Page 47 - EngineerIT AugustSeptember Issue 2026

FINANCE

“There’s not a textbook solution,” she Pillay argues that this is why digitisation can no longer be treated as optional.
says. “Yes, there are formulas, but
the formulas are only there to help “Everyone needs to digitise. It’s not about how anymore, it’s about when.” She also
us get to the end vision.” Lula’s own believes that finance should move with that process rather than sit outside it. “We
manufacturing portfolio gives some want to see our smart financing be the enabler for their digital growth.”
indication of the current demand for
finance in South Africa. Pillay’s conversations at the Manufacturing Indaba also reinforced the value of
local sourcing.
The company has funded
approximately 3,300 manufacturing Shorter lead times, lower exposure to exchange-rate volatility and less
customers and disbursed around dependence on international supply chains can all make a material difference to
R3 billion to businesses in the smaller manufacturers.
sector. Manufacturing accounts
for roughly 19% of the value “If you can source local, local is the best option for you,” Pillay adds. “It’s always
disbursed, while funding requests available, lower lead times, cheaper cost, no exchange-rate fluctuations, and
from manufacturers are around a stronger local supply chain also creates more opportunity for South African
18% higher than those from other manufacturers to become suppliers themselves.”
industries, reflecting the cost of
machinery and infrastructure. Pillay highlights that many SMEs are already thinking beyond survival. They
are looking at new equipment, larger orders, distribution opportunities and
Anecdotally, Pillay comments that the capacity needed to compete for more complex work, and the funding
she met one engineer who needed conversation has to be agile enough to move with the ambition.
specialised double-sided printing
capacity. He had initially planned “It’s not just about throwing money. It’s about moving away from traditionalism
to outsource the work, but the and meeting the community where the community really is and where they need
suppliers he approached would have it,” she concludes.
had to reduce their own output to
accommodate his order. For South Africa’s manufacturing sector, there is no lack of entrepreneurial intent.
The challenge is whether viable businesses can access capital quickly enough to
He eventually began looking for act. If smart manufacturing is going to move beyond the conference floor, smart
funding to buy the machinery finance has to understand the factory floor too.
himself. “Situations like this are where
the manufacturing modernisation
debate becomes practical,”
she emphasises. “Investment in
technology is directly tied to whether
a business can fulfil an order,
increase output or meet a customer’s
delivery expectations.”

“Right now, when people are placing
orders, there’s an expectation of
two things: high quality and fast
delivery,” Pillay says. “A manufacturer
can produce an excellent product
and still lose the work if another
supplier can deliver comparable
quality faster.”

For a large manufacturer, automation
may be part of a long-term capital
programme. For an SME, the decision
can be far more immediate: one
machine, one order and a narrow
window in which to act.

47 | EngineerIT August/September 2026