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August 2020 : 50 Years of Manufacturing Sector - Backbone of Mauritian Economy

Dear Readers,

We are celebrating this year the 50th anniversary of the manufacturing sector in Mauritius. This edition of our monthly e-newsletter focuses on the achievements and opportunities of this key pillar of the Mauritian economy while addressing the new challenges it is facing today.

Over the past five decades, the manufacturing sector has played an instrumental role in the economic diversification and transformation of Mauritius from a monocrop to a broad-based and forward-looking economy.   Today, Mauritius has consolidated its reputation as a high quality and reliable supplier. In addition, through a successful combination of trade, investment, and industrialization strategies, Mauritius has expanded its customer base.  As a well anchored backbone of our economy, the manufacturing sector generates a significant multiplier effect on various other sectors. In fact, the sector contributes to 12.5 percent of our GDP and provides employment to nearly 71,000 people. 

A Buoyant & Thriving Industry

By virtue of our preferential market access (namely COMESA, SADC, IOC, EPA, AGOA), Mauritius exports 1,500 product lines to over 100 countries - thus testifying the relevance of this sector in sustaining the buoyancy of our economy.  We have developed a competitive edge in textile and apparel, sugar cane, seafood industry, and more recently, the wine and spirits segments, which are all contributing to our diversified manufacturing base. We have also harnessed new segments such as medical devices, pharmaceutical products, technical textiles, high-end jewellery, precision engineering, and optical products.

The manufacturing sector is witnessing transformations on major fronts with a transition from traditional manufacturing to higher value-added activities.  In this perspective, Mauritius is positioning itself as a centre of excellence for garment manufacturing and has secured the trust of major fashion houses in Europe, USA, and South Africa.  Mauritius is also serving as a trading platform for the export and re-export of commodities to the African market.

In line with its new digital transformation strategy, the Economic Development Board has successfully hosted a series of key webinars on the manufacturing sector.  These virtual activities aim at attracting the interest of potential investors as part of our global strategy to keep our stakeholders abreast of economic development and business opportunities.

However, the whirlwinds of the COVID-19 pandemic have quaked the bases on which we have built the sector.  These disruptions stem from issues such as travel ban, labour immobility, limited access to imported raw materials, cancellation of orders, amongst others.  Accordingly, this crisis has prompted local manufacturers to unleash new strategies to respond to the changing business landscape while tapping into new business opportunities such as the production of face masks, face shields, and medical gowns to help tackle the shortages faced by healthcare providers in the fight against COVID-19. 

Embracing Sustainable Manufacturing

With the shift to sustainable consumption patterns, Mauritius is committed to promote sustainability at all levels of its manufacturing process while encouraging efficient use of resources.  Going forward, we maintain our resolve to support sustainable manufacturing while keeping the ecological stewardship at heart.   In view of accelerating this transformational change, governmental and international bodies are converging efforts towards this noble cause to reduce the social and economic impact on the planet. The new dynamism engendered by sustainable manufacturing is also driving companies to become more eco-friendly by using recycled products, renewable energy sources, less harmful dyes and chemicals, and more sophisticated technologies.

Mauritius is no exception and is increasingly motivated to be more environmentally conscious. Over the years, our flagship companies have invested massively to keep abreast of these transformational changes.  As the world economic agenda lays emphasis on protection of our planet, consumers are also showing an increased preference for sustainability. This has positively affected the supply chain with manufacturers responding to the exigencies of a new generation of consumers. Today, a number of manufacturers are eager to adopt and adhere to norms such as the ISO 14000, GOTS, REACH, amongst others.

We are also pleased to share that EDB has hired the services of Carlin, an International Trend Forecaster, to develop a collection of sustainable apparel products which will be showcased as ‘100 % Responsible’ apparel products, made with care from Mauritius. This is in line with the policy of Mauritius as a Small Island Developing State (SIDS).

We are also keeping an eye on the future of the sector. The EDB is working with the World Bank to develop a strategic plan for manufacturing, which will chart the way forward for the sector and for our local entrepreneurs.

Technology, an Enabler to Unlock Innovation in the Manufacturing Sector

Today, with the emergence of new trends and continuous innovation, technology plays a pivotal role in all spheres of business activities.  It is no more regarded as a conventional enabler but has gained another dimension, embedded in the core of business activities and functions. Hence, amidst the persistent global uncertainties, the Government is determined to revitalise the manufacturing industry through a revamping of its current model by developing an ecosystem which will foster automation and robotics within the manufacturing cluster. 

To further entrench our competitive edge and propel the sector to its next level of development, it is imperative to integrate R&D in manufacturing and adopt latest digital technologies such as Artificial Intelligence (AI) as well as high precision engineering. 

Looking ahead, AI will play a significant role in providing real-time problem-solving and optimisation of processes and resources which will enable manufacturers to achieve cost savings, detect repairs and reduce down time.  The country will capitalise on disruptive technologies to bolster its competitiveness and unlock innovative solutions, which will play an instrumental role in positioning Mauritius as a modern and sophisticated investment and trade hub. 

Sustainable manufacturing will therefore pave the way for the creation of highly skilled knowledge and technology-intensive jobs in disciplines such as engineering and R&D. This new era will see the emergence of technical professions in the fields of technological audit, digital marketing, data analysis, big data management, interface design and ICT.  As such, the industry will move from low-skilled labour to a high-skilled workforce and is well-positioned to attract the youth for challenging and promising careers.

In the same endeavour, the National Budget 2019/2020 enunciated a bolstering plan to enhance manufacturing capabilities through the adoption of international best practices, re-engineering of processes, investing in smart technology, and adherence to international standards.  Moreover, to mitigate the adverse impact of the COVID-19 pandemic on local economic operators, the Freight Rebate Scheme (Sea) and the Trade Promotion & Marketing Scheme (Air), which are managed by the EDB, have been extended to include new markets.  The Export Credit Insurance Scheme has also been renewed and extended to all countries as per the Budget 2020-2021 which is effective for exports worldwide from 1st July 2020 to 30th June 2023.

New Manufacturing Landscape

The degree of success of this industry will be defined by the operational agility of operators to find and seize opportunities to improve their operations.  The future will rest upon the foresightedness and proactiveness of entrepreneurs and companies who will exploit emerging business opportunities to weather the market shift and maintain a competitive edge. The next phase of transformation is well under way. New business models will make extensive use of technology and will focus on shorter lead time, fast fashion, smaller runs, higher value-added products, and catalyse the adoption of e-commerce.

To conclude, this famous quote of an American author epitomises the spirit of the Mauritian society and their united efforts to overcome difficult times and rebound stronger, ‘the secret of change is to focus all your energy,
not on fighting the old, but on building the new’.

Mr. Hemraj Ramnial, CSK
Chairman

 

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