Dawn of Digitalization and its impact in Africa - Siemens Digital Industries South Africa
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Siemens Digital Industries South Africa
Dawn of Digitalization and its impact in Africa
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3 - Foreword
4 - Introduction
15 - Food & Beverage
23 - Minerals & Mining
30 - Water & Wastewater
39 - Manufacturing & Infastructure
45 - Conclusion
2
Foreword
Digitalization is changing the way the world manufacturing industry, the risk remains of continuing 3 - Foreword
operates –impacting different spheres of human a path of non-industrialization.
existence from houses to personal devices and
ranging to complex manufacturing and industrial In the mining industry we are witnessing subdued
processes. Digitalization has been witnessing a investment, rising cost pressures and increasing labour
rapid adoption and is completely transforming the issues, a combination of mechanisation, efficient 4 - Introduction
way businesses operate while defining new rules extraction of resources and better use of data can
of competitive excellence. make it easier for mine operators to cut costs and
create a leaner and more efficient mining operation.
The adoption of digital technologies, the speed of As such, the successful incorporation of technology
innovation as well as the range of digital offerings will be possible through collaborative efforts of
are expected to remain varied across industries, technology providers, industry, research institutes 15 - Food & Beverage
markets and geographies. The extent and impact of and organisations that work for uplifting the mining
digital technologies is also expected to vary, favouring industry.
businesses and industries that seek relevance and
increasing contribution in international markets in In the water industry, expenditure in water
addition to existing domestic markets. infrastructure has been low when compared to
the global average. Inadequate investment in 23 - Minerals & Mining
While advanced analytics and digitalization are infrastructure coupled with poor water utility
witnessing growing adoption across certain industry management has resulted in a greater need for
sectors, such as the automotive sector, there is a real development of the water sector. However, countries
opportunity for adoption of these across sectors such have started taking cognizance of the necessity for
as mining and food & beverage which are significant improvement in water utility management. Digital 30 - Water & Wastewater
contributors to major African economies. and automation solutions are critical to tackle cost
pressures and enhance asset performance while
It is against this backdrop that Siemens has addressing issues pertaining to water resource
collaborated with an external service provider to availability and relatively high levels of non-revenue
conduct an assessment of Digitalization and its impact water.
on Africa. The report outlines the current state of 39 - Manufacturing & Infastructure
key industries across the continent and identifies For the first time in history we have an incredible
challenges and opportunities. opportunity to use smart technology to transform
entire economies at an unprecedented rate. Africa
Manufacturing, while the most mature sector in its needs to get efficient strategies in place now in order
transformation and adoption of digital technologies to succeed. The findings from the study are just a 45 - Conclusion
in Africa, remains a marginal player, struggling to starting point. We hope we can begin a dialogue and
make a bigger impact on country GDPs. Failing to pro- provide a frame to some of the unique opportunities
actively select and position Africa within the global that exist.
Ralf Leinen
Senior Vice President: Digital Industries
Southern and Eastern Africa
3
Introduction
Siemens supports digital transformation with a range of services
from consulting through to implementation.
We support our customers on the path to digitalization – from
consulting on strategies for industrial digitalization through to
supporting in the implementation and optimization of digital
solutions.
Consulting is based on a thorough evaluation of the digital readiness
of the company, which is carried out by digitalization experts
together with the customer.
Together we determine the existing level of digitalization at
the relevant company and from there we develop a tailored
digitalization strategy for the customer together with a roadmap.
4
Continue
Introduction
How do I derive
How
How do I derive business value?
do
business
I derivevalue
business value
How do I derive How do business
I derivevalue
business value
Speed Speed
Flexibility Quality
Flexibility Efficiency
Quality Efficiency
Speed Speed
Flexibility Quality
Flexibility Efficiency
Quality Efficiency
The digital transformation isThegaining
digitalmomentum.
transformation Companies
is gainingaremomentum.
already unlocking
Companies are already unlocking
this potential - by using end-to-end
this potential
digitalization.
- by usingSiemens
end-to-end
has the
digitalization.
domain expertise
Siemens has the domain expertise
The digital transformation isThegaining
digitalmomentum.
transformation Companies
is gainingaremomentum.
already unlocking
Companies are already unlocking
in industry verticals as well in
as industry
the engineering
verticalsandas well
digital
as the
know-how
engineering
to generate
and digital know-how to generate
this potential - by using end-to-end
this potential
digitalization.
- by usingSiemens
end-to-endhas the
digitalization.
domain expertise
Siemens has the domain expertise
performance improvementsperformance
across the entire
improvements
value chain. across the entire value chain.
in industry verticals as well in
as industry
the engineering
verticalsandas well
digital
as the
know-how
engineering
to generate
and digital know-how to generate
Siemens solutions shorten time-to-market
Siemens
performance improvementsperformance solutions
across the entireand shorten
increase
improvements time-to-market
flexibility,
value chain.across the entire valueefficiency.
quality,
and and
increase flexibility, quality, and efficiency.
chain.
They enable new business models
They enable
whilenewassuring
business
highest
models
levelswhile
of cybersecurity.
assuring highest levels of cybersecurity.
Siemens solutions shorten time-to-market
Siemens solutions andshorten
increasetime-to-market
flexibility, quality,
andand
increase
efficiency.
flexibility, quality, and efficiency.
Two core elements of end-to-end
Two
They enable new business models core
digitalization
They enable elements
whilenewassuring of
solutions
end-to-end
business
highest are:
models digitalization
levels
while assuring highestare:
solutions
of cybersecurity. levels of cybersecurity.
• MindSphere – Cloud-based, • MindSphere
open Internet – Cloud-based,
of Things operating
open Internet
system of Things operating system
Two core elements of end-to-end
Two coredigitalization
elements of solutions
end-to-end
are: digitalization solutions are:
• Digital Twin – Virtual representations
• Digital Twin of –product
Virtual and
representations
production of product and production
• MindSphere – Cloud-based, • MindSphere
open Internet – Cloud-based,
of Things operating
open Internet
system of Things operating system
5
• Digital Twin – Virtual representations
• Digital Twin of –product
Virtual and
representations
production of product and production
Continue
Introduction MindSphere
Connecting devices and applications via the cloud
MindSphere: Connecting devices and applications via the cloud
MindSphere is Siemens’ cloud-based, open Internet of Things operating system, connecting real objects to the digital world. By applying
advanced analytics, MindSphere enables you to harness value from the wealth of data.
MindSphere is Siemens’ cloud-based, open Internet of Things operating system, connecting real objects to the digital
MindSphere enables the
world. By applying development
advanced of powerful
analytics, MindSphereindustry applications
enables you to (MindApps) andfrom
harness value digital
theservices
wealthtoof
drive business
data. innovation. Its
MindSphere
open 'Platform as a Service' capabilities enable a rich partner ecosystem for applications and services. To protect your company's assets
enables the development of powerful industry applications (MindApps) and digital services to drive business innovation.
and intellectual property, MindSphere adheres to the strictest cybersecurity standards.
Its open ‘Platform as a Service’ capabilities enable a rich partner ecosystem for applications and services. To protect your
company’s assets and intellectual property, MindSphere adheres to the strictest cybersecurity standards.
Applications
and services
Cloud layer
MindSphere
Connected
devices
Festo – Condition monitoring services
Consumption transparency is the starting point for predictive maintenance. For Festo, the German control and automation
company, Siemens provides MindSphere solutions which gather real-time data right from the plant. Energy savings of up
to 30% compared to existing plants of similar functionality can be realized.
Festo – Condition monitoring services
6 Click here
to know
Continue
Consumption transparency is the starting point for predictive maintenance. For Festo, the German control and automation
Introduction
Digital Twin: Feedback insights to continuously
improve product and production in the real world
Digital Twin Digital Twin Digital Twin
Product Production Performance
Insights from performance with MindSphere
Verifica(on Valida(on
Virtual Virtual Real
Ideal Real
product production production product
delivery
Automation
Specifica(on Commissioning
Continuous improvement
Collaboration platform: Teamcenter
Maserati – Boosting Product Design and Development
Digitalization starts with the design of a product. Maserati uses the CAD software NX for the Digital Twin to virtually
create, simulate, and test their cars, significantly reducing the number of prototypes needed. In combination with the
collaboration platform Teamcenter, the Maserati engineers manage their project collaboratively across various locations.
The result: shortened time-to-market from 30 months to 16 months.
7
Continue
Introduction
Siemens serves industrial verticals in a dedicated
Siemens serves manner
industry verticals in a dedicated manner
Aerospace & Defence Automotive
Battery Manufacturing Chemicals & Petrochemicals
Cranes Data Centers
Distributors Fiber Industry
Food & Beverage Glass
Machinery & Plant Construction Marine & Shipbuilding
Minerals – Mining & Cement Municipalities & DSOs
Oil & Gas Panel Building
Pharmaceuticals Ports
Power Utilities Smart Cities
Solar Transportation & Logistics
Tyre Industry Water
8 Wind Continue
Introduction
Africa: An emerging growth destination with a need for digital evolution
Decentralisation Sustainable Buildings
South African overview and trends
Digital Transformation Lowering Commodity Prices
Overall Digitalization – Prominent Sub – Sectors,
Current Adoption level South Africa, 2018
and Expected Scenario
Reuse Local Content & Mining, Metals
Manufacturing 2018 & Cement
35% Automobile
increase
Value Added
Manufacturing
Current Skills Shortage
64% Manufacturing
African 2023 Food & Beverage
Production Cost Trends Increasing
Optimization Competition from Key Sector Challenges, South Africa, 2018
SMEs
Electricity supply insecurities and rising tariffs
Industrial Hubs Improved Quality Under utilised capacity, lower productivity and
and Strategic of Products declining global competitiveness
Manufacturing
Industries Price sensitivity of the market leading to lower
adoption of advanced automation and digitalization
Increasing Demand
from FMCG Skill shortages
9
Continue Source: Frost & Silivan
Introduction
Level of automation and digitalization adoption
Level of Automation and Digitalization adoption is expected to
is expected to increase across South Africa
increase across South Africa
End User Segments / Country Rest of Africa South Africa Minerals per industry
Key messages
Autonomous
Minerals Mining Technologies & Efficiency Improvement
Minerals: Metals, Mining, &
Cement Autonomous Mining Technologies & Efficiency Improvement
Oil & Gas
Oil & Gas Future
Oil & Investment
Gas in Infrastructure
Future Investment in Infrastructure
Food & Beverage
Food & Beverage Food & Beverage
Openness to Digitisation makes South Africa a key market
Openness to Digitization makes South Africa a key market
Water and Waste Water Water & Waste Water
Water & Wastewater
Investments
Investmentsto to
improve management
improve of water
management ofutilities
water utilities
Power Generation
Power
PowerGeneration
Generation
Automotive Increasing need
Increasing need to reduce
to reduce transmission
transmission & distribution
& distribution losses losses
Automotive
Automotive
Petrochemicals Greater appetite for digitalisation and Industry 4.0 platforms
Greater appetiteinvestments
with gradual for digitalisation and Industry
governed 4.0 platforms
by demand
Heavy Machinery with gradual investments governed by demand
Heavy Machinery
Heavy Machineryand automation entails reskilling of the workforce
Mechanisation
Motion Control & packaging
Mechanisation and automation entails reskilling of the
Motion Control & Packaging
workforce
Others (Cement, Textiles, Pulp Growing demand for packaged food and beverages
and Paper, Glass)
Motion Control & Packaging
Level of Product presence and market size: Rev (EUR Mn) > 60 31-60 11 -30 1-10 Negligible Growing demand for packaged food and beverages
Source: Frost & Sullivan analysis
Unrestricted © Siemens AG 2019
Page 3 Hanover, April 1, 2019 Klaus Helmrich, Member of the Managing Board of Siemens AG
10
Continue Source: Frost & SilivanIntroduction
Digital transformation expected to be aimed at
Digital selective
improving transformation
processexpected
and OPEXto be
reduction
aimed at improving selective process and OPEX reduction
Digital Transformation Journey
Summary Technology Adoption Stages - End-user
table Segments
Business Impact
Country Early Developing Mature
South
Africa
Kenya NA
Ghana Ethiopia
Ethiopia
Technology Adoption Maturity NA
Early Developing Mature Ghana
Technology Trends
• Asset Performance management NA
Kenya
• Shift from product centric approach to solution centric approach
• Plant Lifecycle Services
NA NA
• Remote monitoring of assets and better visualisation South Africa
NA – Not Applicable Source: Frost & Sullivan analysis
Unrestricted © Siemens AG 2019
Page 4 Hanover, April 1, 2019 Klaus Helmrich, Member of the Managing Board of Siemens AG
11
Continue Source: Frost & SilivanIntroduction
Why Digital
Why Digitalfor Industrial? Volatility and cost pressures
for Industrial?
drives Volatility
acuteand focus on implementing
cost pressures drives acute focus digital
on implementing digital
Headwinds Digital Implications
Capital Efficiency
Managing capital projects operations and
Plan, build and process plant operations lifecycle.
operate economically
Resource Efficiency Knowledge retention and transfer, Managed
services, Field workforce automation and
Skills sortage productivity.
Asset Efficiency
Shorter turnaround/longer run links, Schedule-
Optimize connected based maintenance à Data-driven maintenance.
assets
Unrestricted © Siemens AG 2019
Page 7 Hanover, April 1, 2019 Klaus Helmrich, Member of the Managing Board of Siemens AG
12
Continue Source: Frost & SilivanIntroduction
2019
2019 and and
beyond: Beyond:
Shifts Shifts of Industrial
from industrial Automation
automation Business
business.
Mindsetshifts
Mindset shifts are inevitable
are as customers
inevitable and peers pace
as customers ahead
and peers pace ahead
Digital Enablers
On-Premise à
Connected products
SaaS
Usage-based Connected
Embedded services service services
Business
Models
Focus on business outcomes
Product-as-a- Prescriptive
Enhanced value addition Service services
Outcomes
based
Omni-channel distribution services
Unrestricted © Siemens AG 2019
Page 10 Hanover, April 1, 2019 Klaus Helmrich, Member of the Managing Board of Siemens AG
13
Continue Source: Frost & SilivanIntroduction
South Africa is the strongest positioned of the African 3 - Foreword
South countries
Africa is the
onstrongest
its digitalpositioned of the African
journey, however it lagscountries
behind inon
I4.0its
digitaland
journey, however levels
IIoT adoption it lags behind in 4IR and IIoT adoption levels
4 - Introduction
Digital Transformation Journey
High
Food & Beverage 15 - Food & Beverage
Awareness
Heavy Machinery
Minerals: Metals, Mining, & Cement 23 - Minerals & Mining
Oil & Gas
Technology Adoption Maturity
30 - Water & Wastewater
Water & Waste Water Low Early Developing Mature
SA Stage of Digital Readiness Industry Digitalisation awareness Tech Trends
39 - Manufacturing & Infastructure
Activate High Predictive Maintenance
(the lowest stage of digital
readiness) Medium low Smart Mining
Accelerate
(countries in the middle stage) High Retrofit/Energy Management 45 - Conclusion
Amplify
(those in the highest stage High Pipeline Optimisation/Digital Oil Field
of digital readiness)
Medium Monitoring and Control
Unrestricted © Siemens AG 2019
Page 12 Hanover, April 1, 2019 Klaus Helmrich, Member of the Managing Board of Siemens AG
14
Source: Frost & SilivanFood & Beverage
Enable flexible manufacturing and increase operational efficiency
250 Kcal Per capita Urban population in South Africa - Global Food Raw and processed food
Consumption for Sub Africa is expected to grow Security Index Ranking, contributing 8% of total
Saharan Africa in 2030 to 56% in 2050 45th place South Africa exports
15
Continue
Source: Frost & SullivanFood & Beverage
Both the Food and Beverage sectors are still developing in Africa.
The understanding of automation and how it can assist in process
optimisation exists but the adoption rate is slow
Lowering commodity prices Increasing demand for FMCG
Commodities such as coffee, sugar and tea have The urban population in Africa is expected to
historically driven economies such as Kenya and grow to 56% in 2050, from 35% in 2010. This
Ethiopia. However, the price crash in 2015/16 rapid urbanisation combined with preference
hampered the agricultural sector’s growth in shifts towards formal retail will drive demand
Africa. for FMCG products.
Current
Africa
Trends
Policy facilitating growth of Skills shortages
local manufacturing
Lack of skills at a local level in the industry
High import duties, free trade agreements have often resulted in a reluctance to adopt
and rebates in the form of tax incentives new technologies, due to operation, servicing
are increasingly being adopted to drive and maintenance concerns.
local manufacturing growth.
Increased competition from SMEs
Globally and in Africa, the industry has been dominated by
large multinational players. Examples of local SMEs include
microbreweries in the beverage industry, which has caused an
increase in competition and a slight increase in price sensitivity
due to these microbreweries catering to more niche products.
16
Continue Source: Frost & Sullivan, World Bank**, IMF, SARS, UN Projections*Food & Beverage
South Africa is the strongest positioned of the African countries on
its digital journey, with the Food & Beverage sector showing higher
propensity for advanced automation & digitalization
Digital Transformation & Industry 4.0 Give and take between
automation and job creation
Businesses in South Africa have been investing
steaadily to prepare for the Unemployment has historically plagued
impact of the fourth industrial revolution. African countries, and remains a key
challenge. This has led to an abundance of
low cost unskilled labour, thus slowing down
Emerging the adoption of advanced automation in
Africa Africa.
Value Added Manufacturing
Trends Production Cost Optimisation
Shifting focus from export of raw materials Manufacturing industries are increasing focus
and mineral resources towards development on resource and cost optimisation to improve
of supply chains and industry that add production margins and competitiveness in the
value to these base commodities and raw global markets.
materials. While the current trend is towards utilisation of
However this shift will be slow. existing capabilities, investment in new facilities
is expected to be gradual.
Increasing consumer spend
Africa’s share in global consumer spend by region is expected to grow from 5% in 2012 to
7% in 2022, with spend on Food & Beverage products expected to be one of the key driving
sub-segments of this increased expenditure. While there is an appetite for automation
in Africa, market price sensitivity, low skills and a slow shift towards local value added
manufacturing has led to a slow uptake of advanced automation technologies.
17
Continue Source: Frost & SullivanFood & Beverage
Automation and digitalization are ideal to tackle
cost pressures and traceability limitations
High Product Standards for Food Safety Variegated Regulations
The F&B Industry is characterised by Food regulations vary heavily from region to
stringent standards that manufacturers region: a key pain point for manufacturers
are required to adhere to, automation to keep track of. Monitoring of conformity in
can increase ease of conformation complex organisations can be aided through
to these standards. adoption of IIoT.
Need for Product Traceability Key Slow Product Innovation Cycles
Product record management and Challenges Timely creation and movement of products
across the supply chain with respect to
traceability are vital challenges for the
industry. Increased digitalization provides
in the F&B aligning products to dynamic customer
a means of remedying this challenge. industry demands.
Volatile Market Demands Supply Chain Complexities
A key marker of the industry: extremely Both traceability and labelling result in
volatile and shifting consumer demands. supply chain complexity. Stringent processes
Keeping up with these demand trends will be need to be followed regarding labelling
heavily reliant on ability to adapt, which can be and serialisation of products, while tracking
aided through adoption of IIoT. products through the supply chain remains a
critical issue.
18
Continue Source: Frost & SullivanFood & Beverage
Tracking and monitoring of products within the Food & Beverage industry
presents great potential for the implantation of digital solutions
“With the transformation of the industry through
Appetite for Technology Adoption 2018 industry 4.0, IOT offerings and Digitalization, we are
seeing changes in demands from end users, with
similar adaption to meet these demands from suppliers.
Sector South Africa Kenya Ethiopia Ghana Furthermore, increased digitisation is something I expect
to see much more of in Africa.”
– A Leading OEM
Food
Beverage
“With increasing knowledge on the benefits of
Early Developing Mature automation and digitisation in Africa we’re seeing a
shift from like-for-like replacement to replacement with
the best possible product which also meets technical
specifications. Industry margins are low, hence high
The beverage sector in South South Africa and Kenya The Food Sector in Kenya, efficiency is becoming increasingly important.”
Africa is mature in comparison are expected to be at the Ghana and Ethiopia are still in – An Automation Solution Provider
to the rest of Africa, due to forefront in adopting digital a nascent stage, with a strong
the presence of multinationals platforms for manufacturing. focus placed on agriculture
such as Coca-Cola and In-Bev, Adoption in South Africa will and cultivating raw products. “In my experience this has not always been the case,
who utilize South Africa as however happen at a much There is still little focus on but with more and more pressure to innovate in the
an export hub into the rest of faster rate than in Kenya. agro-processing in these industry I feel we will see greater enthusiasm to adopt
Africa. countries, however these IIoT solutions.”
sectors are growing
– A Beverage Plant Head
19
Continue Source: Frost & SullivanFood & Beverage
Addressing Industry Requirements.
Siemens Solution: SIMATIC PCS 7 with BRAUMAT craft brewing libraries
Features Benefits
• Designed for the beer industry. • Increased production with no further staffing
• Monitoring of brew quality enabled requirements.
through automatically stored production • Improved quality, repeatability and consistency. This is
data and analysis tools. done by automating labour-intensive tasks which have
• Integration of BRAUMAT libraries and historically been done manually.
SIMATIC PCS 7 process control system can • Automation of temperature control to optimise cooling
optimally run any size brewery. efficiency.
• Active Interface. • Reduced energy use related to heating and cooling.
• Reporting and trending capabilities. • Production scheduler helps you easily manage your
• SIMATIC HMI operator interface Production Order List and CIP orders.
• Integrated, user-friendly system for monitoring, control,
and planning is designed explicitly for the craft brewer.
• Allows operators to focus on ensuring quality, not on
juggling all of the tasks required to get the job done.
20
Continue Source: Siemens / Frost & SullivanFood & Beverage
Using Siemens technology Gruppo Campari created a unified repository
for all product specifications and increased efficiency of manufacturing
Until 2012, Gruppo Campari’s approach to management of product specification remained unstructured
Challenge Solutions Benefits
• With Gruppo Campari’s rapid expansion • Gruppo Campari adopted Siemens • SIMATIC IT Interspec was selected for its
(more than 20 acquisitions in the spirit SIMATIC IT Interspec from Siemens PLM flexibility and operation independence.
industry globally in the past 20 years), Software, which is a configurable solution • According to Campari Global QHSE
there was a constant requirement to for product specification management in Content Manager, Marco Rocca:
integrate new products, plants, and assets process industries.
into its operation management systems. “We can configure the systems
• This allows the company to develop, independently, add properties, create
• A need to standardise and streamline data configure and manage all production new frames, and edit contents – virtually
acquisition while offering an accelerated specifications (raw materials, intermediate everything can be configured with no
response to product information requests and finished products as well as packaging customisation.
from consumers and/or regulators. materials).
“Alternative solutions were more rigid and
• Previously this was done using Microsoft • This stores all specifications in a single, required a system engineer to do that.
software such as Word documents or Excel controlled data repository. With SIMATIC IT Interspec, it was enough
spread sheets, with no standard workflow to attend a short training course to be
or authoring. virtually independent. The tool has been
• In 2012 as a result of the complex growth around for a few decades, so it’s proven,
of the organisation, it launched an tested and stable.”
extensive digitisation process.
21
Continue Source: Siemens / Frost & SullivanFood & Beverage
3 - Foreword
Product Production Production
Production Services
Design Planning Engineering
4 - Introduction
Improve the plant efficiency for beer Industry - Increase the manufacturing efficiency of liquor giant - 15 - Food & Beverage
SIMATIC PCS 7 with BRAUMAT craft brewing libraries SIMATIC IT Interspec
Designed for the beer industry. Monitoring of brew quality enabled It is a key component of the R&D Suite but can also be implemented as
through automatically stored production data and analysis tools. a stand-alone system for global specification management in process 23 - Minerals & Mining
Advantages include increased production with no further staffing industries. This allows the company to develop, configure and manage
requirements. Improved quality, repeatability and consistency. This is all production specifications (raw materials, intermediate and finished
done by automating labour-intensive tasks which have historically been products as well as packaging materials).This stores all specifications in
done manually. a single, controlled data repository. 30 - Water & Wastewater
39 - Manufacturing & Infastructure
Automates and intelligently control bottling lines - Unified Repository for Product Specifications -
Leading soft drinks manufacturer Leading Italian liquor giant
One of the largest carbonated soft drink bottling plants in South Africa is Company adopted Siemens SIMATIC IT Interspec from Siemens PLM 45 - Conclusion
using Siemens PLC’s at each filling line. Siemens technology supported Software, which is a configurable solution for product specification
~79% of total local production of 4.2bn litres in 2016. management in process industries. Using Siemens technology, Italian
Liquor Giant created a unified repository for all product specifications
and increased efficiency of manufacturing.
22
Source: Siemens / Frost & SullivanMinerals & Mining
New technologies and digital platforms critical to improve productivity and production margins
South Africa: Input cost South Africa: R356 Siemens has supported Exorbitant operational
inflation of 6% for mining billion GDP contribution ~33% of SA mining costs continue to dent
sector during 2018 in 2018 contribution to GDP investor confidence
23
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Source: Frost & SullivanMinerals & Mining
Overview: Initiatives being sought and
undertaken in the mining sector
Zambia South Africa
• The Zambia Development Agency Act • The Mandela Mining Precinct’s role is to identify
provides incentives to firms investing barriers and develop a vision for long term
substantial amounts in the mining sector development and transformation of the mining
in the country. The Act specifies that the industry. The project also emphasises on improving
threshold amount should be US$ 500,000 mining efficiencies and introducing most modern
or above in order to qualify for fiscal and mining technologies.
non-fiscal incentives. • Introduction of Mineral beneficiation (Platinum Group
Mineral) for fuel cell industry development.
• The Amended Mining Charter outlines the
Zimbabwe and Namibia expectations of rights holders to invest in South
African mining industry.
• Last year Zimbabwe scrapped its
indigenisation requirements and slashed
the 51% indigenous shareholding quota Botswana
for all minerals; this initially excluded
diamonds and platinum. The move was • In 2018, Botswana announced plans to introduce
well appreciated by investors. the country’s new minerals policy. The policy aims
• A similar measure was implemented to improve the investment climate in the minerals
in Namibia. The country relaxed the sector. Moreover, the country has completed the
requirement for mining entities to have legislative amendments to the Mines and Minerals
a minimum indigenous shareholding of Act, Precious and Semi Precious Stones Act and
5% held by previously disadvantageous Diamond Cutting Act to enhance the ease of doing
groups. business.
24
Continue Source: Frost & SullivanMinerals & Mining
Despite increasing labour issues and a drop in investment, South African
mining industry, one of the largest in Africa, is focusing on improving growth
Total mining production by continent- 2017 Mining contribution as % of total investment in South Africa
• Africa has excellent potential within its mining sector due to its • Total mining investment in South Africa was more or less stable untill
enormous mineral endowment. 2014. After 2014, the industry witnessed a drastic dip in investment, as
• Mining is one of the key industries for many African countries. mining struggled to regain investor trust.
• South Africa’s mining industry is one of the largest in Africa and the • Lack of an environment conducive to making returns is one of the major
mining industry is the single largest contributor to the country’s exports. reasons. The legal wrangling surrounding the mining charter, low prices
In 2018, minerals accounted for 38% of all exports. forecast for strategic commodities, a contracting construction sector,
stringent regulations and exorbitant operational costs may continue to
• However, mining’s share to country’s GDP has drastically dipped from dent investment in the sector in future.
21% in 1980 to 8% in 2018 due to economic uncertainties, labour
issues and other political instabilities.
57.8%
12.0% 12.0% 12.0% 12.0%
11.0% 11.0% 11.0%
9.0% 9.0%
8.0%
14.5%
7.0% 8.5%
5.6% 6.6%
Africa Latin America Oceania Europe North America Asia 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: World Mineral Council Source: Mining Council SA
25
Continue Source: Frost & SullivanMinerals & Mining
Digital Transformation challenges in enhancing labour skill sets, increasing
efficiency of mines and changing the way the mining industry operates
Data reliability
Automation Adoption Maturity 2018
Absence of region Lack of internal
specific automation technological awareness
solutions and skills sets
Manufacturing South Kenya Ghana Rest of
Sub-Sector Africa Africa
Mining
Lack of Dearth of service
Government providers to implement
regulations customized solutions Metals
Top 10 Cement
Early Developing Mature
Affordability challenges Disinterest among
technology
providers with no
new explorations
Foreign investors South Africa leads Automation leads
Connectivity issues- Extreme Weather are still wary of in the adoption to employee skills
Mines are located in Events challenges facing of automation in development and
remote areas mining projects in mining sector advanced on the
Africa job training.
High infrastructure and
connectivity cost
26
Continue Source: Frost & SullivanMinerals & Mining
Outlook: The rise of intelligent mines is not a distant dream;
Digitalization is slowly capturing the mining industry of Africa
Current (2019) Short Term (2021 - 2022) Future (2023+)
Product Focused Connected / Smart Mines Mining-as-a-Service
IT OT Data Insights Outcome
Commoditisation, multiple suppliers, IT-OT convergence Outcome-based
varying vendors and makes OT applications Lifecycle Services
Field Sensors IoT Cloud Online Outcome Predictive AI/ML
Device Gateway Storage diagnostics based Analytics Blockchain
• Sensors • Cloud, XaaS • AI/ML
• PLC, SCADA, DCS, HMI • Analytics • M2M, 5G
• Control platforms and • Predictability/ Preventive • AR & VR
software Maintenance • Blockchain/ Digital/ Integrated
Supply Chain
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Continue Source: Frost & SullivanMinerals & Mining
Siemens Mining Technologies implementation
Enhanced Productivity with reduced
Optimizing Conveyor Belt Systems Optimized Processes and Operation
maintenance & service costs
SIMINE portfolio with complete electrical Use of digital simulation tools to reveal SIMATIC PCS7 with its open, flexible and
engineering, drive automation and service the dynamic behavior of the whole system scalable architecture forms the basis of the
packages that increase productivity, which allows improvements to be made in Minerals Automation Standard that aims at
improve drive system efficiency and reduce system operation while also minimizing idle improvements in competitiveness, through
energy costs. times. optimized productivity, plant availability and
efficiency.
Exploration & Transport & Processing & Refining &
Excavation Material Handling Beneficiation Agglomeration
Condition Monitoring Systems
SIPLUS CMS for the early detection of
damage to machine and plants which aids
in decision making for maintenance staff,
operators and management.
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Continue Source: Siemens / Frost & SullivanMinerals & Mining
3 - Foreword
Siemens Mining Technologies implementation
4 - Introduction
Equipment Availability and Efficiency
At the Sentinel Copper Mine in Zambia Siemens has 15 - Food & Beverage
implemented a SIMINE Gearless mill drive with SIMATIC PCS7
mill automation that has resulted in an operational efficiency
of 95.3% in addition to lower operating costs, minimized
downtimes and improved reliability. 23 - Minerals & Mining
30 - Water & Wastewater
Exploration & Transport & Processing & Refining &
Excavation Material Handling Beneficiation Agglomeration
39 - Manufacturing & Infastructure
Automation for Underground Mining Asset Health Analytic
45 - Conclusion
At the Freeport McMoran Grasberg copper and gold mine in Siemens’ Asset Health Analytics creates a foundation that allows
Indonesia, SIMATIC PCS7 was installed for the DCS that controls equipment like conveyors, ball mills and crushers to supply additional
eleven production trains and five service locomotives. The data. Analysis of this data provides information that allows for
automation system allows to minimize production loss in the fact based maintenance decisions in real time while also planning
transition from open-pit to underground mining maintenance and service measures.
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Source: Siemens / Frost & SullivanWater & Wastewater
Partnerships between technology enablers and cross-functional participants are bringing in smart capabilities to water cycle management
Water Expenditure by Africa South Africa: Invested ~R12 bn in the Last 4 years Siemens flow meters
(1.3% of total infrastructure technology upgrade and construction measured the flow of ~3.7 million
investment) is extremely low of three treatment plants megalitres of water
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Source: Frost & SullivanWater & Wastewater
Poor water utility management and inadequate water infrastructure
investment results in greater need for water sector development
Digital Transformation Decentralisation
Smart and advanced technologies There is growth in the market for ‘plug
like leak detection and metering are and play’ treatment models owing to
being used to improve billing and the development of industrial zones,
efficiency. gated communities and business
parks. Under-sink treatment systems
are growing in popularity retail will
drive demand for FMCG products.
Current
Improved Quality
Africa Sustainable Buildings
Trends
Preference is shifting away from Buildings are constructed to be water
cheaper products towards higher efficient, reducing the amount of
quality core products in the case of fresh water use, through wastewater
large water infrastructure projects, reuse. This is driven by the increasing
especially in the building services awareness of water scarcity.
and industrial sectors.
Reuse
Deployment of technological solutions is becoming common-place in the industrial and residential segments. Policy enforcement regarding
effluent discharge is becoming more stringent across the continent. There is reducing dependence on the public sector to provide water
and wastewater services. Industrial and residential sectors are opting to install their own small-scale water treatment and, in the case of
industrial sector, wastewater treatment facilities. This has opened the door to increased private sector participation.
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Continue Source: Frost & Sullivan, World Bank, WASREB, IMF, IWA, UN Projections*Water & Wastewater
Water sector overview: South Africa
Municipal Water Sector Challenges, South Africa, 2018 Water Sector Initiatives, South Africa, 2018
Climate variability has led to rising levels of water scarcity across the country creating a severe deficit
Municipal Industrial
in water availability. This has indirectly impacted the levels of municipal revenue generation from
water sales. Pressure management, pipe Large industrial players have
replacement and demand- made changes or investments
There are a number of options being explored to increase water resources in the country, including
side management through in their business to ensure
wastewater treatment and desalination. The main barrier is the initial capital investment required.
digital capped water meters reduction in their reliance on
South Africa loses approximately 1.58 billion kilolitres of water a year as non-revenue water. The were the top 3 initiatives municipal water supply and
water loss reportedly costs the country around R7.2bn a year. taken to rapidly reduce water ultimately use less water.
consumption in the Western
Cape in 2018.
Government has invested
~R12 bn in the technology
Industrial Water Sector Challenges, South Africa, 2018 More than 200 users were upgrade and construction
connected to be supplied with of three treatment plants
Water restrictions, fines and rising water tariffs resulting from low water availability in parts of the treated effluent for irrigation specifically designed to treat
country have impacted water intensive industrial sectors. and various industrial polluted water from old
applications not requiring underground gold mines
Poor feed water quality is impacting industrial players as they need to invest in water treatment potable water. across Gauteng and mitigate
technologies to ensure feed water meets quality standards. This is especially the case in the food and further problems of acid mine
beverage sector. drainage.
Acid mine drainage is one of the most significant water-related environmental challenges facing the
mining industry caused by old abandoned mines and increasing illegal mining activities. This water is
very difficult to treat.
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Continue Source: Frost & SullivanWater & Wastewater
Digital awareness is significant but the actual investment
is expected to be challenge specific and value driven
“One of the biggest barriers to the development of the
Appetite for Technology Adoption 2018 water and wastewater sector across Africa is the low
investment this sector receives. However, its importance
is being recognised and investment is picking up, but
Sector South Africa Kenya Ethiopia Ghana very slowly.”
– A leading Solution Provider
Water
Wastewater
“Water and wastewater in the F&B market is a real driver
Early Developing Mature in most African countries at the moment. Government is
getting stricter about water discharged from industries
and the enforcement of existing effluent policies is
picking up.”
The water and wastewater There has been chronic In Ghana and Kenya there is
sector in South Africa is mature underinvestment in water increasing focus and adoption - An EPC
in comparison to the rest of and wastewater infrastructure of ever more advanced
Africa, due to strong technical across Africa. Currently, technologies in the water and
skills, and commercial and there is an estimated USD 12 wastewater sector. Ethiopia is “There is increasing uptake of the small-scale plug and
financial management of billion investment gap. All 3 using slightly less advanced play/containerised water treatment modules for business
water resources. countries face cheap labour as technologies to overcome parks and housing developments and underserved, rural
a road block to the adoption their challenges. areas. The benefit of these is that less skilled labour is
of advanced technologies. needed.”
– A leading OEM
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Continue Source: Frost & SullivanWater & Wastewater
Technology adoption maturity: Wastewater sector
Digital Transformational Journey Current and Future State of Key Automation Product Adoption
Technology Current State Future State
Mobile and
decentralised treatment Industrial Water
Enhanced Adoption
Treatment
Business Impact
systems
Web-based Better data acquisition
technologies and and real-time control and
Enhanced Adoption
Cloud Computing management
IIoT and AI for fully Integration of industrial
automated treatment treatment with central Water Treatment as a service
facility
Early Developing Maturity systems
Technology Adoption Maturity
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Continue Source: Frost & SullivanWater & Wastewater
Automation is an ideal solution to tackle cost pressures and enhance
asset performance leading to efficient CAPEX and reduced OPEX
Value of Water and Non-
Revenue Water (NRW) Key Automation
Imperatives Implications
Relatively High Water Resource Availability
Capex and OpEx and Water-Energy Nexus
Capital Efficiency Managing capital projects
operations and process
Plan, build and
plant operations lifecycle.
Governance and Population Growth operate economically
Accountability and Urbanisation
Knowledge retention
Top 10 Resource Efficiency and transfer, Managed
services, Field workforce
Institutional challenges Public Health – Skills shortage automation and
Capacity Water Quality,
and Resources Access to
productivity.
Sanitation and
Safe Disposal Shorter turnarounds/
longer run links, Schedule-
Asset Efficiency
based maintenance –
Sustainability of Climate Change Optimise
Water Utilities and and Extreme Data-driven
Cities Weather Events Connected assets maintenance
Risk in Water Intensive
Industry and Global
Trade
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Continue Source: Frost & SullivanWater & Wastewater
Expected transformation in the African water sector
Current (2019) Short Term (2021 - 2022) Future (2023+)
Product Focused Smart Water Grids Water Treatment-as-a-Service
IT OT Data Insights Outcome
Commoditisation, multiple suppliers, IT-OT convergence Outcome-based
varying vendors and makes OT applications Lifecycle Services
Field Sensors IoT Cloud Online Outcome Predictive AI/ML
Device Gateway Storage diagnostics based Analytics
• Sensors • Cloud • AI / ML
• Analytical instruments • Machine learning • XaaS
• Control platforms and • Predictability
software
36
Continue Source: Frost & SullivanWater & Wastewater
Poor water utility management and inadequate water infrastructure
investment results in greater need for water sector development
Challenges Industry Specific Challenges
Weak policy Limited Limited expertise and Sector Approach to water and wastewater Challenges
implementation due to availability necessary skills in the
poor coordination of funding water and wastewater Mining • Water plays an integral role in the • High environmental impact from
sectors mineral processing stage of the effluent water.
• SSA countries have • Although the need • There are limited mining operation.
• Poor wastewater quality that requires
various policies in for investment in individuals with the • Mine drainage and process water are rigorous treatment methods.
place to prevent the water and wastewater necessary expertise and the main types of water produced in
release of untreated infrastructure is being skills to implement and • Remote locations far from water
the mining operation.
wastewater from increasingly recognised, manage technologically treatment plants.
industrial processes. The the availability of advanced water and
inherent fragmentation funding is a persisting wastewater solutions.
at different government issue. This results in low Food & • The food & beverage industry • Regulations around effluent and
levels responsible for demand for non-legacy Beverage requires an enormous amount of reclaimed water standards are
• Water is not a high
water and wastewater products and is further clean water. becoming more stringent, resulting
revenue commodity and
management results compounded by the lack in the need for rigorous treatment
non-payment is fairly • The industry is focused on
in limited enforcement of available in-country methods and increasing demand for
common, resulting in maximising wastewater reclamation
of these policies. As a training. zero-liquid-discharge solutions
decreased municipal in order to reduce the amount of
result, industries are not
funds for water projects. • Adding to this, the fresh water needed.
penalised for releasing
low cost of labour,
untreated wastewater. • This is further
compared to the high
compounded by the Oil & Gas • Oil & Gas production requires large • Stringent environmental regulations
• Governments are cost of advanced
reliance on multi- volumes of water. result in rigorous treatment methods
becoming stricter with instrumentation, is a
lateral and bi-lateral for water effluent.
policy enforcement major restraint.
organisations for
and the impact should • Remote locations far from water
funding of water related
decrease over the next treatment plants.
projects.
5 years.
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Continue Source: Frost & SullivanWater & Wastewater
3 - Foreword
Outlook: The African water / wastewater sector is expected to witness
a gradual transformation with cost and skill implications of technology
adoption emerging as key challenges for the sector 4 - Introduction
Siemens Flow Solutions: 15 - Food & Beverage
Siemens has provided South Africa with simple, flexible flow solutions for more than 30 years. Some of these solutions are; standard
electromagnetic flow meters with modular pulsed Direct Current (DC) technology, high-performance pulsed Alternating Current (AC)
electromagnetic flow meters, external powered flow meters and battery-operated water meters with 3G information transmission.
23 - Minerals & Mining
In South Africa:
Siemens flow meters combine world-class performance with a low cost of ownership, tailored for the toughest water applications. Siemens assists
the Water Boards in efficiently measuring water usage which improves productivity and ultimately the financial health of the Water Boards.
30 - Water & Wastewater
Siemens Future Focus:
Promote greater awareness, among customers and end-users, of the other uses of Siemens flow meters such as;
water leakage detection, pipeline water management and irrigation flow measurement.
39 - Manufacturing & Infastructure
Siemens Smart Metering Solutions – High Precision Flow meters
Addressing Industry Requirements usage across Water Boards 45 - Conclusion
• Siemens Smart Metering helps in Water Balancing Siemens’ high-precision volume measurement flow meters are used by
• Key Features: Designed for Water Industry Application various Water Boards across South Africa, such as Rand Water, East Rand
One battery driven water meter DN 25 – 600 (1” - 24”), Water Care Company (ERWAT), Lepelle Northern Water, Umgeni Water,
Johannesburg Water.
10 years battery operation & AC + battery backup
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Source: Frost & SullivanManufacturing & Infrastructure
Digitalization and Industry 4.0 ideal for optimizing production costs and enhancing global competitiveness
Focus on manufacturing to South Africa: Local content in Siemens technology has US$ 459 million annual investment
boost economic prospects automobile production to be increased supported ~57% of SA local by South African businesses to prepare
and create employment from 39% to 60% by 2035 car production in 2018 for impact of 4th Industrial Revolution
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Source: Frost & SullivanManufacturing & Infrastructure
Mega Trends: Impacting the manufacturing sector in Africa
• Increasing population and rising percentage • Growing imports especially from Chinese
of urbanisation across African economies and other Asian countries. This has a direct
will have a significant impact on demand impact on foreign exchange and employment
for manufactured goods and the need for opportunities created in the manufacturing
creating employment opportunities across sector. There is a need for reversal of the trend
manufacturing segments. and necessity to increase exports & value add
from Africa.
• Growing GDP per capita is expected to boost
local demand for manufactured goods and • Reducing local demand and highly competitive
while also providing the opportunity to create global prices are challenging for local African
an export driven manufacturing setup. Local industries. Higher operational costs of
demand alone is however not expected to production in most African countries when
justify investment in the sector. compared to global standards.
• FDI influx in Ethiopia and Ghana has witnessed • African countries are rich in mineral resources
a positive development owing to government which are exported without much value
initiatives and policies that are being addition and as such have a lower market
implemented with regards to improvement value. The finished goods are however
in the manufacturing sector, infrastructure imported at a much higher price. Countries
etc. Private investment in manufacturing is are losing out on valuable foreign exchange.
expected to increase with these initiatives. Hence, the focus is to develop industries and
supply chains that can add value to these raw
Stagnating growth in countries like South Africa
materials and contribute in a greater way to
impacting disposable income levels, hampering sectors
the local economy.
like the automotive industry where new investment in
production expansion is constrained.
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Continue Source: Frost & SullivanManufacturing & Infrastructure
South Africa: Manufacturing sector overview
Prominent Manufacturing Sub – Sectors, South Africa, 2018 Manufacturing Sector Initiatives, South Africa, 2018
O1 Mining, Metals & Cement Increasing automobile
production to 1% of the total
Investment of USD 459 million
annually by South Africa businesses
02 Food & Beverage global production from the up until 2021 to prepare for the
03 Automobile Manufacturing current 0.68%. Local content impact of the fourth industrial
utilisation also to be increased revolution.
from 39% to 60% by 2035.
Manufacturing Sector Challenges, South Africa, 2018
Manufacturing Competitive Mineral beneficiation (PGM) for
Issues pertaining to stability of electricity supply and rising costs of electricity/energy has eroded Enhancement Programme fuel cell industry development.
manufacturing margins that South African industries enjoyed in the past (MCEP) to improve Growing market share of domestic
competitiveness of existing mining equipment manufacturers.
Under utilised capacity, lower productivity levels and labour unrest have negatively impacted
manufacturing facilities. Mandela Mining Precinct focusing
margins and net operating surplus levels
on mining efficiencies, mining 4.0,
Development of local supply chains and content are not exactly aligned with the requirements of modernisation etc.
the country’s manufacturing industry. This would also entail technology modifications that suit local
operating environments and skills available.
Availability of proper infrastructure is a key impediment to the manufacturing sector in the country.
Logistics and inefficient modes of transportation not only add to final product cost but also incur
additional time in reaching the final destination.
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Continue Source: Frost & SullivanManufacturing & Infrastructure
Automation, Digitalization and Industry 4.0. The ideal platforms for addressing concerns
of the African manufacturing sector for achieving optimal production costs and enhancing
competitiveness in the global/ export markets. However, implementation has its challenges
High CAPEX associated
with digital systems Key Automation
Imperatives Implications
Policy & Regulations Preference for global
favouring domestic OEMs in system design,
production engineering and assembly
Operational Efficiency Managing supply chains,
resource utilisation and
Plan, manage and
production processes
operate economically
Availability Price sensitivity of efficiently; minimizing delays
of skilled end users towards and production related losses.
workforce automation/ digital
platform adoption
Top 10 Business
Sustainability Leapfrog technology adoption
to enhance quality and
Focus on RoI challenges Growing pressure Growth amidst competitiveness in global
and immediate on production challenging business export markets.
tangible benefits margins environment
Asset Performance Data analytics, predictive
Reducing demand Rising level of and Management maintenance and reduced
for domestic imports from Asian
manufactured goods countries Connected assets production down times.
Competition in African
export and global
market places
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