Will manufacturing shift from China to Africa?
"I know of one company, and only one at this point, that has moved their manufacturing operations from China to Africa."
In 2000, when William Hickey, president and CEO of US-based packaging company Sealed Air, took a long-term view on the future of his company, he predicted that by 2050 Africa would have replaced China as the world’s manufacturing hub.
“Eleven years later I think we are behind . . . 2050 becomes a challenge [but] I still think it is doable,” Hickey said during a session at the recent World Economic Forum on Africa, held in Cape Town.
Headquartered in New Jersey, Sealed Air manufactures a wide range of packaging materials and equipment for the food, industrial, medical and consumer industries. The New York Stock Exchange listed company has a presence across the world, including Africa.
“I know of one company, and only one at this point, that has moved their manufacturing operations from China to Africa. I thought that would be the tipping point, but that was six years ago and I know of no other customer of ours that has moved its manufacturing from China to Africa,” Hickey noted.
He said Africa’s manufacturing sector faces numerous challenges, including a shortage of skills; rigid labour laws; inadequate electricity supply; cumbersome and expensive transport within the continent; low levels of productivity; political instability; and corruption.
Hickey, however, remains an optimist on Africa. “But I’m hopeful, we are prepared to invest, and we are prepared to help the continent . . . to overcome [these] issues.”