South Africa's catalytic converter manufacturing industry is facing a major headache as it has reached an impasse with the government over incentives.

The Department of Trade and Industry (DTI) has suggested that it cannot improve its current offer under the Automotive Production and Development Programme (APDP).

However, the Catalytic Converter Interest Group (CCIG) has now warned that contract losses and plant closures will ensue if a more suitable arrangement cannot be thrashed out.

At present, the industry receives incentives as part of the Motor Industry Development Programme, but this is set to be replaced by a new deal when the APDP arrives in 2013.

CCIG Chairman Paul Thompson, who is also Johnson Matthey's Commercial Manager for South Africa, revealed that R10 billion in new contracts has already been lost in the past 12 to 18 months.

He explained that a number of major replacement product sourcing decisions are on the horizon in the next three to six months, with South Africa set to lose out if it has insufficient support.

Nimrod Zalk, Deputy Director General for Industry Policy at the DTI, confirmed that the APDP will not offer the same level of incentives as the MIDP has provided.

However, he also told Engineering News Online that the DTI is prepared to meet the catalytic converter industry halfway and now needs the sector to demonstrate more competition.

South Africa exported 9.9 million catalytic converters - which reduce harmful emissions from automobiles with the help of pgms - in 2009, which was a decline of 43 per cent from the previous year.

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Catalytic converter industry and DTI at incentives impasse (05/08/10)

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