fertilisers and explosives. Organic fertilisers that are more specialised and smaller volume products are included under this sub-sector. FMCG & Pharmaceuticals The FMCG sub-sector includes all formulated consumer chemicals such as soaps and cleaning chemicals, as well as cosmetics and toiletries. Excluded are industrial cleaning chemicals that are regarded as speciality chemicals. Formulated pharmaceutical products include all products in final application dosage and form for use in human and animal medicinal applications. Pharmaceutical products are in a separate sub- group due to their highly controlled (registration, manufacturing and distribution) environment, as well as the impact of Government in controlling the major share of the end-use market. The major product categories in terms of product form are: tablets, capsules, liquids, creams, steriles and injectables. The major product categories in terms of therapeutic use include: analgesics, anti- diarrhoeals, anti-microbials, urinary system, gastro-intestinal tract, respiratory system, central nervous system, endocrine system, muscular-skeletal agents, vitamins, tonics and minerals. Speciality Chemicals & Surface Coatings Speciality chemicals are differentiated products where one producer’s product can be distinguished from another producer’s. Prices of these products remain high enough above costs to produce superior profits. Speciality chemicals are generally sold to performance specifications for what they will do rather than to composition specifications for what they contain. There are two main types of speciality chemicals. One based on functionality and the other based on an industry type classification. In the first instance, one functional compound is targeted at many different industries for example, flocculants going into the pulp and paper industry, mining, and water treatment, or biocides going into paints, cosmetics, and oils. In the second instance a range of functional chemicals is packaged to provide a suite of products utilised in a specific industry for example plasticizers, colorants, flame retardants, lubricants, heat stabilizers, organic peroxides, antioxidants, chemical blowing agents, anti-static and UV radiation absorbers and all functional chemical products used as plastic additives. Fine chemicals are specific molecules of high value typically produced in low volumes and sold at prices above 3 USD per kg. Many cost thousands of Rand per kg. Fine chemicals include the active ingredients in drugs, pesticides, dyes, pigments, and photographic products. They are also used as food ingredients, nutritional chemicals and as intermediate purified reagents for further synthesis, especially in pharmaceuticals, agricultural chemicals, dyes, and pigments. Fine chemicals are undifferentiated products that are defined in terms of their chemical structure and are distinguished from speciality (formulated or performance) chemicals, which are differentiated products, typically sold under trade names. Fine chemicals differ from commodity (basic or primary chemicals) and specialities in terms of their technology, management focus, product application, consumer base, technical service, Research & Development (R&D) focus, product differentiation and the volume produced and sold. Fine chemicals can be categorised as end-use products. These, together with other categories of chemicals, are consumed as key ingredients of pharmaceutical, agricultural, photographic products, electronics, flavours & fragrances, and food chemicals and products Glass The glass sector involves the manufacture of sheet and plate glass used in the construction and other industries or for further conversion into products such as glass containers, scientific and Sector Profile 16 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 laboratory glassware, and other glassware. It also includes glass bevelling and silvering, safety glass, and other glass products; excluding glass insulation fittings and the grinding of optical lenses. The manufacture of glass wool is also included. The Standard Industrial Classification (SIC) code coverage for the sector is tabulated below. Table 2.2: Sub-Sectors and corresponding SIC codes for the Chemical Industry Chamber Sub-sector SIC-code Base & Petroleum Base Chemicals 33300 Processing of nuclear fuel Base Chemicals 33410 Manufacture of basic chemicals, except fertilisers and nitrogen compounds Base Chemicals 33430 Manufacture of plastics in primary form and synthetic rubber Base Chemicals 34000 Manufacture of other non- metallic mineral products Base Chemicals 41210 Manufacture of industrial gases in compressed, liquefied or solid forms Petroleum 33200 Petroleum refineries/synthesisers Petroleum 61410 Wholesale trade in solid, liquid and gaseous fuels and related products Petroleum 87140 Industrial research, e.g. fuel research Explosives & Fertilisers Explosives 33592 Manufacture of explosives and pyrotechnic products Fertilisers 11600 Production of organic fertiliser Fertilisers 33420 Manufacture of fertilisers and nitrogen compounds Fertilisers 33421 Manufacture raw materials and chemical compounds used in agriculture FMCG & Pharmaceuticals FMCG 33501 Chemically-based general household and personal care products FMCG 33541 Manufacture of soap and other cleaning compounds FMCG 33543 Manufacture of beauty products Pharmaceuticals 33530 Manufacture of pharmaceuticals, medicinal chemicals and botanical products Speciality Chemicals & Surface Speciality Chemicals 33502 Manufacture, sale and/or Coatings distribution of diversified speciality chemicals for industrial use Speciality Chemicals 36400 Manufacture of accumulators, primary cells and primary batteries Surface Coatings 33520 Manufacture of paints, varnishes and similar coatings, printing ink and mastics Surface Coating 39005 Powder coating Sector Profile 17 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Chamber Sub-sector SIC-code Glass Glass 33100 Manufacture of coke oven products Glass 34110 Manufacture of glass and glass products Glass 34112 Manufacture of glass containers; glass kitchenware and tableware; scientific and laboratory glassware, clock and watch glasses and other glass product n.e.c. Source: CHIETA SSP 2009 Update 2.2 Macroeconomic Context CHIETA purchased time series data for the chemical sector from 1970 until 2010 (Quantec 2011). The purpose of analysing this data is to examine the macroeconomic context and its effect on the skills of the sector. In other words, how do the broad overarching factors within the sector influence employment and skills? Therefore this is not a complete economic analysis but rather a context setting exercise within the broad macroeconomic environment. Data from publically available sources were combined so that the relevant economic and labour related indicators that are used in this report could be calculated. The data is organised by SIC code and does not perfectly match the chambers defined by the SETA. Findings are therefore reported only on the sector level to clarify the context Figure 2.1 Real output, real fixed capital stock, real value added, and employment Source: Quantec 2011 The period from 1990 to 2010 showed consistent growth in the chemicals sector. Output increased notably from R108 billion in 1990 to R286 million in 2010 translated as a 163% real increase in output over the two decades. Similarly, although less markedly, real value added for the chemical sector grew over the same period from R37 billion in 1990 to R66 billion in 2010 (79% real growth). This very positive economic performance did not however translate into increased employment Sector Profile 18 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 opportunities. There was a net loss in jobs over the entire period with total employment remaining relatively stable around the 235,000 mark from 1990-1993 after which the sector began shedding jobs at a rapid rate. By 2002 the sector had contracted by a third to only 156,000 employees before total employment began to recover slightly. Total employment peaked in 2007 at 182,000 people but has subsequently declined again. Not surprisingly, the recovery thus far has taken real output past the previous high of 2008 but employment is still 11% lower than the 2008 level. The falling employment is contrasted by the steady increase in the real value of capital stocks which grew consistently over the two decades. It is clear that through mechanisation, investment in capital was preferred to labour in order to increase output. The fact that real remuneration per employee consistently moved in the opposite direction to total employment shows that the changes in employment were at the lower end of the pay scale. As lower paying jobs are created, the average remuneration falls and the opposite when employment contracts. Thus in the last 2 decades and more than likely for the foreseeable future as well, the most vulnerable employees are and will be the semi and unskilled workers in the sector. Figure 2.2 Employment and real wages 1990 - 2010 Source: Quantec 2011 The year 2009 was one of great change and heralded in the current economic recession. Figures 2.1 and 2.2 show the effect of this with a sharp decline in all variables bar the average remuneration per employee. Output and value add fell as demand globally slowed down. This resulted in severe financial constraints which led to a reduction in investment in capital as well as a reduction in the workforce. Once again, the ongoing reduction in the workforce seems to be most significant in the lower skilled occupations as the said reduction translated into an increase of the average remuneration due to the highly paid, highly skilled workers representing a greater proportion of the workforce Looking forward for the next 5 to 10 years, there is little to suggest that all else equal, the trend of jobless growth will change. In the immediate future, the recovery from the recession is likely to continue the slow growth in output and value add. There will likely be a move to invest in capital stocks to adjust for the underinvestment during the recessionary period. This is especially likely given the current strength of the Rand against the US Dollar making investments in equipment more inviting. On the other hand, since investment in labour has a faster return, it is expected that there will be a brief uptick in employment as companies seek to increase output by increasing the Sector Profile 19 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 workforce. It is possible that these two forces will be balanced by the likelihood that the initial increase in employment will be driven by atypical forms of employment which allow for a more flexible workforce. In the longer term some of these workers will become formal but the greatest investment and thus the primary driver for the growth in output is likely to remain capital. It was mentioned in the PESTEL analysis that the stakeholder consultations revealed a concern over international competitiveness. As can be seen in figure 2.3 above, the sector has been a net importer to an increasing extent since 2004. While imports are significantly affected by the import of ARV medication, exports have been under pressure since 2001. This supports the concerns made by stakeholders and reported under the PESTEL analysis. Figure 2.3 Imports and Exports in the Chemical Sector Source: Quantec (2011) In conclusion, once the economy emerges from the recession, regardless of the scale of economic growth, there is not likely to be the kind of employment growth that the government strategies are demanding / expecting. In order for there to be large scale job creation there will need to be interventions to either stimulate new sub-sectors that require capacity building or incentives that overcome the attractiveness of capital investment. Based on discussions with the dti, the former is to be the preferred medium for job creation. Details at this stage are not available as industry and government are still in discussions but the broad strokes will be highlighted per sub-sector in the demand chapter. 2.3 Summary Profile of Employers The following profile of constituent CHIETA chambers is based on data obtained from the analysis of 2011 Workplace Skills Plans (WSPs) submitted by employers within the sector and relevant sections of the South African Revenue Service (SARS) database of levy paying enterprises. The data indicates that industry has 1,857 active members and in terms of the number of levy paying firms the sector is dominated by the Base chemicals subsector (31%) followed by the Speciality Chemicals (19%) with the smallest subsector being Explosives (0.4%). Sector Profile 20 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 2.4 Levy Paying Firms by Chamber Source: SARS (2011) data The data obtained from SARS indicates that the sector is generally dominated by small and micro- enterprises. However, relative to other sectors the pharmaceuticals subsector appears to have a proportionally higher number of medium and large enterprises. Figure 2.5: Firm Sizes by Chamber Source: SARS (2011) In terms of geographic distribution, by far the most active province in Gauteng with 47% of firms in the sector being based there. This is followed by KwaZulu Natal with 18% of firms and the Western Cape with 16%. Sector Profile 21 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 When looking at the geographical distribution by subsector, as shown in figure 2.10 below, we can see that there is a fair amount of variation across subsectors. Petroleum and Fertilisers for example have 39% and 35% concentration in Gauteng whereas Explosives has 86% concentration. Figure 2.6: Levy Paying Enterprises by Province Source: SARS (2011) 2.4 Profile of the Labour Force The sector profile identifies areas of where interventions can be effected to redress inequalities with regard to race, gender and disability, in order to achieve equitable representation in all occupational categories and levels of employment that broadly reflect the diverse profile of the South African population. The occupational profile of the sector shows again how skills intensive it is. While Plant and Machine Operators and Assemblers is the largest single occupational group representing 21% of workers, the high skilled occupational groups of Managers, Professionals and Technicians / Associated Professionals represent a total of 50% of workers when combined. Sector Profile 22 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 2.7: Gender and Race Profile by Occupation Source: WSP (2011) data In terms of equity, the sector is very much dominated by men with 69% of workers being male and only 31% female. However, while there are fewer female employees in the sector, their occupational breakdown is skewed towards the higher skilled occupations. Not surprisingly, the highest proportion of female workers can be found in the clerical and support occupations (21%) but a full 55% of all females in the sector are either Managers, Professionals or Technician / Associated Professionals. Figure 2.8 Occupation breakdown of Female workers in the Chemical Sector Source: WSP (2011) Sector Profile 23 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 In terms of race, 49% of the sector is African followed by Whites, Coloureds and Indians making up the balance of the workforce with 30%, 11% and 9% respectively. Not surprisingly, while Africans make up half the workforce, the majority of those workers are found in the lower skilled occupations with their white counterparts fulfilling similar positions in the high skilled occupations. One area that is showing positive signs of transformation is that of Technicians / Associate Professionals which almost perfectly reflects the profile of the sector. Figure 2.9 Racial profile of workers by Occupation Source: WSP (2011) The sector has a fairly good age distribution with 40% of workers being younger than 35 years old, 50% aged between 35-55 and 10% over 55. However, only 8% of workers are under the age of 25. Even when one examines the artisan dominated occupational groups of Craft and Related Workers and Plant and Machine Operators, only 7-8% of employees are younger than 25. Anecdotal evidence based on stakeholder consultations suggests that industry is not entirely satisfied with the quality of artisan graduates in general and that they instead end up in somewhat of a bidding war over the more experienced workers. Sector Profile 24 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 2.10 Age profile of the workforce by occupation Source: WSP (2011) According to the 2011 WSP submissions, the target of 2% of employees to be people with disability has been comfortably met. A total of 2,656 disabled workers are currently employed in the sector representing just over 3%. These employees come from all occupational categories with only Service and Sales Workers employing less than 2% disabled workers. Figure 2.12 People with Disabilities by Occupation Source: WSP (2011) Sector Profile 25 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 CHAPTER 3 – DEMAND FOR SKILLS The structure of the skills demanded in the chemical sector has evolved over the last 20 years. While always being a skills and knowledge intensive sector, the increasing investment in technology is reinforcing that principle. It has already been established that there is a global trend of employment contraction in the chemical sector, yet the absolute number of Highly Skilled workers have increased from 21,069 in 1990 to 23,552 in 2010 (Quantec 2011). Given the lower base of total employees, this means that the Highly Skilled portion of the workforce has increased from 8% to 14%. Mid-Level Skills has fallen in absolute numbers from 61,358 to 48,615 but still represents a higher proportion of workers in 2010 than in 1990 (28% in 2010 as compared with 24% in 1990). Semi and Unskilled workers have suffered the brunt of labour replacing investment in the sector with employment falling from 138,791 in 1990 to 80,426 in 2010. Figure 3.1 - Skills Structure of the Chemical Sector 1990-2010 Source: Quantec 2011 The future will see this trend not only continuing but accelerating if the South African sector is to compete globally. In Europe, the chemical sector is the second most skills intensive sector (following ICT) with 50% of all employees having achieved higher education (Patel 2008). Therefore there needs to be a strategic priority placed on high level skills in the future in order to sustain competitiveness. 3.2 WSP and qualitative skills information The trend illustrated by the time series data in Chapter 2 is that the sector is shedding semi and unskilled jobs at a higher rate, thus increasing the proportion of highly skilled employees is supported by the current WSP data. Figure 3.1 below shows that the sector demands workers from all skills levels but is relatively skills intensive with more than half the employees (52%) being employed as either managers, professionals or technicians. The sector includes activities from research, high level process development to manufacturing. Therefore outside of the generic administration skills, the sector demands a high number of professionals (15%), technicians (19%) and artisans / machine operators (26%). As can be expected, the number of labourers and Demand for Skills 26 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 elementary occupations is relatively low with only 12% of employees being classified in those occupations. Figure 3.2 Chemical Sector Skills Demanded by Occupation Source: CHIETA WSP 2011 As mentioned previously, when examining replacement demand, one needs to consider all the reasons that an employee might leave the sector. This would include employment in other sectors, as well as retirement, illness and death. According to the Redpeg (2011) analysis on the impact of HIV/AIDS, the loss of employees due to death and disability in the future will impact on scarce skills in the sector. The average large company will require 5 more people due to death and retirement and 4 more due to loss of productivity. Yet the company profiles demonstrate that skills are scarce and replacing these people will be impacted. HIV/AIDs is a clear driver of scarce skills. The overall summary as shown above (as well as in Chapter 2) reflects the broad movements in the sector but the context in the various subsectors differ notably and thus the skills demanded by chamber is detailed below. 3.2.1 Base Chemicals and Petroleum Chamber Base Chemicals The Base Chemical subsector is even more skills heavy than the sector as a whole. Most notably, it has a higher reliance on Technicians and Associate professionals representing 24% of the subsector but also with a similar proportion of Professionals and Managers to the sector (15% and 13% respectively). It seems that in the Base Chemical subsector that the jobs have migrated away from OFO groups 6 and 7 which include the traditional artisan occupations (23% combined) to the more highly skilled OFO group 3 of Technicians and Associate Professionals. Elementary occupations account for 12% of total employment. Demand for Skills 27 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.3 Employment in Base Chemicals by Occupation, Race and Gender Source: CHIETA WSP 2011 In terms of replacement demand due to retirement, just over 11% of the workforce is in the 56+ age category and is spread fairly evenly over the occupations. Nearly 16% of all managers are over 55 years old but Professionals, Technicians, Clerical, Craft / Related Trades and Plant / Machine Operators all have between 10.6% and 12.5% of employees nearing retirement. Figure 3.4 Age profile of the Base Chemicals Subsector by Occupation Source: CHIETA WSP 2011 In terms of creating a skills pipeline, there is a fair proportion of young employees (7% are 25 years or younger) across occupations as well as a solid base of experience (aged 35-55) to develop and impart skills to the younger workers. Looking forward, the base chemicals sector is likely to consolidate following a notable fall in output during the early stages of the recession (29%). With a strong trend towards capital investment over Demand for Skills 28 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 employment, any recovery in the next 5 years is unlikely to create large scale jobs. Therefore the status quo should continue into the future without significant changes, meaning that current skills concerns are likely to remain the focus for the next 5 years. Figure 3.5 Real output, real value added, real fixed capital stock, employment Source: Quantec (2010) One area of change affecting the Base Chemical subsector in the future is the growing demand for nuclear power and thus the demand for nuclear fuel. It has been estimated by the Department of Energy that in the next 5-10 years the additional demand for high level skills will include the following: Table 3.1 - Future skills required by Nuclear Fuels Occupations Number of additional people required Engineers (Chemical, Mechanical, Civil, 135 Metallurgical, Electrical & Regulation) Scientists (Physics, Chemistry, Metallurgical, 125 Geo Science & Regulation) Technicians (Chemical, Mechanical, Geological, 255 Radiation Protection, Regulation (Inspection), Artisans) Source: DOE (2011) Petroleum The number of Petroleum subsector employees broken down by Race, Gender and occupation is shown in the figure below. The subsector is even more skills intensive than Base Chemicals with 64.3% of all employees being either Managers, Professionals or Technicians / Associate Professionals. Only 17.2% of employees fall into the more traditional artisan occupations and a further 4% are classified as elementary occupations Demand for Skills 29 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.6 Petroleum Subsector Skills demanded by Level and Occupation Source: CHIETA WSP 2011 The replacement demand due to retirement is less pronounced in the Petroleum subsector than in the base chemicals subsector. Only 8.9% of workers are in the 56+ age category and will near retirement age by 2016. The highest proportion of employees approaching retirement age is in the Management occupational category (10.6%) which is unlikely to create demand related problems in the sector. Following management, there is a relatively large cadre of artisans nearing retirement age (10.5%). This in itself is not overly problematic but without a suitable skills pipeline, any workers exiting the workforce is likely to exacerbate an existing skills concern. In the case of artisans, the average age of a graduate is likely to be approximately 20-22. Thus by the age of 25 there should be a strong cadre of brand new entrants and employees with at least 3-5 years of experience. Currently in the petroleum subsector, only 5.5% of all artisans are 25 years or younger. Therefore there is a potential for excess demand as experienced artisans leave the sector and the employers are forced to either train up a large number of new artisans or engage in a bidding war for the existing skilled workers. The reality is likely to be a combination of both with existing scarce specialisations (example Petroleum Welders) tending towards a bidding war. Demand for Skills 30 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.7 Age profile of the Petroleum Subsector by Occupation Source: CHIETA WSP 2011 Looking forward, the petroleum sector presents a much rosier picture in terms of potential employment than other subsectors. Recent trends have been to grow employment even in the face of large scale capital investments. This is due to the investments being expansion projects as opposed to labour replacement projects. Figure 3.8 Real output, real value added, real fixed capital stock, employment Source: Quantec (2010) Engagements with stakeholders revealed the following additional projects that are likely to impact on the demand for skills in the future: Demand for Skills 31 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 For the petroleum sub sector in KwaZulu Natal, pipeline projects such as the Transnet Multi Product Pipeline will place a significant premium on engineering skills in the professional occupational category. Project Mthombo is a Petro SA’s initiative to build a world class crude refinery in the COEGA industrial development zone in the Eastern Cape to secure South Africa’s future energy needs. The refinery is designed to meet the increasing demand for refined fuel. In terms of benefits, the refinery can contribute about R18, 5 billion per year on balance of payments from the year of commissioning to 2035. Further up to 27 500 temporary jobs will be created during the construction period of three to four years and, when operational, another 18 500 permanent jobs owing to direct and indirect effects in the South African economy. The multiplier effects will be considerable for small and medium companies as a result of the opportunity to supply goods and services to the refinery (Petro SA 2010). Regarding progress, PetroSA is currently looking at addressing concerns voiced by various stakeholders. the project has passed the pre-feasibility and feasibility phases and will be entering the FEED (Front End Engineering and Design) phase. Final approval will be sought soon after the Front End Engineering Design phase has been completed. It is expected that the refinery will be commissioned in 2018/9. According to Petro SA there are eighteen positions that are deemed mission critical for the project6. From the PESTEL discussion there was concern that project Mthombo would culminate in an exodus of key skills in the engineering and artisan fields from the Western Cape. The demand for skills, underpinning all these projects, according to the SAPIA, fall within the technician and trade worker category and include occupations such as fitters, turners, welders and chemical plant controllers amongst others. 3.2.3 Fertiliser and Explosives Chamber The fertiliser and explosives chamber makes up 3.4% of the sector in terms of the number of levy paying firms. Unfortunately there was insufficient data to report on the explosives subsector on its own so the chamber will be combined for the purposes of reporting in this document. The chamber is substantially less skills intensive relative to the rest of the sector. A total of 38.6% of employees are artisans and a further 20% are Technicians / Associate Professionals. Managers and Professionals combined make up only 18.8% of employees. 6 The PETRO SA skills development framework for project Mthombo is Annexure C Demand for Skills 32 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.9 Skills demanded in Fertiliser and Explosives Subsectors by Level and Occupation Source: CHIETA WSP 2011 While the workforce in the chamber is relatively young with 36% of employees younger than 35, there are double the number of employees 56 years or older than there are 25 years or younger in all the key occupational groups (Managers, Professionals, Technicians / Associate Professionals, Craft and Related Trades and Plant / Machine Operators). The concern about an effective skills pipeline made in the section on the petroleum subsector applies in the explosive and fertiliser subsector as well. If there are not sufficient young people being fed into the workforce and by implication provided with the required industrial experience, the loss of experienced workers due to retirement is likely to create scarcity. A suggestion made by an employer in the sector to assist in the skills pipeline concern is as follows: Employees that are nearing retirement in key occupations are required to spend their final year of employment as a mentor. This benefits all parties concerned in that the retiring employees get a sense of fulfilment in that they are leaving a legacy; young workers benefit from the vast experience of the retiring workers and the employer benefits from having a more complete skills pipeline. Demand for Skills 33 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.10 Age profile of the Fertiliser and Explosives Subsector by Occupation Source: CHIETA WSP 2011 3.2.4 Glass Chamber The glass subsector is less dominated by high level skills than the other subsectors with a small portion performing the managerial and developmental functions and the majority fulfilling a more operational role. By far the largest group of employees are the artisans, those that fall into OFO category 6 and 7, representing 38.6% of workers. The next biggest group of employees are technicians representing a further 20% of workers. The balance is made up of Managers (12.7%), Professionals (6.1%), Clerical and Support (8.6%) and Sales (1.8%). Figure 3.10 Skills demanded in Glass Subsector by Level and Occupation Source: CHIETA WSP 2011 Demand for Skills 34 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 The age profile of the sector has a fair spread across all categories and in general has a similar proportion of workers entering the workforce as exiting due to retirement. While the Professional occupational group is relatively small representing only 6% of employees, it is one area where there may be excess demand in future due to retirement. Currently, 13% of all Professionals are 56 years of age or older with only 6% being 25 years or younger. Of particular concern would be those occupations that require specialised skills for the glass sector which is discussed further in section 3.3 Scarce and Critical Skills. Figure 3.11 Age profile of the Glass Subsector by Occupation Source: CHIETA WSP 2011 Looking forward, a similar picture to the overall sector is revealed. The trends of investment in capital and falling employment numbers is likely to continue especially in the face of falling demand due to the recession. Even though the subsector has responded well in the first post recessionary year, like the base chemical subsector, the glass subsector is likely to consolidate over the next five years resulting in little change to the status quo. Thus it is likely that the current skills concerns should remain the focus. One area of difference in the glass sector however is the potential for new jobs and occupations as a result of increasing environmental pressures. Recycling is likely to become increasingly important and thus related skills will probably experience increasing demand in the future. Demand for Skills 35 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.12 Real output, real value added, real fixed capital stock, employment in the Glass Subsector Source: Quantec (2011) 3.2.5 Speciality Chemicals and Surface Coatings Specialty chemicals and surface coatings have very similar occupational profiles. Both subsectors are unique within the sector in that they have a high level of demand for Elementary Workers. As much as 18.9% in Specialty Chemicals and 21.7% in Surface Coatings are classified as Elementary workers. Artisans and Technicians / Associate Professionals make up a further 25.4% and 16.9% respectively for Specialty Chemicals and 23.9% and 17.7% for Surface Coatings. A large battery manufacturer (Specialty Chemicals) stated that the company’s manufacturing operations consist of Machine operators who have traditionally performed manual functions on low to semi-automatic equipment. With the recent introduction of highly technical, fully automated processed within its plate-making and assembly areas the need to up-skill its operators were specifically highlighted. This coincided with the commensurate need to up skill its supervisory functionaries. More technically complex equipment increased the requirement for additional artisans. In addressing this need the company was soon met with market demand of a premium for this scarce skill and embarked on an extensive program to up skill some of its existing operators to become artisans over a period of five years. Demand for Skills 36 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.13 Speciality chemicals employment by race and gender Source: CHIETA WSP 2011 Figure 3.14 Surface coating employment by race and gender Source: CHIETA WSP 2011 Similar to the occupational profiles, the age profile in the two subsectors are very similar. The majority of the occupational groups have between 9% and 13% in the age category 56 and above. Managers are an exception where the two subsectors have an average of 16% and 17% respectively in the 56 years and older category. Of some concern is the reliance on older, more experienced artisans in the surface coating subsector. A total of 13% of workers are 56 or older while only 5% are 25 years or younger. Therefore it is likely that there will be excess demand for artisans in the surface coating subsector in the future. Demand for Skills 37 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.15 Age profile of speciality chemicals subsector Source: CHIETA WSP 2011 Figure 3.16 Age profile of surface coating subsector Source: CHIETA WSP 2011 According to the Industrial Policy Action Plan, downstream chemical production is to be stimulated in order to increase output and employment. Engagements with the dti has also revealed plans to incentivise the production of downstream flouro-chemicals in particular. The exact nature of these programmes is unclear at this stage as discussions with the captains of industry are still underway. However, it needs to be stated that it is through interventions of this nature that the previously mentioned ‘jobless growth’ is to be overcome. The skills implications of these programmes will be monitored by the CHIETA and included in future SSP updates as details become available. Demand for Skills 38 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 3.2.6 FMCG and Pharmaceutical chamber FMCG Subsector The FMCG subsector in general demands a greater proportion of lower level skills than the sector average with 47% of all employees being classified in the artisan occupational categories. A further 18% are classified as managers with only 5.8% of employees falling into the Professional category. An employer in the FMCG sector mentioned the difficulty in sourcing Packaging Technologists. They reported that there are only post graduate studies offered in three institutions in the world. In South Africa only a diploma is offered and hence there is a deficiency in terms of the career progression for this occupation. Figure 3.17 Employment in the FMCG subsector by Occupation and Skill Level Source: CHIETA WSP 2010 Replacement demand due to retirement is not likely to be a significant driver in the FMCG subsector over the next 5 years with only 8% of employees being over the age of 55. Furthermore, the largest occupational groups in terms of numbers (artisans) have 8% of workers in the 56+ age group and 9% in the 25 and younger age category meaning that there is an effective skills pipeline to replace those workers who will be retiring over the next 5 years. Demand for Skills 39 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.18 Age profile of the FMCG subsector Source: CHIETA WSP 2011 Pharmaceutical subsector Not surprisingly, the pharmaceutical subsector is highly skills intensive with 44.3% of all employees being either Managers or Professionals. This reliance on high level skills is emphasised by the fact that the Technicians and Associate Professionals outnumber their traditional Artisan counterparts with 16.8% of workers as opposed to 13.1%. It is interesting to note that the sector has more female employees than males with 56.6% of all employees being women. Even though the numbers have increased in absolute terms, female workers are still being well represented in the highly skilled occupational categories. A total of 45%, 68% and 60% of Managers, Professionals and Technicians / Associate Professionals respectively are female with a total of 42% of all professionals being white female. Demand for Skills 40 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.19 Pharmaceutical subsector employment by race and gender Source: CHIETA WSP 2011 According to the WSP data, the pharmaceutical subsector has a relatively young sector especially when considering the high skills demanded. A total of 42% of all workers are 35 years old or younger. The only occupation where replacement demand due to retirement is likely to be problematic in the future is that of Service and Sales workers. While the total number of workers in the occupational group is low (1%), nearly a quarter of those workers are 56 years or older. Figure 3.20 Age profile of the pharmaceutical subsector Source: CHIETA WSP 2011 Demand for Skills 41 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 The future of the pharmaceutical subsector is likely to be the most affected by government plans. The global pharmaceutical industry is worth in the region of R3.7 trillion (Genesis 2007) yet the South African industry’s performance has been relatively poor and declining. The dti is thus planning to strengthen the pharmaceutical manufacturing base in South Africa by establishing capacity to produce Antiretroviral (ARV) medication, vaccines and biological medicines. This process will begin by means of a joint-venture to produce Active Pharmaceutical Ingredients (APIs) for ARVs. When one considers the volume of ARVs purchased by the South African government (R4.3 billion in 2010), the ability to produce ARVs locally would be of huge benefit to the local market. The IDC (2010) established that out of a tender of R1 billion, 772 direct jobs are created and as many as 3,658 indirect jobs when one accounts for the increased spending in the market. The key skills required for the future developments in the Pharmaceutical subsector as identified in IPAP 2 will be skills for: Active Pharmaceutical Ingredients (APIs) manufacturing – chemistry and engineering are cornerstones of this area. The core disciplines are: o Biological / Life scientist: Microbiologists o Chemists: Organic / separation, Medicinal, Process and Analytical o Phytochemists o Pharmacists o Engineers: Process, Chemical, Maintenance Biotechnology skills – biological sciences (molecular and microbiology) which cover vaccines, reagents and biological/biosimilar medicines manufacturing. The core disciplines are: o Biological / Life scientists: Microbiologists, Molecular biologists, Immunologists (specialisation) Vaccinologists / Virologists (specialisation) o Chemists: Analytical o Pharmacists o Clinicians / Medical Doctors o Engineers: Process, Chemical, Maintenance Whilst these disciplines are taught at university at different levels, these cadres will not be ready to enter API manufacturing straight after university. Higher education in these disciplines produces generic type outputs with no specialisation to suit the pharmaceutical industry. A post graduate student from university could be developed into a capable API / Vaccine manufacturing specialist in a period of approximately 3 years. Process chemists, chemical engineers and process engineers will need to be developed in particular skills covering the particular/specific reaction types or common chemistry to most processes (reduction, hydrogenation, cyclization etc) for the identified APIs/ Vaccines. A detailed list of specialisations for the manufacture of APIs and Vaccines are included as APPENDIX D. Over the next 5 years, CHIETA will monitor and assess the skills implications of the projects and plan accordingly as and when the details become available. The Genesis (2007) report provides additional Demand for Skills 42 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 indication of the type of skills implications there may be. Whether development will be in generic production or R&D there will be a strong need for chemists, scientists, pharmacologists and engineers. Since there is a relative shortage of tertiary qualified workers in South Africa as compared to other manufacturing economies there is likely to be (increased) scarcity in these occupations over the next 5 to 10 years. 3.3 Designated Trades The CHIETA has 9 designated artisan trades that have been allocated to it, and for which they are responsible for. These are: Boilermaker (Metal Fabricator), Diesel Mechanic, Electrician, Fitter, Instrument Mechanician, Motor Mechanic, Rigger, Turner and Welder. Based on the 2011 WSPs, a total of 3,835 employees are employed in occupations directly related to these trades. The racial and gender profile of these employees is shown below. The occupation “Turner” was not listed as a separate occupation and is thus represented by the occupation “Fitter and Turner”. The occupations are almost exclusively male with females accounting for only 3% of posts. African males are the single biggest group making up 47% of employees followed closely by white males making up a further 37%. Table 3.2 Racial profile of CHIETA designated trades Grand Female Male Total African Coloured Indian White African Coloured Indian White Boilermaker 6 123 31 8 93 261 Diesel Mechanic 32 11 11 32 86 Electrician 24 3 1 3 229 50 34 254 598 Fitter 18 1 6 627 103 67 383 1205 Fitter and Turner 13 1 369 51 35 345 814 Instrument Mechanician 19 3 2 8 196 37 44 190 499 Motor Mechanic 9 6 2 12 29 Rigger 103 6 1 46 156 Welder 7 1 98 18 6 57 187 Grand Total 87 7 5 17 1786 313 208 1412 3835 Source: WSP 2011 Not surprisingly, base chemicals and petroleum are the two biggest employers of designated artisans within the sector employing 28% and 35% respectively. The trades are mostly even spread proportionately across the subsectors with an exception of the glass subsector where there is a dominance of fitters. Demand for Skills 43 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 3.21 CHIETA Designated trades by subsector Source: WSP 2011 When one considers the age profile of the designated trades, the concerns around a skills pipeline as discussed earlier in the chapter becomes very clear. Boilermakers, electricians, fitter and turners and instrument mechanicians seem to have a relatively healthy pipeline in the sense that they have a fair proportion of workers throughout the age spectrum. However, since these are included in the scarce skills list, the issue is that of volume. A greater output of these artisans is required by the sector. Diesel Mechanics and Riggers on the other hand represent a dangerous situation where a current skills shortage may become greatly exacerbated in the future. Over 70% of workers in these two trades are between the ages of 36 and 55 with 0% under the age of 25. With 8 and 18% nearing retirement in the next two years in the two occupations respectively, the lack of new entrants into the market is a concern. The total number of employees currently in these occupations is not large (84 and 79 respectively) and thus it is a situation that can be remedied through the ongoing CHIETA programmes. Figure 3.22 Age profile of CHIETA designated trades Demand for Skills 44 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 3.4 Scarce and Critical Skills Scarce and critical skills indicate areas where the labour market fails to adequately match the supply and demand of skills. These shortages take two forms. According to the Department of Labour, absolute scarcity refers to suitably qualified people who are not available in the labour market. Critical skills refer to particular capabilities needed within an occupation. It is important to understand the drivers of scarce and critical skills in the sector so that the most appropriate interventions can be undertaken in order to overcome the scarcity. Therefore this section will firstly outline the drivers of scarcity derived from interactions with the various stakeholders and then detail specific areas of scarcity that were identified. 3.4.1 Drivers of scarcity While each of the subsectors have varying and often unique skills requirements, the drivers are overlapping and represent a potential synergy in terms of the interventions required to overcome them. a. Company Specific Drivers of Scarcity The WSP data on its own represents a misleading representation of skills scarcity in the sector as many companies report difficulties in hiring employees for posts where there is no real scarcity in the labour market. Instead company specific factors are driving the perception of scarcity. These can include: 1. Geographic location: companies outside of the major urban centres and in particular those in rural areas struggle to attract certain skills and may give the perception of scarcity. 2. Unattractive packages: if remuneration is not competitive with industry norms the requisite calibre of applicants will not be attracted. 3. Ineffective recruitment policies: If recruitment processes are not effective, the likelihood of attracting suitable candidates is also diminished. A major employer based in the Eastern Cape mentioned scarcity of Chemical Engineers because institutions in the province historically did not produce these skills. Also they mentioned their difficulty in competing in the labour market against firms based in Gauteng. The most appropriate intervention will vary from company to company since company specific factors are by definition unique. Therefore when companies are experiencing difficulty filling posts in a given occupation, the company specific factors should be considered and ruled out first as they are the easiest to counter based on internal policy. Once this is complete, posts can be filled from the existing pool of resources in the labour market. In addition, certain drivers are likely to be regional and can thus be approached through a regional strategy. b. Poor quality of graduates It was mentioned by stakeholders that a major driver of scarcity is that the quality of graduates being produced by educational institutions are not matching the skills demanded by the sector. This mismatch is not limited to specific occupations but examples were given by stakeholders during Demand for Skills 45 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 consultation for professionals (for example engineers) and artisans (fitters). In previous sections, the concept of a skills pipeline was discussed where the entrants to the labour market need to match those leaving the market, adjusted for growth or contraction in the occupation. It has become clear that a reluctance to hire inexperienced artisan graduates creates excess demand for more experienced artisans and thus driving scarcity. This is discussed further under the scarce skills list. The most appropriate long term solution would involve the establishment of partnerships between providers and industry so that the difficulties of provision can be overcome by technical input from industry, integrated workplace learning as well as feedback to improve curricula. c. Lack of information on career opportunities for learners A driver of scarcity that was repeatedly mentioned for occupations from nearly all the major groupings in the OFO was that learners are not aware of the majority of career options in the economy and thus do not follow the required learning paths that lead them to the scarce occupations. For example, a number of sectors mentioned a shortage of instrument mechanicians (technician to complete electronic repairs). In order to become an instrument mechanician, a decision to study light current over heavy current needs to be made early in the learner’s academic career. Thus the most appropriate intervention in these cases is to engage in career guidance and education at the levels where the decisions are being made so that learner’s choices are based on a full understanding of their employment options post graduation. d. Subsector specialists Each subsector has a small number of employees that have a specialisation in a given field relevant to that specific subsector. For example glass architects are architects that have specialised in the technicalities of glass. Flavourists (FMCG) are specialists that are able to discern flavours in food, perfumes etcetera. Engineers specialising in explosives for example are also required. The demand in these occupations in terms of numbers (both scarce and critical depending on the nature of the specialisation) is usually very low but represent an important aspect of the businesses within those industries. The most appropriate intervention is a combination of: 1. Targeted career guidance so that suitable learners are aware of their option to specialise and what the implications are for their careers. 2. Support programmes both financial and non-financial in order to incentivise learners to specialise. e. Lack of succession planning Often an occupation requires a very high level of company specific knowledge that excludes applicants from the general labour market. Process technicians for example are required to have a base knowledge as a technician but must be an expert in the processes that are specific to the company. This level of knowledge is gained through 5 to 10 years of experience depending on the process. Thus there is a 5 to 10 year lead time to fill a post from scratch. Therefore, for each such occupation, the pipeline needs to be established in such a way that the prospective employees are moved through an identified career pathway; in effect creating a company specific supply chain for company specific demand. f. New Skills The ever changing modern environment requires companies to adapt in order to remain competitive. These adaptations will often require variations in the skills demanded in specific Demand for Skills 46 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 occupations or even whole new occupations to be created. In such cases scarcity is to be expected as providers have not yet been able to construct programmes and standards to train workers. For example the growing concern over the impact of our businesses on the natural environment is leading to changing occupations as well as new occupations. Occupational health and safety officers are likely to become increasingly relied upon to monitor and manage the carbon footprint of the organisation (critical skill) or similarly an engineer would need to design processes to be efficient while still minimising carbon emissions (critical skills). Perhaps in the next 5 years new occupations will emerge that rely on composite skills such as a “Greengineer” (scarce skill) who combines the engineering expertise with knowledge of environmental legislation and drives / designs sustainable economic initiatives relevant to the chemical sector. 3.4.2 Scarce Skills List The list below combines scarce and critical skills derived from WSP 2011 submissions and workshops with stakeholders. Themes were identified and filtered to identify the occupations where interventions are most urgently required. This information is presented in a general, high level manner and then focused to some specific key occupations. The purpose of this scarce skills list is to inform the CHIETA strategic plan so that investments made by the SETA will yield the highest possible return. That is not to say that scarce skills not included in the list will not be funded but rather this list assists in defining the principles driving the CHIETA strategy. The following occupations were identified as having the most noted scarcity in absolute terms. In other words, drivers of scarcity aside, there are simply not enough qualified workers to meet the demand in these occupations. 1. Pharmacists and related occupations. Pharmacists are demanded in a number of occupations in a number of different sectors and the demand in the Pharmaceutical Manufacturing sector will continue to grow as IPAP2 is implemented. Specialisations mentioned include: Industrial Pharmacists, Pharmaceutical Technician and Pharmacist Assistant (primarily due to replacement demand). 2. Engineers. Key to the future of the sector is a solid base of engineering skills. Part of the existing shortage is due to the perceived lack of work readiness of graduates but there is still a shortage in absolute terms. More critically, a major theme identified in the PESTEL analysis is the importance of high level skills and R&D as South Africa continues to drive towards becoming a knowledge economy. At the centre of this drive for the chemical sector needs to be a core of engineering skills. Specialisations include: Chemical Engineers, Mechanical Engineers, Petroleum Engineers, Pharmaceutical Engineers (new / emerging occupation) and even marine engineers (demand by the petroleum subsector). 3. Artisans. There are a number of artisan occupations that are experiencing scarcity. Some of them such as electricians, millwrights and fitters are identified as absolute scarcity in terms of number of people but the above mentioned as well as riggers are mentioned in terms of replacement demand. What that means is that the previously mentioned dynamic of the sector competing for experienced artisans over the non-work-ready graduates is creating a high turnover rate and thus scarcity through replacement demand. The age profile of the riggers is an extreme case of a malfunctioning skills pipeline. 4. Sector Specific Specialist Occupations. As mentioned previously strong cases have been made by stakeholders to address scarcity in areas where there is not a huge demand in Demand for Skills 47 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 terms of number of workers but these workers have a great impact on the sector. These include: tinters, flavourists, architectural glass specialists and glaziers. Demand for Skills 48 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Table 3.3 - Absolute Scarce Skills Absolute - Absolute - New / Num Absolute - Emerging Occupation / Occupational Group Subsector Specialisation People Replacement Occupation Pharmaceutical Industrial Pharmacist, Pharmacist and Related Pharmaceutical Technicians YES Pharmacist Assistant YES ALL Chemical, Mechanical, Petroleum, Engineers Marine YES Pharmaceutical YES ALL Fitter YES YES Artisans Millwright YES YES Electrician YES YES Rigger YES Base, Explosives, Manufacturing Technician YES Technicians Fertilisers, Glass, Pharmaceuticals Instrument Mechanician YES YES Geologist / Geoscientist Petroleum - YES Examples of Sector Specialist Occupations Paint Tinter / Mixer Surface Coatings - YES Architectural Glass Specialist, Glaziers Glass - YES Flavourists FMCG YES Demand for Skills 49 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 As mentioned earlier in the chapter, a number of high level skills will be required to realise the goals of IPAP2. While these occupations may not be considered scarce at the moment, if they are not developed now for the future they will be considered scarce in 5 years time and severely limit the impact of the dti’s strategies. The complete list of skills required is included as Appendix B. 3.4.3 Critical Skills List Critical skills are somewhat more difficult to identify as the gaps in competency within the labour force are likely to cover a very wide variety of competencies in almost as many occupations. The list below is merely a list of competencies that have been specifically identified by stakeholders. This list is not intended to comprehensive but rather highlight a few key skills. 1. Sales Representatives. Sales representatives featured highly on the scarce skills list but rather than the sales skills being scarce, meaning that there are not enough sales people in the labour market, there are critical skills gaps relating to the nature of the subsector. For example, there are enough reps available but not enough pharmaceutical reps or reps for industrial products. 2. Skills relating to new technology or new machinery. When new machinery or a new technology is implemented, the technicians and artisans required to operate and maintain the equipment require additional skills. The nature of the skills required is dependent on the technology being implemented. 3. Soft skills. It was reported by stakeholders that since many of the professionals and technicians in the chemicals sector are drawn from the hard sciences such as engineering and chemistry, there is often a lack of soft skills such as communication and teamwork. 4. Green production. Many of the changes that are likely to emerge in order to move towards cleaner production will be accomplished by existing employees. This presents potential skills gaps in the current workforce. Examples of occupations where this is likely to be evident include: occupational health and safety operators, engineers and engineering technicians. The Department of Environmental Affairs’ “Green Jobs” report (2010) mentions the following skills areas: Design skills required for eco-design, green manufacturing and materials development Waste skills required for monitoring, processing, managing and minimising waste Energy skills required for managing, trading, renewables and optimisation Water skills required for managing, re-use and monitoring Building skills required for energy management, energy efficient construction, efficiency and carbon ratings Transport skills required for impact minimisation and management Materials skills required for sourcing, procurement and management Financial skills required for investment, principles and tools Management skills required for business planning, awareness and assessment Policy and planning skills required for strategy development and implementation Demand for Skills 50 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 CHAPTER 4. PROVISION AND SUPPLY OF SKILLS The supply of skills into the chemical sector is influenced by a variety of factors such as the availability of suitable qualifications in institutions of learning, the quality of teaching available, the choices made by students on areas of specialisation for their studies, and so on. In consultations with stakeholders, it became evident that a critical element driving the availability of suitably skilled workers for the chemicals industries is the availability of reliable and credible information on career options within the sector. On the whole, stakeholders identified this as an important area to be addressed to ensure that learners make informed choices on their field of study, knowing the diversity of career paths that are available to them within the chemicals industries. The analysis of supply examines the output of various learning channels available to workers, unemployed people, and newly qualified youngsters entering the labour market for the first time. The skills required by the chemicals industries are grounded in the natural sciences, most notably chemistry. The pipeline for the supply of skills to the sector thus includes schools, colleges, universities of technology, universities, and training offered by employers in the workplace. The analysis of supply also explores possible models of cooperation between the SETA, industry and providers to broaden access to further learning and to improve the quality of the learning programmes available to the sector. The proposals are guided by consultations undertaken nationally with a variety of stakeholders from industry, public and private FET colleges, and public and private Universities. 4.1 National Senior Certificate results Successive ministers of education have attempted to increase continuously the number of pupils learning and passing mathematics and sciences in high school. However, the education system has been slow to generate the critical mass of students who successfully sit for these subjects. The impact on the labour market is widespread, and has led to persistent scarcity in certain occupations for which high school passes are required in these subjects for accessing further and higher education. In 2008, the overall pass rate for the National Senior Certificate was 62.2%, down from 65.2% in the previous year. This was the same year in which the school leaving examinations were based on Curriculum 2001 for the first time. The government has since abandoned this approach to teaching and learning, and returned to more traditional teaching fundamentals which had been eroded during the era of Curriculum 2001. The results for maths and science in 2008 are presented in the table below. Supply of Skills 51 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Table 4.1 Results of the National Senior Certificate: 2008 and 2009 SEX CANDIDATES NUMBER AND % WHO ACHIEVED 40% and above 30% and above 2008 No. % No. % LIFE SCIENCES Female 160,599 65,615 41% 114,144 71.1% Male 137,611 51,868 38% 96,139 69.9% Total 298,210 117,483 39% 210,283 70.5% MATHEMATICS Female 160,996 43,187 27% 67,572 42.0% Male 139,012 45,999 33% 68,612 49.4% Total 300,008 89,186 30% 136,184 45.4% PHYSICAL SCIENCES Female 109,187 28,603 26% 57,459 52.6% Male 108,113 32,877 30% 61,747 57.1% Total 217,300 61,480 28% 119,206 54.9% SEX CANDIDATES NUMBER AND % WHO ACHIEVED 40% and above 30% and above 2009 No. % No. % LIFE SCIENCES Female 162 915 66 051 41% 106 892 65.6% Male 135 748 53 018 39% 88 760 65.4% Total 298 663 119 069 40% 195 652 65.5% MATHEMATICS Female 156 953 41 250 26% 66 533 42.4% Male 133 454 44 106 33% 66 972 50.2% Total 290 407 85 356 29% 133 505 46.0% PHYSICAL SCIENCES Female 112 910 20 869 18% 38 760 34.3% Male 107 972 24 583 23% 42 596 39.5% Total 220 882 45 452 21% 81 356 36.8% Source: Education Statistics in South Africa 2008, 2009 Well below half of the pupils who sat for mathematics and sciences got a mark above 40% in both years. Performance in the Physical sciences worsened significantly in 2009, with the proportion of learners achieving a mark of 40% or above falling from 28% to 21%. The actual number of learners sitting for the exams increased marginally in maths and physical sciences, and remained constant in the life sciences, year on year. Clearly, unless these numbers can be boosted significantly, the pool of students able to pursue engineering and related qualifications required by the chemicals industries will remain limited. 4.2 Output from Further Education and Training Institutions The workforce of the chemical industries is concentrated in the Technicians and Associate Professionals, and Plant and Machine Operators occupational categories. Training and development for these occupations principally occurs at FET colleges (and to some extent Universities of Technology, although these are examined in the section on higher education). These institutions offer programmes that more closely replicate the workplace environment, and generally include placement with an employer as a core element of fulfilling the requirements for attaining a qualification. Historical data for this tier of the education sector is not readily available. However, a comprehensive report was prepared by the Department of Higher Education and Training in 2009. Supply of Skills 52 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 The findings for qualifications most relevant to the chemicals industries are presented below. The pattern that emerges is worrying. Overall, the pass rates for most subjects are well below 50%, with few exceptions. 7 Table 4.2 Results of examinations in selected National Certificate subjects at FET Colleges Subject Level Entered Wrote Passed % Pass Chemical Laboratory Technology N2 6 - - 0.0% Industrial science N2 7 - - 0.0% Plant Operation Theory N2 14 9 - 0.0% Engineering science N2 5,407 4,058 1,167 28.8% Mathematics N2 5,616 4,055 1,188 29.3% Electrical trade theory N2 3,159 2,459 780 31.7% Diesel Electrical Theory N2 965 752 371 49.3% Fitting and machining theory N2 1,725 1,352 755 55.8% Industrial chemistry N2 6 4 3 75.0% Diesel Trade theory N2 130 91 69 75.8% Chemical Laboratory Technology N3 186 140 27 19.3% Diesel Trade theory N3 1,149 901 259 28.7% Electrical trade theory N3 1,953 1,424 443 31.1% Mathematics N3 22,578 17,789 6,077 34.2% Industrial chemistry N3 429 363 152 41.9% Plant Operation Theory N3 442 362 165 45.6% Engineering science N3 2 2 2 100.0% Mathematics N3 1 1 1 100.0% Engineering science N4 30,810 26,705 8,291 31.0% Chemistry N4 628 565 232 41.1% Mathematics N4 37,575 32,580 13,379 41.1% Chemical Plant Operation N4 536 484 208 43.0% Chemical Plant Operation N5 372 332 129 38.9% Mathematics N5 16,445 14,410 6,022 41.8% Chemistry N5 354 324 223 68.8% Chemical Technology N6 293 223 69 30.9% Chemical Plant Operation N6 200 184 99 53.8% Mathematics N6 7,887 6,922 3,986 57.6% TOTAL 138,875 116,491 44,097 37.9% Source: FET Colleges Report 2009 7 At the time of preparing this update, the Colleges Report for 2010 was not yet available from the Department of Higher Education and Training. Supply of Skills 53 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Table 4.3 Results of examinations in selected National Certificate(Vocational) subjects at FET Colleges Subject Level Entered Wrote Passed % Pass Welding L2 618 371 99 26.7% Mathematics L2 42,345 30,975 10,171 32.8% Fitting and turning L2 4,926 3,180 1,166 36.7% Engineering Technology L2 14,341 9,554 4,568 47.8% Engineering Fundamentals L2 14,050 8,970 5,479 61.1% Mathematics L3 11,430 8,684 3,386 39.0% Fitting and turning L3 1,512 1,013 444 43.8% Engineering practice and maintenance L3 4,461 3,122 1,468 47.0% Engineering practice - boiler making L3 887 606 363 59.9% Welding L3 37 28 21 75.0% Mathematics L4 2,100 1,596 832 52.1% Engineering fabrication - boiler making L4 183 110 89 80.9% Fitting and turning L4 382 285 239 83.9% TOTAL 97,272 68,494 28,325 41.4% Source: FET Colleges Report 2009 The National Certificates (Vocational) have been introduced to replace the traditional National Certificates, with a view to broadening the scope of coverage beyond the trades and related occupations. At present, the available range of NC(V) qualifications relevant to the needs of the chemical industries is very limited, and much more capacity exists for the delivery of the old National Certificates. Furthermore, public providers indicated that employers understand and prefer the old qualifications over the new ones, thus learners emerging from college with NC(V) experience greater difficulty finding employment. On the other hand, according to a report made to Parliament’s Higher Education and Training Portfolio Committee by the Department of Higher Education and Training8, 100% of all bursary funding is allocated to NC(V) studies. This severely constrains the options available to learners who are dependent of financial aid, should they wish to pursue studies in fields relevant to the chemical industries. Much more effort would have to be invested in converting the old N qualifications to NC(V)s, and to align them to the needs of employers in order to remove this constraint. Notwithstanding the above, the DHET has undertaken to expand enrolment in FET colleges significantly, as illustrated below: YEAR NATIONAL ENROLMENT 2007 25 000 2008 60 000 2009 120 000 2010 177 000 2011 256 000 2012 371 000 2013 538 000 2014 800 000 8 www.pmg.org.za/files/docs/100202het.ppt accessed 15/09/2010 Supply of Skills 54 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 www.pmg.org.za/files/docs/100202het.ppt The expectation is that SETAs will work closely with FET colleges to expand their capacity to deliver relevant training, particularly for artisans, as provided for in the NSDS III framework document. 4.3 Enrolment and completion from HET institutions Enrolment in higher education institutions has been steadily increasing over the years. Throughput rates, however, also reflect relatively high attrition rates. Only a small proportion of students who enter a programme complete the requirements for their qualification within the scheduled timeframe – meaning the throughput is inefficient. Table 4.4 Analysis of throughput at higher education institutions UG PG Dip/Cert 1st Bach Dip/Cert Honours Masters Phd Enrolment 2007 80,722 95,749 2,809 6,053 16,758 4,617 Completion 2007 16,622 11,625 162 1,666 1,084 588 Throughput 21% 12% 6% 28% 6% 13% Enrolment 2008 85,254 98,537 3,384 6,523 17,814 4,721 Completion 2008 17,137 12,469 152 1,985 1,039 573 Throughput 20% 13% 4% 30% 6% 12% Enrolment 2009 102,339 169,725 9,139 18,949 21,600 5,211 Completion 2009 16,012 13,770 388 1,858 1,197 616 Throughput 16% 8% 4% 10% 6% 12% Enrolment 2010 84,023 107,513 3,676 1,456 8,123 17,443 Completion 2010 10,637 17,375 2,139 423 4,282 2,911 Throughput 13% 16% 58% 29% 53% 17% Source: HEMIS 2007-09 The above calculation of throughput is a rough estimate, based on the ratio of science, engineering, and technology (SET) graduates to overall enrolment in a given year. A more accurate basis for the calculation should be based on tracing the attrition of a cohort from admission to completion of qualification requirements within the stipulated timeframe. Thus, for the throughput for the 3 year bachelor’s degree, tracing the fate of the intake of 2007 to completion in 2009, is 14%. Even so, the figures presented here present a reasonable estimate given that the completion figures are not changing significantly over time, even as enrolment is rising. The chemical industries draw on the general pool of graduates who pursue SET qualifications. A key drive has been to encourage and support more black students into these fields. The main challenge in this regard however is that the vast majority of black students still attend schools with limited capacity to teach maths and science at a level that will enable students to pursue those subjects at tertiary level. The irony is that, bursaries set aside specifically for these subjects are more likely to benefit white students, who generally attend better schools and are thus able to meet the entry requirements of tertiary education institutions. The graph below illustrates the distribution of graduates by race within the SET fields between 2007 and 2010. Supply of Skills 55 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Figure 4.1 SET Completion rates at higher education institutions by race and qualification type Source HEMIS 2007-10 Whereas black students are in a significant and growing majority of graduates achieving undergraduate diplomas and certificates, and first bachelor’s degrees, the numbers drop off dramatically for post graduate qualifications. Importantly, the number of black and white students receiving honours, masters, and doctoral degrees in SET are very similar, which suggests that a much smaller proportion of black students move from the first degree onto further studies, compared to their white counterparts. The skills profile for the sector is shifting, with decreasing demand for lower skilled workers in favour of medium and high skilled workers. In order to support the equity objectives of government, much work needs to be done to encourage and assist more black students to pursue further studies in these fields. Tertiary institutions offer a number of qualifications that are specifically relevant to the chemical industries. These include chemistry, chemical engineering and technology, petroleum engineering, other engineering and technology, pharmaceutical science, other health care and health sciences, other life sciences and physical sciences, mathematics, other industrial arts, trades and technology, and other agricultural and renewable resources. The number of students emerging from institutions with these qualifications has remained relatively flat between 2007 and 2010. (The figures for 2009 show some decline across all qualifications; however, the numbers are provisional, and therefore should be read with caution). Supply of Skills 56 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Although Petroleum is provided for, at present none of the universities appear to be offering the programme, or else no students are choosing to pursue such qualifications. Anecdotal evidence from representatives of industry and public providers suggest that, at present, employers prefer university graduates to graduates of FET colleges or Universities of Technology when filling vacancies. This notwithstanding that the university graduates are generally not necessarily the best candidates for the jobs, and the graduates of the other institutions receive training that is often more relevant to the needs of industry. Employers place a premium on the quality of tuition learners obtain at universities over that at other institutions. Evidence from India suggests that this situation is not unique to SA. As the chemical industry sought to become competitive in an increasingly integrated global economy, employers increased investments in technology, and thus tended to employ workers with diplomas in preference to those with certificates or lesser qualifications. The trend is not looking likely to be reversed, as technology takes on an increasingly important role in productivity. The net result has been an increased demand for multi-skilled workers, and lower demand for workers overall. (International Labour Organisation) In order to achieve a better match between newly qualified prospective employees, it will be necessary to address this disjuncture on two levels: first, the quality of provision will have to be improved to raise the credibility of the qualifications obtained. Secondly, employers will need to be given clarity on the links between particular occupations and qualifications across the spectrum of the education system in order to assist them to find candidates that are ‘fit for purpose.’ Supply of Skills 57 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Table 4.5 Selected University qualifications relevant to the Chemicals Sector UG Dip/Cert 1st Bach PG Dip/Cert Honours Masters Doctorate 2007 2008 2009 2007 2008 2009 2007 2008 2009 2007 2008 2009 2007 2008 2009 2007 2008 2009 0199 Other Ag. and Renewable Resources 5 5 17 16 18 17 - 1 - 9 9 7 42 28 47 7 1 - 0409 Management 2,547 2,654 2,555 3,339 3,581 2,477 297 311 290 508 447 281 869 815 491 29 35 23 0805 Chemical Engineering and Technology 408 417 410 514 537 561 - 3 0 29 48 30 58 64 52 11 14 13 0824 Petroleum Engineering - - - - - - - - - - - - - - - - - - 0899 Other Engineering and Eng. Tech. 72 57 0 61 67 281 2 2 2 95 96 163 96 106 142 12 12 13 0904 Pharmaceutical Science - - - 396 394 354 3 23 20 22 19 23 112 77 67 11 9 16 0999 Other Health Care and Health Sciences - 1 - 5 30 4 40 28 62 12 15 9 46 41 55 7 3 6 1199 Other Industrial Arts, Trades and Tech. 1 1 - 4 - - 2 - 1 - - - - - - - - - 1504 Chemistry 398 440 429 814 833 1,014 1 1 38 245 274 285 147 156 159 73 88 94 1599 Other Life Sciences and Physical Sc. 105 98 65 160 167 175 2 - 8 77 82 108 57 68 78 18 12 23 1601 Mathematical Sc., General Perspective 50 246 262 230 232 214 25 10 21 57 72 51 19 20 18 19 9 11 Source: HEMIS 2007-2009 Supply of Skills 58 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 4.4 Training by employers Training by employers is reported based on the workplace skills plans submitted annually by employers. Reports give an indication of overall training undertaken, but not necessarily the proportion of workers that are receiving the training. This is because learners who receive multiple trainings are not distinguished from those who only attend once. Table 4.6 below illustrates what training was offered for each occupational group. Table 4.6 Training by occupation and type SKILLED PLANT and SERVICE CRAFT and MACHINE TECHNICIANS CLERICAL and RELATED OPERATORS and ASSOCIATE SUPPORT SALES TRADES and ELEMENTARY GRAND UNSPECIFIED MANAGERS PROFESSIONALS PROFESSIONALS WORKERS WORKERS WORKERS ASSEMBLERS OCCUPATIONS TOTAL ABET 1 11 1 1 21 2 1 5 45 33 120 ABET 2 16 1 2 14 6 3 4 40 26 112 ABET 3 44 4 7 19 7 5 3 30 32 151 ABET 4 27 30 107 90 58 19 5 237 129 704 Article 5 5 3 1 14 Certificate 506 1943 1042 1721 761 72 443 3136 542 10171 Doctoral_Degree 1 1 Ex-Leave Training 458 9 25 5 8 6 3 11 3 528 Further_Diploma 1 3 5 9 Honours_Degree 9 6 7 5 27 Induction Training 270 730 794 1505 532 93 450 1909 601 6947 Internship 1 4 4 3 18 38 Learnerships 104 28 107 104 22 39 3118 59 3725 Learning Programme 419 942 924 1827 680 13 529 699 466 6513 Masters_Degree 17 9 3 1 32 Supply of Skills 59 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 SKILLED PLANT and SERVICE CRAFT and MACHINE TECHNICIANS CLERICAL and RELATED OPERATORS and ASSOCIATE SUPPORT SALES TRADES and ELEMENTARY GRAND UNSPECIFIED MANAGERS PROFESSIONALS PROFESSIONALS WORKERS WORKERS WORKERS ASSEMBLERS OCCUPATIONS TOTAL Mentorship 5 32 59 25 13 5 2 11 29 181 National_Certificate 7 46 49 77 39 4 22 53 17 318 National_Diploma 6 44 27 132 43 39 220 31 554 National_First_Degree 2 27 36 28 17 3 3 2 133 National_Higher_Certificate 1 30 19 26 14 3 4 28 125 National_Higher_Diploma 3 12 8 1 1 25 National_Masters_Diploma 1 1 2 Post_Graduate_Diploma 8 3 3 2 1 17 Short Course 1152 7722 8115 9552 4791 634 1641 8356 2999 45505 Skills Programme 359 3326 3967 5082 2221 408 1056 3809 1416 21807 Work Placement 3 11 13 8 2 31 35 103 Workplace Experience 133 1780 1634 2450 958 82 659 6498 1529 15756 Other 342 4199 4998 8864 2809 325 1835 2651 1956 28301 Grand Total 3868 20941 21965 31581 13002 1674 6744 30863 9951 141919 Source: CHIETA WSPs 2011 Most of the training was offered to managers, professionals, technicians, and operators. Almost half (47%) of all training was in the form of short courses or skills programmes, across all occupations. A further 20% of the training is unclassified. Almost 16000 workplace experience opportunities were availed during the 2010 financial year, the majority being aimed at operators, and to a lesser extent to technicians. Given the concerns raised about the lack of appropriate work experience in young workers entering this sector, this may be an area to assess opportunities for expansion. Supply of Skills 60 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Employers receive grants each year when they submit workplace skills plans and training reports of training offered to workers in the previous year. For the period 2005 – 2010, the CHIETA and its employers have supported at least 15,438 learners through learnerships. For the period 2008-2009 223 apprenticeships were supported by CHIETA. Training was concentrated in the occupations that predominate within the sector – technicians and trades workers, and machine operators and drivers. Appendix E shows a selection of learnerships implemented over the past five years. In addition to the leanerships and apprenticeships, employers reported on qualifications, skills programmes and other short courses offered to both their own employees and to unemployed beneficiaries, which varied widely based on the needs of individual employers. In addition, employers supported unemployed learners in a variety of areas.These are reflected in Table 4.7 below. Supply of Skills 61 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Table 4.7 Training for the unemployed by subsector and type In-house training National certificates NATED 1-3 NATED 4-8 Bachelor's degree Masters degree Doctoral Other Total Base Chemicals - 12 211 95 80 1 - - 399 Explosives - - 17 11 5 - - - 33 Fertilisers - 1 001 5 7 40 - - 14 1 067 FMCG - 215 200 27 2 - - 22 466 Glass - - 13 46 3 - - 2 64 Petroleum 10 345* 25 43 44 128 - - 104 10 689 Pharmaceuticals - 26 58 27 121 12 1 5 250 Specialty Chemicals - 68 116 107 23 - - 49 363 Surface Coatings - - 15 46 3 - - 118 182 Grand Total 10 345 1 347 678 410 405 13 1 314 13 513 Source: CHIETA WSP submissions 2011 *All In-House training was offered by SASOL. According to the information submitted by employers, 13,513 unemployed learners underwent training within the sector. Of these, 419 are pursuing tertiary qualifications, which is a significant proportion (13%) of the total (excluding the SASOL in-house trainees). Supply of Skills 62 4.5 Priority qualifications The main qualifications that will continue to be prioritised in the sector are chemical engineers, artisans, and operators, as identified in the analysis of scarce skills. At the same time, some of the chambers have identified the absence of relevant programmes and qualifications as a significant contributor to skills scarcity within their industries. Examples include chemical engineers specialising in explosives, tinting specialists for surface coatings; flavourists within the specialty chemicals industries, and others. Although the numbers needed are not large, stakeholders identified the need to find ways to develop these capacities within the available resource and institutional constraints. One of the main contributors identified for scarcity experienced in some occupations is the lack of awareness by learners of the career options available within the sector. As a consequence, some occupations lack a pipeline of skilled workers who can progress from the entry level and progress to the specialist functions that exist within those fields. The examples cited above are illustrative of this point. To overcome this, a combination of career guidance and career path mapping is needed for those occupations to enable learners to maintain a long-term view as they make decisions about their choices of field of study. 4.6 Industry/provider links, SETA/provider partnerships The CHIETA has made a firm commitment to establish and entrench partnership models that will facilitate proper alignment of programmes offered by education and training providers. To that end, an extensive consultative process was undertaken in the preparation of this SSP Update to explore possibilities for establishment of such partnerships. The key principles to emerge from stakeholders that should inform partnerships in the sector are: Partnerships should be defined by the needs of the sub-sectors; one format may not fit the needs of all, therefore each model should be guided by the context within which it is operating. Roles should be well defined and documented to ensure transparency and accountability on commitments made Formal agreements should be in place that define the scope, funding, timeframes, and roles the partnership model Both public and private partners can be involved in such partnerships CHIETA to be the champion of such partnerships to ensure they remain active and sustainable The core objectives of the partnerships include, but will not be limited to: Increasing access to workplace learning opportunities to facilitate completion of qualification requirements, particularly for youth Ensuring or improving alignment of programmes and qualifications to the needs of industry Improving the capacity of public providers, particularly FET colleges, to deliver industry relevant qualifications. Capacity relates to infrastructure, lecturers, and resources. To establish and entrench quality assurance mechanisms by enhancing the role of industry stakeholders in the oversight of programmes and qualifications. To foster links between FET and HEI providers to enhance the capacity and quality of the colleges To improve communication and networking amongst all stakeholders Bibliography 63 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 During consultations (both workshops and key informant interviews), a dominant view emerged from industry that at present, the quality of worker emerging from most institutions, both FET and HE, is not adequately prepared for the workplace. Industry invests a lot of resources in bridging the gap between what employers need and the level of competence of the worker. This is leading to increased reliance on in-house training, head-hunting, and mechanisation to compensate for the gaps in skills and competence of new workers in particular. In some cases, employers go as far as importing skilled workers, as the costs are equivalent, but it is easier and quicker to import the skills. The focus of the NSDS on enhancing the capacity of providers is thus an important aspect that will be pursued vigorously by CHIETA to address these concerns. Examples of partnerships between industry and providers exist in different parts of the country. SAPIA The Leadership in Oil and Energy Certificate Programme (National Qualifications Framework Level 7), accredited and delivered by Wits Business School, is an industry-wide intervention designed to create a pool of diverse and highly skilled employees with petroleum industry knowledge and excellent business management skills. Through the programme, industry is ensuring a representative talent pipeline into senior management positions. Since the programme’s inception in 2006, a total of 263 industry employees have graduated. In 2009, 66 participants enrolled in the programme of which 89.4% are black and 77.3% are women employees. (Source: http://www.sapia.co.za/key- issues/human-resource-development/skills-development.html) A Memorandum of Agreement has been put in place that defines the roles, responsibilities, expected outcomes, and other salient aspects of the relationship with Wits, which forms the basis for the partnership. Cape Higher Education Consortium The Cape Higher Education Consortium (CHEC) aims to establish the Western Cape as a strong higher education region which, through systemic inter-institutional cooperation and academic programme collaboration, will be distinctively responsive to regional, national and international developments in the knowledge economy of the 21st century sensitive to historical realities in promoting equity across its institutions and cost-effective and of high quality. This academic consortium comprises the four public universities in the Western Cape. All of the universities are within a 40-minute range from each other by road and share a single automated library system. The CHEC Board of Directors comprises four senior executives, usually the deputy vice chancellors charged with academic affairs, and the CHEC chief executive officer. The Board operates under delegated authority from the Councils of the four universities. (Source: www.chec.ac.za) Durban University of Technology The DUT has established an advisory board made up of representatives from the University and local industry within the province. The board meets on a regular basis to provide review and oversight over the programme offerings of the University; this ensures that the curriculum is aligned to the needs of local industry, and is quality assured appropriately. In addition, the forum makes access to workplaces for students in order for them to meet their qualifications easier as employers have buy in, and have faith in the education afforded to the students. University of Johannesburg The Department of Chemical Engineering at the University of Johannesburg and CHIETA are exploring a number of areas of possible collaboration and cooperation in the field of the conversion of bio-waste to renewable energy sources. In broad terms, UJ aims to position itself as an innovation Supply of Skills 64 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 hub in the area of bio-fuels. Some specific ideas have been tabled and the most appropriate are being considered. According to UJ,”[the Department of] Chemical Engineering has the capacity and diversity within its programme to accommodate a wide range of sub-programmes and diversity of R & D offerings. Creating a silhouette for knowledge systems to metamorphose within the “Green Technology” realm can become the bedrock of a UJ-CHIETA partnership on a level wherein the aspects of job creation and human capacity development can be developed on a very profound level together.” CHIETA intends exploring the best ways to bring such a partnership to realisation in the near future. These serve as a useful basis for testing what is possible and what may be replicated across the sector, based on identified needs. Supply of Skills 65 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Chapter 5. Implications for the Strategic Plan9. A number of important factors arose during the stakeholder consultations that can usefully inform the finalisation of the CHIETA Strategic Plan. Much of the Analysis of Demand and Supply has presented these issues, and the recommendations presented here are aimed at guiding the practical realisation of those issues within CHIETA’s operations. The current strategic plan does well to address the majority of these concerns but, it is likely that further clarity will be gained as the plan is operationalised. 1) The point was made a number of times that the chemical sector is very skills intensive when compared with the manufacturing sector as a whole. In addition, the ability to innovate and be competitive internationally is going to depend largely on a strong set of high level skills in the labour market. Therefore in order to minimize the threats and take advantage of potential opportunities, skills planning needs to include a focus on high level skills (up to PhD level). 2) In addition to the above, the trend over the last couple of decades has been one of capital investment in place of labour and that the labour being replaced is predominantly semi and unskilled labourers. This has been shifting the overall structure of the skills demanded towards intermediate and high level skills. Since this trend is unlikely to reverse in the future, it is important to create interventions to minimize the impact on workers. Career paths need to be established so that existing employees can graduate into higher level occupations. 3) The ability to grow into new markets in the future is going to be strongly related to the levels of innovation in the sector. Therefore R&D is going to be critical to the growth and competitiveness of the sector in the future. It is recommended that an in depth study into how to best stimulate R&D and the nature of that research needs to be conducted. 4) Partnerships with and between academic institutions will be key in developing R&D capability as well as bridging the gap between skills supplied by institutions and those demanded by industry. 5) Partnerships between providers will ensure that both scale and tailored needs of the sector can be accommodated, as circumstances dictate. A broad framework for how these partnerships will be implemented needs to be developed by CHIETA, but each sub-sector and each geographic locale’s needs will determine the final model that is put into place. 6) It was found that in many occupations, both artisans and operators, that there is a relative low proportion of young employees (younger than 25). This has implications in terms of the skills pipeline and that if not adequately addressed will lead to increased scarcity in the future. The root of the problem is either that there are not enough graduates being provided by institutions or that the graduates are not considered suitable and that employers prefer to pay a premium for more experienced workers. Through partnerships to increase the work readiness of graduates and additional support to increase the number of graduates, this potential problem can be averted or at least minimised. 9 The Chapter is work in progress and will be finalised and after comments from stakeholders. Strategic Plan 66 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 7) It is recommended that CHIETA review existing designated trades to ensure alignment with the OFO. This will facilitate improved monitoring of the effectiveness of CHIETA strategies in addressing shortages in those occupations that are critical to the sector. 8) Keep abreast of how changes in environmental policy will affect the sector. While new jobs will be created, most of the gaps will be critical skills and thus the CHIETA needs to be proactive in developing programmes to fill gaps. 9) Career guidance or the lack thereof remains a key driver of scarcity especially in subsector specific occupations. Often the information regarding a given occupation reaches a learner after the decision to take specific subjects has been made. The current strategic plan provides for the attainment of the above to a large extent. However, policy and guidelines are still pending for the operationalisation of some of the issues. Although priorities can be identified within the scarce skills presented in the SSP, stakeholders still expect their company specific needs to be directly reflected in the SSP. Practically, many of these needs can be met once the CHIETA’s operational policy on PIVOTAL grants is established and understood by employers. The scarce skills list should ideally focus on needs that are widespread within the sector broadly, so that the development of generic competencies (such as an engineer, or an electrician) can form a foundation for the development of specialist skills within each sub-sector. Overall, employment trends in the sector are in decline. The main areas where opportunities for employment still prevail are in high and medium skilled occupations. At the same time, employers are not satisfied with the quality of graduates emerging from training programmes currently available. The strategic position of the CHIETA is to facilitate the bridging of these gaps. Strategic Plan 67 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Bibliography AMTS report vol 1.doc (2004) A National Advanced Manufacturing Technology Strategy for South Africa AMTS, Chemical Sector Task Team (2008) Chemical Sector CAIA (2009) Submission to the Parliamentary Portfolio Committee on Water and Environmental Affairs Climate Change CHIETA (2010) Questions for PESTEL Discussion DoL (2008) South African Chemical Sector Report on Skills Development and the Government’s New Economic Policy Priorities Delloite (2010) The Chemical Multiverse: Preparing for quantum changes in the global chemical industry. Department of Energy (2011) Budget Speech. Cape Town Department of Education (2008), Education Statistics in South Africa 2008 Department of Basic Education (2010), Education Statistics in South Africa 2009 Department of Higher Education & Training (2011), HEMIS 2010 Department of Environmental Affairs (2010). Measurable Performance and Accountable Delivery: Performance Agreement between the President of the Republic of South Africa and the Minister of Water and Environmental Affairs. Department of Environmental Affairs (2010) Green Economy Summit Report Department of Higher Education and Training (2009) , FET Colleges Report 2009 Department of Minerals and Energy (2007) Biofuels Industrial Strategy of the Republic of South Africa. Pretoria Department of Trade and Industry (2011) The South African pharmaceutical sector profile for designation in terms of the PPPFA. Pretoria Department of Trade and Industry (2011) Human Capital Outlook Implications for Skills Development in the Pharmaceutical Sector. Pretoria Engineering News (2010) Poor Rail Infrastructure Weighs on Chemicals Sector (www.engineeringnews.co.za/.../poor-rail-infrastructure-weighs-on-chemicals-sector-2010-03-19 Accessed 20.08.10) European Chemical Industry Council (2011) Chemical Trends Report. Brussels European Research Area (2009) Rejuvenating the Chemicals Sector: Sustainable chemistry as a catalyst for change. Brussels GIZ (2011) Skills Development for Green Jobs Gnavitas (2009) African People in the Western Cape, Cape Town ILO (2006), Vocational education and training in the chemical industry in India, Geneva OECD (2001) Environmental Outlook for the Chemicals Industry. Paris Bibliography 68 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Patel (2008) Sectoral Innovation Systems in Europe: Monitoring, Analysing Trends and Identifying Challenges in the Chemical Sector. Europe Innova Petro SA (2010) Project Mthombo a world class refinery in Africa Redpeg (n.d.) Redpeg’s HIV/AIDS in the Workplace Programme (www.redpeg.co.za accessed 20.08.10)Review and Summarised Financial Information 2009 Statistics South Afirca (2011) Manufacturing: Production and Sales (Preliminary). Pretoria South Africa Info (2008) South Africa's Chemicals Industry Sasol (2010) Project Mafutha Briefing Note ( http://www.southafrica.info/business/economy/sectors/chemical-sector.htm Accessed 23.08.10) The dti (2007) Industrial Policy Action Plan (IPAP) The dti National Industrial Policy Framework (NIPF) The dti (2010) Industrial Policy Action Plan (IPAP) The dti (n.d.) The Chemical Industry Sector (http://www.dti.gov.za/publications/chemicals.htm Accessed 23.08.10) Bibliography 69 Appendices Appendix A: Environmental Initiatives of the PFG Group Environmental Initiatives Initiative Skills and Knowledge Target Learning needed Programme Required 1 Retain ISO 14001:2004 Basic Awareness of All In-house accreditation Requirements and Policy Employees training and programme Contractors Disposal Instructions / Departmental In-house Procedures Managers training programme Interpretation of Material Personnel Handling Safety Data Sheets handling Hazardous chemicals Chemicals; In-house training programme Detailed knowledge of SHERQ SAQI ISO Standard Personnel 14001:2004 Course Internal Auditor Skills SHERQ SAQI Personnel Internal Auditor Course 2 Member of the Air Quality Air Quality Act SHERQ Seminar Forum Manager 3 War-on-Waste Segregation and All In-house Recycling of Waste Employees training and programme Contractors Contaminants to the All In-house Glassmaking Process Employees training and programme Contractors 4 Recycle cardboard spacers General Awareness All In-house and cullet (broken glass) Employees training and programme Contractors Specific cullet bin Forklift In-house locations Drivers and training Batch Plant programme Personnel 5 Reclaim broken windscreens Tasks related to the Windscreen In-house Strategic Plan 70 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 process Plant training Employees programme Initiative Skills and Knowledge Target Learning needed Programme Required 6 Clean-up after rebuild of None SP3 glass manufacturing line: Redundant Refractory bricks – sold to Company that crush and re-use to manufacture bricks 7 Converted glass melting Maintain gas firing Masons and End User Gas furnaces from using Heavy equipment Plumbers Certification Fuel Oil to cleaner Natural (SANS 329) Gas and electricity Combustion Engineers SAPGA Technology Process Conference Technologists Correct gas:air ratio Furnace In-house and fuel settings to use Process training Controllers programme 8 Maintain waste water Sampling Points Laboratory In-house quality within the Legal Standards Personnel training Requirements set out by programme Council Safe disposal of liquids Artisans In-house (solvents, oil, etc.) training programme 9 Reduce glass making Raw Batch Plant Process Batch Plant Chemical Material Waste by Maintain Control Process Operations good practices during Controllers NQF 1 and In- mixing process house training programme 10 Sell reject / contaminated None glass making raw materials and cullet (broken glass) 11 Energy savings drive: Electric boost will only None be used with Senior Management approval; General All In-house Switch off non-critical Awareness Employees communic air-conditioners and ation office lights Initiative Skills and Knowledge Target Learning needed Programme Required 12 Utilize road transport Correct truck Personnel In-house more effectively by: loading procedure; from the training following Appendices 71 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Load truck to allowed Optimize loads and departments: programme; maximum capacity return loads Logistics Legislative (reduction on part Legislation with Production Workshops; loads); regard to road Planning Fundamentals Use trucks to transport, foreign Customer of Demand transport cullet, exchange and Care / Forecasting dolomite and broken demurrage costs Sales windscreens on their return trips 13 Utilize semi-closed and Water systems Plumbers In-house training closed water systems to Water quality / Laboratory programme supply cooling water to chemical dosing Technicia required equipment ns 14 Remove alien vegetation None and trees. Replaced with indigenous trees Appendices 72 Appendix B: SAPIA ENVIRONMENTAL INPUT Annexure 4: SAPIA Environmental Input for 2011-2016 SSP Section C: Sector Skills Plan Environmental skill requirements Please indicate your choice through an arrow or tick next to the relevant statement 5.1. What the the key environmental drivers for the petroleum industry for 2011 - 2016? 1. Stakeholders concerns 2. Corporate citizenship 3. Government regulations 4. Sustainability (Economic, Social and Environmental factors) 5.2 Identify all the key pieces of legislation that will regulate and impact the petroleum industry between 2011 - 2016? 1. Air Quality Act. 2. Waste Management Act. 3. Green paper on climate change. 4. National Environmental Management Amendment Act. 5. White Paper on integrated pollution and Waste Management; 6. National Water Act; 7. Municipal Bylaws on Health and Water 8. EIA (Environmental Impact Assessment) 5.3 What are key barriers to achieving environmental sustainability in the industry between 2011 to 2016? 1. Human resources (lack of required skills)/ Available training and experienced staff. 2. People resources in context of a downsizing SA petroleum industry 3. Third party factor (contractors, suppliers, NGO's etc) 4.Legislative requirements changing too fast 5. Finance 6. Prioritiesing in an environmental business plan 7. Environmental Awareness 5.4 Do you believe that the focus on an environmentally friendly approach will affect skills? Yes Yes No Do not know 5.5 If yes, do you think that this focus will create new occupations or new skills for existing occupations? New occupations that require a new qualification New skills in existing occupations Both Yes Strategic Plan 73 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Do not know 5.6 If you indicated that you think that it will lead to new occupations in Q 5.2, please identify the occupations, estimated demand, interventions and NQF level. Estimated Estimated demand Occupation demand for 2012- Intervention required for 2011-2012 2016 Environmental Laws To be established New employment Energy and climate change To be established New employment 5.4 If you indicated that you think it will lead to new skills in existing occupations, please identify the occupations,skills gaps, interventions and NQF level. Intervention Occupation Skills gap NQF level required Process efficiency Engineering processes Training Postgraduate and design Validation and Training Short courses Sustainability & Energy efficiency verification Managers Waste Training Short courses management Groundwater and Training Short courses Environmental managers Soil Contamination Effluent and Training Short courses stormwater control Appendices 74 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Air Pollution Control and specialised subcourses eg Training Short courses Dispersion Modelling, Abatement Environmental Impact Training Short courses Assessment Environmental Training Short courses Law Environmental Management Training Short courses Systems and Assurance Environmental Monitoring, Data Training Short courses handling and reporting Emergency Response, incident Training Short courses investigation and spill prevention and control Product Product steward Training Short courses stewardship Appendices 75 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Refinergy energy Refinery Technical manager efficiency Training Short courses management HSEQ Managers Sustainability Managers Energy Efficiency Managers Environmental Scientists Botanists Appendices 76 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Appendix C: Petro SA SKILLS FRAMEWORK FOR PROECT MTHOMBO SKILLS DEVELOPMENT FRAMEWORK PROJECT MTHOMBO The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07 Skills Requirements Framework • The skills required for the project from FEED to Operations were detailed. • Skills Clusters were used when identifying required skills • The skills were grouped in terms of scarcity and criticality • The table below indicates the skills deemed critical and scarce for Mthombo Mission Critical Positions Chief Mechanic Chief Electrician Manager: Planning and Optimisation Operations Engineer Manager Strategy Principal Process Engineer Process Optimisation Manager LP Modellers Engineering Manager/Supervisor Manager: Economic and Schedulers Production Planner Manager Business Analysis Control system engineer Engineering Manager Project Director Refractory Specialist Cost Engineers Project Managers The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07 Appendices 77 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Identified Skills Clusters • Operations/ Production • Engineering Maintenance • SHEQ • Finance • Human Capital • Information Technology • Legal • Supply Chain Management • Corporate Communications • Construction Management (Resources will not migrate to Operations phase) The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07 Primary Research Skills Availability- External Percentage of employees on surveyed databases, available by Function. The information was sourced from Recruitment Agencies Databases The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07 Appendices 78 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Primary Research Skills Availability- External Limited availability of senior and junior skills in core Functional areas poses a risk. Note: Some support functions (IT, Legal and Corporate Communications) did not have a big enough sample to provide valid results The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07 Appendices 79 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Appendix D – The human capital requirements of the IPAP2 Table 1: Key Specialisations for API Manufacturing Process Area Specialisation Qualification Process Development Synthetic (Process) Chemistry PhD, MSc Biosynthesis PhD, MSc Physical Chemistry BSc, Diploma Process Microbiology MSc, BSc, Diploma Organic Chemical Technology MSc Process Engineering PhD Analytical Research MSc, BSc, Diploma Process Design PhD Process Chemistry PhD, MSc Process Design Process Microbiology PhD, MSc Analytical R&D PhD Technology Transfer Chemistry BSc Manufacturing and Controls BSc Regulatory Affairs Technology Transfer Pharmacy BSc MSc Process Engineering MSc, BSc, Diploma Analytical Chemistry MSc, BSc, Diploma Equipment Validation Engineering BSc Validation Process Validation MSc, BSc, Diploma Cleaning Validation BSc, Diploma Computerized Systems BSc Validation MSc, BSc Analytical Chemistry BSc, Diploma Quality Assurance and Control 10 Q7A Knowledge BSc Chemical Engineering BSc Organic Chemistry PhD, MSc Process Engineering MSc Microbiology MSc Plant Operations/Manufacturing Chemical Operators BSc, Diploma Environmental Engineering BSc Operational Safety and BSc, Diploma Industrial hygiene Pharmacy BSc Electrical Engineering BSc Plant Maintenance Mechanical Engineering BSc 10 Good Manufacturing Practices for Active Pharmaceutical Ingredients , basic requirements Appendices 80 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Process Area Specialisation Qualification Electronics MSc, BSc Project Management BA, MBA Management Materials Management BA, MBA IP management/licensing BA, MBA Table 2: Skills requirement for Biotechnology Process Areas Specialisation Academic qualifications Process Development Molecular Biology MSc Process Engineering BSc Analytical Chemistry MSc, BSc, Dipl Microbiology MSc, Bsc, Dipl Pharmacy BSc Biochemistry BSc, Dipl Process Design Process Engineering BSc Biotechnology Engineering PhD Technology Transfer PhD, MSc Microbiology BSc, Dipl Regulatory Affairs Pharmacy BSc Chemistry Technology transfer Validation Process Engineering BSc Analytical Chemistry BSc Equipment Validation Engineering BSc Process Validation MSc, BSc Cleaning Validation BSc, dipl Computerized Systems Validation BSc Quality Assurance/Control Analytical Chemistry BSc, Dipl Biochemistry BSc, Dipl Plant Operations/Manufacturing Pharmacy BSc Fermentation PhD, MSc, BSc Purification PhD, MSc, BSc, Dipl Process Engineering MSc, BSc Chemical Engineering BSc Molecular Biology MSc, Dipl Plant Maintenance Electrical Engineering BSc Mechanical Engineering BSc Electronics BSc Management Project Management BA, MBA Appendices 81 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Process Areas Specialisation Academic qualifications Materials Management BA, MBA IP management/licensing BA.MBA Appendices 82 Chemical Industries Sector Education and Training Authority Sector Skills Plan 2011-2016 Appendix E – Learnerships in the Chemical Sector LEARNERSHIP NAME Analytical Chemist Technician Bachelor Of Technology: Engineering: Chemical Chemical Boilermaker Chemical Boilermaker (Pipe Assembly And Structural Steel) Chemical Electrician (First Line Maintenance / Installation Electrician) Chemical Electrician NQF 3 Chemical Electrician NQF 4 Chemical Fitter (First Line Maintenance) Chemical Fitter NQF 3 Chemical Fitter NQF 4 Chemical Glass Container Operator Chemical Instrument Mechanic NQF 3 Chemical Instrument Mechanician Chemical Instrument Mechanician NQF 4 Chemical Manufacturing Operator Chemical Operations Level 1 (Abet) Chemical Operator Level 1 (National Certificate In Chemical Operations) Chemical Operator Level 2 (National Certificate In Chemical Operations) Chemical Operator Level 3 (National Certificate In Chemical Operations) Chemical Rigger (Limited To 30 Ton Center Mount Crane And 5000 Kg Load) Chemical Rigger NQF 3 Chemical Rigger NQF4 Chemical Turner (Centre Lathe) Chemical Turner NQF 3 Chemical Turner NQF 4 Chemical Welder Chemical Welder NQF 3 Chemical Welder NQF 4 Glass Container Former Glass Container Product Line Controller Manufacturing And Assembly Operations Supervisor National Certificate: Chemical Manufacturing National Certificate Professional Driving National Certificate: Chemical Process Operations - Chemical Operator National Certificate: Construction: Plant Operations National Certificate: Team Leader National Diploma In Chemical Engineering New Venture Creation (SMME) Pharmacists Assistant Basic Post Basic Pharmacist Assistant Learnership Technician: Electrical Engineering Technician: Mechanical Engineering Technician: Polymer Technology (Surface ) Grand Total Source: CHIETA database Appendices 83