Manufacturing industry in Mauritius embraces the challenges of global shifts
The manufacturing industry in Mauritius has been a cornerstone of economic diversification and transformation. Over the past decades, it has played an instrumental role in shaping our growth trajectory.
This industry, in Mauritius as well as globally, is facing several challenges: external shocks, tight labour markets, rising costs, climate change and continued supply chain stresses. All these have underlined the importance of leveraging technological progress to move towards advanced manufacturing and to accelerate transition to sustainable practices.
Many of the industry leaders believe that the driver of future investment would be increasingly about “the three Ds”: demographics, digital and decarbonisation.
Digital technology is playing a significant role in supporting the manufacturing industry in taking on future challenges. With a persistent search for efficiency and focus on building resilience across their operations, many manufacturers are pursuing their digital transformation objectives.
Manufacturing companies worldwide, including those in Mauritius, are increasingly embracing a ‘smart factory’ approach. They are exploring the industrial metaverse, installing digital technologies, and investigating the possibilities of generative AI, as tools to add value to their operations. The potential benefits of smart factories are vast ranging from gains in asset efficiency, labour productivity, and product quality to substantial cost reduction, as well as advancements in safety and sustainability.
With decarbonisation high on the Government’s agenda for the future economic development, the transition to a more efficient, less polluting and smarter industrial environment has become more pressing. Local players, for instance in textile, agro-processing and seafood, have started deploying substantial financial resources to facilitate this necessary shift. Some have already embraced the concept of ‘responsible’ manufacturing with an outlay of sustainable initiatives.
The Carbon Neutral Industrial Sector (CNIS) is an example of an incentive provided by Government to encourage the industry to migrate to cleaner, more efficient and responsible energy generation. The opportunity for local companies to go ‘green’ is ever present. Circular economy is bound to also have a greater role in the strategies SME adopt to reduce costs and be competitive in dynamic markets.
Navigating evolving and challenging supply chains has been a key focus for manufacturers since the start of the COVID-19 pandemic, thus stressing the need for agility, resilience and efficiency. Over the past few years, the supply chain reconfiguration has led to production capacities to be geared towards more regional and localised consumer markets, in a bid to reduce the risks and costs. With “nearshoring” and “friendshoring”, we have seen companies redirecting their production and supply chains’ focus on to safer destinations, a share of which Mauritius is seeking to capture.
Our local manufacturing industry is presented with both a challenge and an opportunity to chart a new course of action. A strategy underpinned on embracing the transition to sustainable and responsible practices, technology upgrade and novel market development. While we have over the years maintained a robust export market with our traditional European partners, representing approximately 45% of our export share in 2023, exports to Africa, our closest market destination in terms of distance, amounted to some USD 540 million in 2023 (adjusted for exchange rate). In comparison, the value of intra-African trade reached USD 192 billion in 2023. This reflects on the staggering potential available for the Mauritian industry to tap into, particularly by leveraging on our FTAs and preferential market access through the AfCFTA, SADC, and COMESA amongst others.
Over the last five years, the manufacturing sector has attracted inflows of FDI of a gross amount of Rs 5.6 billion, some of which represent strategic M&A (mergers and acquisitions) of foreign players into local manufacturing companies, in a bid to upscale the changeover of technology, widen the range of products and its quality, and diversify the market reach. We are trying to move away from investments that are dependent only upon incentives.
Our industry needs to transform itself across multiple dimensions. The global shifts represent tremendous opportunities, for the private and public sector to develop value propositions unique to Mauritius, to attract more investment, upgrade our trade output, and diversify the sectors of activity in the manufacturing industry, which will enable the sector to re-invent itself and reach new heights.
Ken Poonoosamy
Chief Executive Officer
Economic Development Board
1Source: African Export-Import Bank (Afreximbank), June 12, 2024. "African Trade Report 2024: Climate Implications of the AfCFTA Implementation,"
