DRAFT CHIETA SSP 2011 TO 2016 by z319zP

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									  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


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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


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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.



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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.



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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


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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




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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:



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         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.

1.2.1.1 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

1.2.1.2 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.

1.2.1.3 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.

1.2.1.4 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



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          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.

1.2.1.5 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.
1.2.1.6 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.

1.2.1.7 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.

1.2.1.8 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


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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)




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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.

1.3.1.1 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



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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.

1.3.1.2 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.



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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.

1.3.2.3 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



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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).

1.3.2.4 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.



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          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,

1.3.2.5 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.




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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.


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          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).


1.3.2.6 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.


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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



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domestic and international linkages and networks, improve worker skills, access appropriate
technologies, and adopt new marketing strategies.




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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.


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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).




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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


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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



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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



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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



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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%).




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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%.


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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.




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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)




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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.




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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)




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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



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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.




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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


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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


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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.




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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:




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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


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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.




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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




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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.




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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.




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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.


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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.




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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.




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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.




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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




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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



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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.




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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




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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



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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



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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



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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.




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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




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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




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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.




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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.



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   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.


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   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


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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.




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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).




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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.’




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 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




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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




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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.




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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




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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.


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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.




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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


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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

								
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