1 survey of exporters, past exporter and potential exporters · 1 survey of exporters, past...

DRAFT

1 Survey of exporters, past exporter and potential exporters

1.1 The purpose of the survey

The purpose of the survey was to solicit the opinions of exporters and to find out what products they

were exporting, where they were exporting to, what drivers and barriers they were experiencing,

etc.

Initially (in terms of the initial proposal) only existing exporters were to be surveyed. However, it was

felt that the opinions of non-exporters would be different to those of exporters. Non-exporters had

perceived problems and had not necessarily experienced the actual problems that current exporters

have. In terms of the “REN-approach”, it was also necessary to try and find out why exporters exited.

Therefore a separate survey was also prepared for past exporters.

There is no comprehensive exporter directory in South Africa. With the kind assistance of Neels

Bothma (of Exporthelp and UNISA) over 2000 exporters were identified. The following email was

sent to them:

Dear Exporter

One of the strategies that the South African government has adopted to reduce the very

high unemployment rate and to grow the economy is to increase exports. The Department

of Trade and Industry has appointed TIPS to review and revise the current National Export

Strategy. Part of this review includes getting the views of both current and past exporters as

well as potential exporters. It is important to understand both the drivers and the obstacles

that exporters face.

The National Export Strategy will cover the next 20 years (although only the next five years

will be spelt out in detail). The scope is national and therefore deals with all factors that will

have an impact on South Africa’s exports. It is not limited to the Department of Trade and

Industry’s functions but also includes, but not limited to, finance and logistics. The goal is to

advise government on ways to change policies that hinder private establishments like yours

and to develop new policies and programs that support productivity growth and

competitiveness. The results of the survey and other research could lead to substantial

changes that may affect your company and industry. Your opinion and participation in this

survey is vitally important.

It will be appreciated if you would complete one of the three surveys. Whether you are

currently exporting, have exported, or do not export, your opinions are important. Besides

the questions you will also have an opportunity to give your views on any aspects that you

feel are important to help grow South Africa’s exports. The questionnaires are online. Please

click on the appropriate questionnaire:

• Have never exporter (https://www.surveymonkey.com/s/nonexporter1 )

DRAFT

• Have exported but not on the past year

(https://www.surveymonkey.com/s/Pastexporter1 )

• Currently exporting (https://www.surveymonkey.com/s/NES_Current1 )

The completed questionnaires will be treated as confidential and only the TIPS researchers

will have access to your answers. Any comments that you do give will not be attributable to

you. You are therefore encouraged to be absolutely honest and highlight any aspects that

hamper your role in exporting.

In addition to this database, requests were also sent to organised business and to the Export

Councils, who in turn were requested to forward the email to the members. (It is possible that

opinions regarding the effectiveness Of Export Councils could be skewed.)

DTI (Department of Trade and Industry)’s own database was also used. This included exporters who

had used the export marketing assistance scheme or had been part of a capacity building

programme. (It is possible that the opinions of exporters that had benefited from various

government incentives would also skew the survey results.)

1.2 Responses to the survey of current exporters

A total of 374 exporters participated in the survey.

As would be expected most of the exporters came from Gauteng, followed by the Western Cape,

KwaZulu Natal and the Eastern Cape. As can be seen from the table below responses from the other

provinces were rather dismal.

Table 1: Origin of responses - exporters

Province Responses

Eastern Cape 32

Free State 3

Gauteng 144

Kwazulu Natal 37

Limpopo 8

Mpumalanga 7

North West 4

Northern Cape 2

Western Cape 94

1.2.1 Size respondent’s companies

There was a good spread of exporters when ranked according to size. Almost a quarter of the

respondents had more than 200 employees. This is important since these exporters are responsible

for the bulk of manufactured exports. Nevertheless, there was a good representation from very

small, small, and medium-sized exporters.

DRAFT

Figure 1: Total number of full time paid

employees

Figure 2: Exporter size turnover

1.2.2 Sectors represented by respondent’s companies

less than

5

6 - 10

11 -50

51 - 100

101 - 200

More

than 200

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million

DRAFT

Figure 3: Classification of exporters

1.2.3 Exporter’s experience

Manufacturers were well represented among the respondents. Nevertheless they were also

respondents from agriculture, mining, and the services sectors.

Figure 4: Exporter’s experience Figure 5: Exporter’s experience

DRAFT

Most of the firm’s that responded have been in business for a considerable length of time. And

indeed most of the respondents had been exporting for more than 10 years. This cohort may

therefore be overrepresented and the results could be skewed since experienced exporters have

overcome many of the problems that new or less experienced exporters are still battling with.

Is important therefore that when looking at the results and problems that small emerging exporters

and novice exporters face will not be ranked prominently. In this regard, it is important also to refer

to the survey, undertaken for the “National Exporter Development Programme” to ensure that all

problems that exporters face are addressed and not only larger or experienced exporters.

1.2.4 Reasons for exporting

For a long time the “exporter stages” models in international business and marketing research have

for decades distinguished unsolicited/reactive (passive) from proactive (active) exporters.

Geishecker et al (2012)claim that unsolicited exports occur only infrequently, are often discontinued

and that only a fraction of the potential customers in a foreign destination will place unsolicited

orders. From the survey of South African exporters, a few of the companies commented on the

potential growth opportunities that they saw for their products in foreign markets. One commented

that “There are better opportunities in overseas market, for Black own wine brands” and another,

“Growth strategy due to demand for our products internationally”. Less experienced exporters,

DRAFT

however, started exporting as a result of unsolicited enquiries. Exporters made the following

comments:

• “Had unsolicited enquiries for many years but recently decided to export because of

slowdown in local markets. Have always exported to SADC (Southern ) countries.” and

• “Enquiries from cross border for our products that their local industries could not supply or

could not supply competitively.”

Figure 6: Reasons for exporting

Just over 16% of the exporters (with more than 100 employees), exported because they were part of

multi-national companies. In addition to this, almost 40% of the larger exporters considered

exporting to be part of their original strategy. (This was partly driven by the small South African

market as one respondent put it - “original strategy and spare capacity”.) This obviously implies

increased capacity and one respondent said; “Demand from abroad for citrus combined with

increased production locally” was their motivation for exporting.

A further 18% of these larger exporters wanted to reduce their dependence on the South African

market. Smaller firms and less experienced exporters did not see this as important. Although some

larger companies see South Africa as a major market, they want to diversify. They indicated the

DRAFT

traditional stages of internationalisation, starting with exports and eventually establishing foreign

manufacturing facilities. Africa seems to be the logical destination but others include Australia.

Twenty six per cent of smaller exporters (with less than 100 employees) established their companies

to export, with an additional 16% including exports as part of their original strategy. Twenty per cent

had unique products that they felt would have global appeal. Smaller companies did not see

reducing their dependence on the South African market as being as important to larger companies.

Companies with between 11 and 50 employees started exporting as a result of unsolicited orders.

Hardly any of the exporters saw the value of the South African Rand as a potential driver. A few

companies (3%) with more than 200 employees however did see an undervalued currency as an

advantage. Incentives were important to one exporter of automotive equipment and they stated

that “MIDP (Motor Industry Development Programme) duty relief incentive scheme” was a

contributory factor in their decision to start exporting.

Although AGOA (African Growth Opportunities Act) was given as a driver to start exporting, it was

seen as a benefit.

Innovation was an important consideration in many companies starting to export. More than 15% of

exporters indicated that this was their prime motivation. It was a very important consideration for

firms that had been exporting for less than a year and accounted for more than 30% of those

exporters.

Being a Unique South African made product

More experienced companies indicated that inward-buying missions were a contributory factor to

the export efforts. One exporter indicated they started exporting as a result of the their participation

in the Design Indaba, Cape Town 2009 and 2012, where they made contact with EU importers. Less

experienced exporters on the other hand relied more in participation in foreign trade missions and

foreign travel. This indicates that:

• More resources should be given to inward-buying missions as the investment is more

sustainable; and

• More efforts should be put into developing local networks where foreign buyers can meet

with South African suppliers.

DRAFT

Figure 7: Reasons for exporting

• Foreign clients come hunting and we process animal trophies and then export the finished

product back to client

• We specialise in ecotourism products

• Selling South Africa to overseas tourists is just the greatest.

1.2.5 Benefits exporters have enjoyed through exporting

According to Gouws (2004) most South African manufacturing companies tend to move into exports

to grow and increase sales. They are often motivated by adverse home market conditions, such as

shrinking market share because of foreign competition. The benefits that exporting brings to the

individual company, include the following:

• Commercial advantages

• increased sales;

• increased profits;

• reduced risk;

• lower unit costs;

• economies of scale;

• reduced seasonal fluctuations in sales;

DRAFT

• extended product life cycle.

• Financial

• Organisational

The survey of exporters confirmed many of these reasons. Many exporters cited numerous

advantages that they have enjoyed because of their export efforts. One established exporter stated

that exports:

• Created a sustainable platform for local industry;

• Maintained our market position in established markets;

• Continued growth in emerging/new markets;

• Exports have assisted manufacturers to maintain/grow production levels, preserve jobs and

create employment opportunities.

The other exporter’s comments are discussed under the headings listed below.

Increased production and turnover

Most of the established exporters cited the increased turnover as a major advantage. This obviously

let to increased profits. In other cases it gave exporters the “ability to turn excess capacity to exports

when domestic demand is down and hence not putting workers on short time and or having to

retrench any staff.”

Increased exports also led to a “reduction of overall unit costs” which in turn contributed to

“increased margins.” Again this improved exporters’ profitability.

The “increased sales and better volumes” also “improved cash flow.” New exporters and exporters

with less know-how have had contradictory experiences.

Bigger profits

As has been pointed out in the section on increased production and turnover, exporting has

contributed to increased profitability of South African firms as well as their employees. One of the

respondents pointed to the higher his earning were largely because of .commissions

Incentives

The South African government’s incentives also contributed to firms profitability and thus their

benefits from exporting (DTI Government Incentives and TO BENEFIT FROM MIDP INCENTIVE)

Diversification of markets and risks

Exporters either have a defensive or offensive diversification strategy. Most South African exporters

had defensive reasons for diversification and spread the risk of market contraction. A few were

forced to diversify when the South African market conditions no longer offered opportunities for

growth. A few South African exporters took offensive positions and tried to conquer new markets

and to take opportunities that offered greater profitability than expansion opportunities.

A few exporters indicated that the slowdown in the global market has affected them and that more

effort was required in exporting in this environment. The 2008/09 however was a global recession

and practically all global markets were affected. Therefore the slowdown experienced in South

Africa was similar to those felt in other trading countries. Nevertheless for a few South African

DRAFT

companies exporting “has enabled us to survive, because South African manufacturing seems to be

shrinking. Keeping our volume high and therefore being competitive in local market.”

Exporters highlighted the positive “exposure to global markets” gave them and their companies.

They were exposed to global trends that had positive consequences for their South African

operations. .

Many of the exporters pointed to the reduced risk that the “diversification of customer base’

brought. “Additional customers and purchase orders” spread the risks. Domestic risks, such as

labour disputes that resulted in undesirable market condition, were offset through “more export

sales, and being able to have sales while the mining industry in SA is on strike.” Another commented

that “We stayed a viable concern that employs 85 people full time and between 100 and 600

contract labours depending on the export successes.”

Enterprise development

Enterprise development is critical to South Africa’s growth and development and is even included as

a component in the BBEEE (Broad-based Black Economic Empowerment) score cards. Because of

exporting a firm “assisted others to export.”

Economies of scale

Economies of scale are the cost advantages that enterprises obtains due to expansion – the

producer’s average cost per unit falls as the scale of output is increased. Economies of scale gave

South African exporter’s the ability “to secure business locally and internationally.” One exporter

said that the “additional revenue stream to support local overhead structure” and contributed to

“better utilisation of capacity” allowed them to “increased turnover and profit.” The economies of

scale global markets gave one exporter the “ability to invest in CAPEX.” Their “expansion allowed

them to create employment opportunities for South Africans”

Seasonality

A few exporters that produced or sold seasonable products found that they could balance the

seasons by selling to the northern hemisphere when appropriate. Their “turnover during South

Africa’s winter months dwindled and increased for northern hemisphere's summer.” “Umtha's

export sales to northern hemisphere during South Africa's winter boost sales in these quiet months.”

Technology and innovation

Exposure to foreign markets exposes manufacturers to new technologies, innovation and other

useful information that they may not have acquired without this exposure. Although innovation may

play a more important role in the firm’s decision to start exporting, successful exporting drives

process of innovation and technology acquisition.

One exporter highlighted the importance of “networking with other exporters and importers. Our

export customers have given as excellent input with range planners and these are invaluable in

understanding individual countries & their customer trends.” Another saw their “income in strong

currency” as important but their “exposure to technology” was equally so.

Another exporter pointed to the role exporting had in “developing and growing engineering

expertise in South Africa” this was augmented by “learning about and understanding the

DRAFT

requirements for the international market.” They also “enjoyed being part of the "international"

team.”

Export spillover, broadly defined as the positive externalities arising from a firms interaction with

firms of other nations, that links productivity. According to this theory, the improvement in domestic

firms‟ export performance is the consequence or result of export spillovers from other exporters or

multi-national corporations. hosha (specializing

Learning-by-doing is a concept within economic theory. It refers to the capability of workers to

improve their productivity by regularly repeating the same type of action. The increased productivity

is achieved through practice, self-perfection and minor innovations.

Foreign exchange

Even though the exchange rate in the past couple of years has not been favourable to South African

exporters, about a dozen experienced exporters (with more than 10 years) cited this as an

advantage they have derived from exporting. Although a few did indicate the negative influences,

most claimed it was positive. One exporter put it: “At times when the Rand/Dollar exchange rate

was very high, we were able to survive in difficult economic times. We have a world-wide customer

base.” Many were able to buy machinery and other inputs such as raw materials when the South

African Rand was strong which made them more competitive when the currency weakened.

They did however indicate that the risks associated with currency fluctuation had to be managed.

International and domestic recognition

“Export quality” has a ring of endorsement. Domestic consumers feel that if it is good enough for

foreign markets, it should be superior to goods that are only sold in the South African market. One

exporter cited ”Proof that our products are "world-class".”

Selling to international markets enhanced the brand “especially by becoming an international brand”

and winning the “loyalty from export customers.”

Exporters felt that they “become a better business by understanding the level of product quality and

service required to be a business of international standing.”

A few South African provinces award “an exporter of the year” to recognise the achievements of

their local businesses. These awards are well publicised and winners get suitable recognition.

Social benefits

People are social creatures and like to meet new friends. Exporting allows the to do this and as one

exporter put it “we have met numerous interesting people and have become good friends with

some of them. We have experienced many different cultures. I feel that it has benefited the country

too, to have the foreign currency coming in.” Another developed “valuable partnerships with

different companies in different countries.”

Social responsibility

Although mast of the exporters focused on economic and other commercial reasons for exporting,

social responsibility was also considered. One of the companies with less than five years exporting

experience said : “We have managed to uplift our community by employing more people, supplying

skills development and training, Keeping abreast with world-wide food trends. Meeting exporters,

DRAFT

importers, distributors and Supermarket chains. Foreign investment for South Africa. Sharing our

uniquely South African Products. Becoming a Fair Trade partner!” Another exporter, focusing on

green issues stated that they had “opened new materials for recycling Improved cash flow increased

sales”

1.2.6 How exporters are currently exporting

Most exporters sold directly to the end user (either B2C1 or B2B

2). Most larger exporters (that

employed more than 200 people) sold directly to businesses. Smaller exporters (employing less than

100 people) sold marginally more to consumers. In addition to this a few of the respondents sold

directly to the foreign parent company or to the branch a subsidiary.

Foreign import agents or distributors were the second most preferred channel to use. This channel

was marginally preferred by smaller exporters (with less than 50 employees).

A few exporters used South African export agents. Although both large and small exporters used

South African agents, smaller exporters proportionately preferred this channel.

International trading houses are of various types and forms. They exist in a number of countries and

their activities and organisation vary according to the historical background and the scenario in

which they operate as well as national priorities and government policies. They are known by

different names in different countries:

• Trading Houses in Canada and Hong Kong,

• Sogo Shosha (general Trading House),

• Semen S by product) in Japan,

• Comercializadoras in Latin America,

• OSCI (Opérateur Spécialisé en Commerce Extérieur) in France,

• EMC (Export Management Company) and ETC (Export Trading Company) in the USA,

• Export House in India.

They procure locally and sell internationally, they procure internationally and sell locally and they

also procure internationally and sell internationally. They have the flexibility and the agility to work

in many markets with many products simultaneously as international marketing is their core

business. They serve as commercial intermediaries between suppliers and buyers located in different

countries. To this end they adopt the role of merchants, consortia managers and trade facilitators of

various sorts. As merchants they buy and sell on their own account and earn a margin.

Given the history of South Africa as a trading nation, and the importance of trading houses generally

across the world. It is rather surprising that so few established exporters are using this channel to

sell products internationally.

1 Business to Consumer

2 Business to Business

DRAFT

Figure 8: Current export channels

1.2.7 Use of the Internet in exporting

Very few exporters actually used the Internet to sell their products or services using e-commerce.

Smaller companies (with less than 50 employees) will most likely to use e-commerce as a tool to sell

globally. Only 25% of these companies used e-commerce, compared to only 3% of the large

companies that used extensively. Almost 50% of the companies (small, medium and large) surveyed

did not use e-commerce at all.

The majority of firms that are use online sources for export market research, and to acquire

intelligence. Smaller companies tended to make use of the Internet extensively while large

companies used it somewhat. Of concern is that just over 30% of all respondents across all sizes of

companies only used the web on a limited basis, if at all. Nearly 10% of large companies did not use

the Internet for export research and intelligence if at all.

A similar picture emerges for the use of the Internet to promote a company’s, products and services

globally. Almost 40% of all the respondents did use this tool extensively while 30% used it on a

limited basis, if at all.

1.2.8 Comparative and competitive advantage

Firms export because they have some attribute that gives them some form of advantage in foreign

markets. These attributes have been debated and research extensively. It is important to understand

DRAFT

what actually drives exports so that these can be strengthened to stimulate new exporters or for

exporters to export more (either through new products, new markets or simply selling more in

existing markets).

Figure 9: Comparative and competitive advantage

Existing contacts in export market

As any business, relationships are critically important. Similarly, exporters considered the existing

contacts in the export market to be very important. More than three quarters of the companies

surveyed was 100 or more employees ranks the existing contacts in export markets is even a critical.

In fact, 42% of companies (that had between 100 and 200 employees) felt that they would not be

able to export without the network of international contacts.

Smaller firms also ranked the international interactions is important, but not as important as the

larger companies.

Trust is imperative when doing business across borders. There are often communication problems

that hamper the initial negotiations, but other aspects such as cultural and legal obstacles can

scarper lucrative deals. Therefore once networks have been established exporters tend to spend a

lot of time and resources in maintaining them. Even with modern communication technology, which

undoubtedly has made international trade easier, personal contact is necessary. Face-to-face

negotiations, together with social interaction strengthen commercial links.

0

50

100

150

200

250

300

350

Critical (without this we would not export) Very important Important Not important at all Not applicable

DRAFT

Figure 10: Existing contacts in export market

Firms in the transport, storage and communication sector, especially relied on personal

communication. Two thirds of the companies responded that they would not conduct international

business if it were not for personal contact. The remainder considered personal relationships to be

very important. Exporters of services also tended to rate personal contact to be very important.

Although it does not critical to the construction industry, all respondents in the sector replied that it

was critical (25%), while the remainder felt it was very important.

Exporters of textiles, clothing, leather goods, and footwear did not rate this aspect is important as

other manufacturing sectors did. This is rather surprising and bears further investigation. Exporters

of transport equipment valued personal contacts slightly lower than the apparel and footwear

exporters but this can be explained by the fact that most automotive exporters deal directly with the

parent company or subsidiaries. In the sector decisions are often made overseas and not in South

Africa.

Innovative products

Innovation is an important driver of productivity and economic growth and contributes to

sustainable economic development. Schumpeter described much of economic development to what

he termed “creative destruction”. This implies that new creative or innovative products existing

products in the either the local or the global marketplace. It is therefore not surprising that many

South African exporters attributed the success to having innovative products.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Critical (without this we would not export) Very important Important Not important at all

DRAFT

Figure 11: Innovative products

Manufacturers in particular, the food and fabricated metals sectors, relied on having innovative

products. However, exporters of services also relied on the innovative abilities to export. Established

sectors such as construction and mining did not rely on innovation to gain or retain their market

share.

Firms employing between 11 and 50 people relied on innovation the most. Thirty per cent of these

respondents claimed that having innovative products was critical for the export efforts and 80% of

them held that it was either critical, very important or importance. In this cohort 36% of the

respondents claimed that having their own research and development facilities was critical to the

export efforts, while a further 49% said it was either important or very important.

Large firms (with more than 200 employees) also attributed their export success to having

innovative products. However, only 10% of these firms claimed that it was critical. The majority of

firms that have been in business for longer than 10 years also recognised the importance of

innovation. More than a quarter of these firms would not export had it not been for their innovative

products. Practically, the entire cohort of these firms considered innovative products to or less least

be important to their exporting.

Very small firms with less than five employees, relied on innovative products. Forty per cent of these

respondents claimed that innovative products were either critical or very important to their export

drive.

Generally firms with less experience (five years or less) did not, however, recognise the importance

of innovative products.

0

10

20

30

40

50

60

70

80

Not important at all Important Very important Critical (without this we would not export)

DRAFT

Of all the firms considered having innovative products critical to the export efforts, 42% had their

own research and development departments and also considered that without this they would not

be in a position to export, A further 25% considered their research and development departments to

be very important.

• Innovative firms experienced the following barriers to expanding into foreign markets:

• Limited financial responses restricted access to finance (37%)

• High cost of imported inputs required for export purposes (53%)

• The high cost of undertaking marketing activities abroad (78%)

• High transport costs (67%)

• Lack of knowledge as to where to find practical advice or assistance (23%)

Productivity

Productivity is a measure of the efficiency of production. Productivity is a ratio of production output

to what is required to produce it (inputs). The measure of productivity is defined as a total output

per one unit of a total input. Although these definitions very general and insufficient to make the

phenomenon productivity understandable, it is a starting point, to understand the cost drivers in the

export competitiveness.

The majority of all firms, irrespective of the size, considered productivity to be at least important in

the export activities. Larger firms (with more than 200 employees) tended to view productivity

slightly more important than smaller firms (73% of these firms view productivity as either critical or

very important). Just over 50% of firms employing less than five people view productivity as being

critical or very important to the export ventures.

Exporters that were part of multi-national corporations, in particular, viewed productivity as

important to the export drive. However, the group that started in exporting due to meeting with

foreign visitors all agreed that productivity was important, with almost 90% considering it either

critical or at least very important to the export success.

DRAFT

Figure 12: Productivity

Inputs

Labour, capital, raw materials and energy inputs are required in the production process. When

looking at the aggregate results according to the various sectors, there is very little difference either

between the components and the sectors.

Raw materials

All sectors reported that the cost of raw material were critical, very important or important to their

export drive. A number of exporters of food products, beverages and tobacco products however did

not rate it as important at all. Similar inputs were made by exporters of basic metals, fabricated

metal products and machinery but the exception here is that a large proportion of the respondents

found raw material cost critical. Nevertheless as a whole the sector found raw material costs to be

important in their export drive.

Import parity pricing is a problem that does push up the cost of producing in South Africa. It can be

defined either as “A price charged for a domestically produced good that is set equal to the domestic

price of an equivalent imported good -- thus the world price plus transport cost plus tariff.”3 Or “the

price that a purchaser pays or can expect to pay for an imported good, thus the c.i.f. import price

plus tariff plus transport cost to the purchaser's location. This and the export parity price together

define a range of the possible equilibrium prices for an equivalent domestically produced goods”4

3 http://www-personal.umich.edu/~alandear/glossary/i.html

4 http://www-personal.umich.edu/~alandear/glossary/i.html

0

10

20

30

40

50

60

70

80

90

less than 5 6 - 10 11 -50 51 - 100 101 - 200 More than 200


DRAFT

Import-parity pricing often allows exporters to charge less to foreign buyers who then have a

competitive advantage over South African producers because they can acquire the raw materials

cheaper. One exporter did comment that: “we have all the skills and products - local raw material

cost based on import-parity pricing on good for the industry”. The upstream benefits of competitive

prices are not translating into cheaper inputs for downstream industries, which tend to be labour-

intensive.

Figure 13: Raw materials

Besides the impact of import-parity pricing South African manufacturers often have to import their

components and raw materials. South Africa’s geographic position does put it at a cost disadvantage

vis-à-vis its competitors. Manufacturers, particularly manufacturers of fabricated metal products,

and agricultural exporters felt that it was critical that they had competitively priced raw materials.

Labour costs

Labour costs are an important input for all economic activities and especially manufacturing

processes. However, it is not the cost of each worker that is important when looking at global

competitiveness, but rather the relative unit labour costs. The relative unit labour cost includes both

the wage rate and other aspects such as productivity. Both of these aspects are important.

Respondents made the following comments:

• South African labour is incredibly expensive compared to the rest of the world . Our labour

laws are the most prohibitive thing to export .

0

10

20

30

40

50

60


DRAFT

• A lot of the points above are very important but are extremely challenging when competing

in the world market. South Africa needs skills, technology and a dramatically improved work

ethics to improve efficiency to justify the increasing labour rates which used to be our

competitive advantage which no longer exists. When comparing our labour rates to

productivity we are no longer competitive. The only way to regain an advantage is through

improved skills and infrastructure to compete with other similar manufacturing nations.

On the positive side, one of the respondents claimed that the success of the export efforts were due

to a “well educated, motivated and experienced staff.”

Figure 14: Labour cost

Energy cost

Energy is important for all manufacturing activities. In South Africa, electricity (generated using coal

fired power stations) is almost the only form of energy used in industry. During the past three years

the price of energy in South Africa has risen dramatically. The National power utility Eskom, has

increased electricity prices in the order of 24.8%, 25.8% and 16% over the past three years. Over the

last seven years South Africa has had the highest increase in electricity prices in the world – double

that of the second highest country. The National Electricity Regulator of South Africa (NERSA) will

determine the price increases for the next three years early in 2013.5

5 http://www.fin24.com/Economy/Electricity-prices-chasing-jobs-away-20121207

0

10

20

30

40

50

60


DRAFT

Entities such as the Energy Intensive User Group say the price increases are too high and question

Eskom’s assumptions. It says that cost of electricity will threaten the competitiveness of South

Africa’s primary industries.

One of the respondents provided the following comment:

Cheap Inputs should all contribute to our ability to compete, but unfortunately South Africa does not

have cheap Labour, nor Energy, nor Capital. These are actually inhibitors to our competitiveness. I

would have preferred to see your survey range from: Positive to Negative Factors around

competitiveness as opposed to Importance.

Figure 15: Energy cost

Cost of capital

In capital-intensive sectors, the cost of capital is obviously more important than in labour-intensive

sectors. The cost of capital is determined largely by the interest rate, the tax rates, and depreciation

allowances. In addition, manufacturers obtain various incentives from the Department of Trade and

Industry and lower interest rates from the Industrial Development Corporation.

Agriculture (and Agro processing) has become more capital intensive over the past few years and

therefore it is not unexpected to see a cost of capital been critical or at least very important to the

sector.

0

10

20

30

40

50

60

70


DRAFT

Fabricated metal products is also very capital intensive, and factories are usually equipped with

expensive, heavy machinery that needs to be financed. But generally the manufacturing sector as a

whole is capital-intensive and relies on lower cost of capital.

Figure 16: Cost of capital

Economies of scale

The increase in efficiency of production as the number of goods being produced increases. A

company that achieves economies of scale lowers the average cost per unit through increased

production since fixed costs are shared over an increased number of goods. The average price of the

good drops and this contributes to improved competitiveness in both domestic and foreign markets.

Intuitively, it will been assumed that large companies would distribute the competitiveness to

economies of scale. This was indeed the case where 30% of firms employing more than 200 people

claimed that economies of scale were critical to the export efforts. Without economies of scale,

these firms would not have exported. A total of 70% of large firms indicated that it was either critical

or very important. Less than 2% indicated that economies of scale were not important.

0

10

20

30

40

50

60


DRAFT

Figure 17: Economies of scale according to the number of employees

All the firms that employ between the hundred and 200 people felt that economies of scale were

important, but only 15% felt it was critical to the export endeavours.

Most of the manufacturing sectors felt that economies of scale were important to the success in

international markets. There were a few exceptions, however, such as the textile, clothing, leather

goods, and footwear sector. In the sector, only 9% of the respondents considered economies of scale

to be critical.

0

10

20

30

40

50

60

70

80



DRAFT

Figure 18: Economies of scale according to sector

None of the manufacturers of products of wood felt economies of scale were critical, but 40% of the

respondents ranked them to be very important, while another 40% felt it was important. All the

manufacturers of chemicals and non-metallic mineral products felt that economies of scale were

very important (none of them felt it was critical). Generally exporters of mining products, business

services, and other services did not feel economies of scale were that relevant to the export

marketing efforts.

The ability to produce short runs competitively

Since the South African market is not very large, firms do not always enjoy the benefits of economies

of scale. It is hypothesised that South African firms should use their ability to exploit smaller market

segments. This is often referred to as niche marketing. Niche marketing often requires

manufacturers to have the ability to produce short runs competitively. It also requires a lot more

market research to understand the client’s needs better and to tailor a solution to meet those

needs.

Approximately 40% of all firms, of all sizes felt that this attribute was either critical or very important

to their ability to compete. More medium-sized firms (employing between 50 and 100 employees)

and manufacturers felt that this was important aspect of the competitive advantage.

Proximity to the market

Although South Africa is located in major sea routes, it is geographically far from the world’s major

markets. Transport costs and the time to get goods to the markets has been a negative factor in

South Africa, is export promotional efforts over the years. South African exporters have adapted to

this.

0

10

20

30

40

50

60

70


DRAFT

Only 15% of large firms (employing more than 200 people) and very small companies (employing less

than five people) considered the proximity to markets to be critical. This tends to indicate that

exports to South Africa’s neighbours and SADC in general are been undertaken by small emerging

enterprises or large established firms.

This trend should change as trade with African countries and especially South Africa’s neighbours

increases. Both the small emerging enterprises and the large established firms will have an

important role to play in this regard.

Figure 19: Proximity to markets

The transport, storage and implications sector expressed the need to be close to the markets with

half the companies responding indicating that the proximity was critical to the export efforts. Thirty

per cent of furniture manufacturers felt that it was critical to be close to the markets.

Although transport equipment is expensive to export only 15% of the respondents felt that the

proximity to the market was either critical or very important. The role of multi-national corporations

and global value chains is perhaps an important driving force.

Similar taste

The Linder hypothesis explains that international trade patterns are due to the similarity of the

demand structures of the various countries. Countries that have similar tastes will produce products

that are the same or similar and therefore could trade. The similarities could be determined by the

levels of income, culture, or even aspects such as the weather.

Only 42% of the companies that responded considered this aspect to be critical or very important.

Sixty per cent of very small companies (with less than five employees) considered the suspect to me

0

10

20

30

40

50

60

70

80



DRAFT

critical or very important. There was no discernible trend for companies that had been in business

for long periods of time compared to those that had recently started out.

Figure 20: similarity of tastes

Government grants or export incentives

Most government grants or export incentives have been prohibited by the WTO. Subsidies available

to South African firms are limited. In the past General Export Incentive Scheme (GEIS), and the

Category A and Category B Schemes provide a generous support to exporters, especially

manufacturers.

Most South African exporters included in the survey have therefore not had incentives, although

many would like to have these schemes reintroduced. It is therefore not surprising that the number

of respondents that indicated that government grants or export incentives were critical to the export

operations was relatively small.

Very small enterprises (that employed less than five people) tended to rely on these government

grants proportionately more. Most of the firm’s in this category are emerging exporters and

therefore have access to various grants (other than GEIS-type schemes).

“SA incentives do not cover market dislocation costs coupled with SA becoming aggressively

uncompetitive on a number of fronts (labour flexibility, labour working hours, poor productivity,

basic infrastructure, ongoing port shipment delay issues, no energy plan for LPG and sustained

supply).”

Critical (without this we would not export) Very important Important Not important at all Not applicable

DRAFT

Figure 21: similarity of tastes

Value chains

Most products are “made in the world’ and goods or services are therefore seldom produced in one

country and then exported to a final consumer. Production today involves an increasingly complex

process with intermediate inputs and supporting activities sourced globally from wherever it is most

efficient to do so. These processes are have come to be known as global value chains (GVC), and is

often defined as:

“A global value chain describes the full range of activities undertaken to bring a product or service

from its conception to its end use and how these activities are distributed over geographic space and

across international borders.6

South African firms are generally not well integrated into the international GVC. Approximately 20%

of the large companies that responded however did feel it was critical to their international

competitiveness, while more than two thirds felt it was very important and 95% felt it was

important..

6 www.globalvaluechains.org

0

10

20

30

40

50

60



DRAFT

Figure 22: value chains

From the small companies that responded almost a third felt it was critical to the competitiveness.

This is proportionally higher than any of the other sizes of companies. It would be presumed

therefore that these small firms have integrated into GVC through firms located in South Africa

(either foreign owned or domestic companies).

1.2.9 Growth

Most of the respondents indicated that they intended increasing the export revenue over the

coming year. This intervention was across-the-board and the growth did not depend on either the

size, experience, or, in which sector the exporters operated. A few of the exporters had already

concluded export orders for the coming year, while others were in the process of negotiations, and

yet others were simply looking for new markets. Most of the respondents were positive, but others

indicated that they were challenges that had to be overcome before they could increase the exports.

Many of the exporters indicated that they growth perspectives were strategic. One exporter for

example, had “a 20% growth target for the next five years” and “growth of at least 50% per year”.

Many exporters had focused on developing the global networks and were in the process of

appointing new agents and distributors. In some cases this was as a result of participating in foreign

trade missions or exhibitions.

A few of the respondents intended to increase the exports because of competition in the South

African market. Other respondents indicated that the domestic market was saturated for the

product and that exports were the only way for the organisations to grow. Exporters had increased

the productive capacity “increased capacity installed during 2012, could potentially double our

0

10

20

30

40

50

60

70

80



DRAFT

exports”, “Increase production from ~50k to ~80k over the next year. Similarly increase exports

number”, “WILL HAVE EXTRA PLANT CAPACITY”

Figure 23: Expectations to increase exports

Many of the respondents indicated that the plans were to diversify into Africa or to increase the

presence on the continent. A few were looking at neighbouring countries (Botswana, Lesotho,

Swaziland and Namibia) and other SADC countries. One exporter saw the upgrading of the rail

networks in the DRC (Democratic Republic of the Congo) and Kenya as an opportunity to increase

their export sales to the continent.

1.2.10 Product development

One of the goals of the National Export Strategy is to diversify South Africa’s current basket of goods.

In most instances this would imply attracting new exporters that have the capacity to produce new

products to venture into global markets.

Approximately 2/3rd

of the respondents indicated different products that they would diversify into.

In most cases, the domestication was into new product lines that related to the sector that they are

currently in. The list of these responses is included in Appendix??

0

10

20

30

40

50

60

70

80

90

100


Yes No Unsure

DRAFT

Figure 24: Assistance needed to diversify

Many of the respondents complained about the cost of developing new products or new markets. A

few felt that the government was not supporting development issues sufficiently. They were also a

few complaints about labour and BBEEE legislation.

Most companies indicated that they needed information and foreign market intelligence if they

were going to export new products. Although information is difficult and expensive to acquire, the

marginal cost of providing it to exporters and potential exporters is relatively cheap. Together with

the market intelligence, respondents felt that market research grants would contribute to the export

diversification efforts. Skilled staff was also a prerequisite for many firms to increase their export

turnover.

Although many firms highlighted the importance of pre-and post-shipment finance, it was not

generally as highly regarded something could do to help sell potential new products. Similarly, firms

to do not seem to require assistance when it came to developing products.

1.2.11 Challenge to expand in foreign markets

1. High cost of undertaking marketing activities abroad

2. High transport/transport-related costs, e.g. port dues, surcharges, etc.

3. High cost of labour relative to output

4. Productivity

5. Limited financial resources/restricted access to finance

6. Infrastructural/institutional bottlenecks in South Africa, e.g. port congestion, customs

delays, etc.

0

20

40

60

80

100

120

140

160

180

Product 1 Product 2 Product 3

Skilled staff Market research grants

Information/intelligence on foreign markets Pre- or post-shipment finance

Assistance to develop the product

DRAFT

7. High cost of imported inputs required for export purposes

8. Shortage of available personnel skilled in imports/exports

9. Lack of time to devote to a more active export drive

10. Difficulty in locating individuals/entities that are qualified to offer practical advice and/or

assistance

11. High expense associated with obtaining practical advice and/or assistance

12. Poor quality assistance from existing sources

13. National export website (portal)

1.2.12 Barriers to market entry

The learning curve for a new exporter is very steep. They have to learn what is required from them

in foreign markets, and then design and implement strategies to overcome the obstacles. It is

therefore not strange to see all the obstacles that were identified getting similar ratings from the

exporters.

The legal and regulatory obstacles as well as ensuring sufficient financial resources were available to

implement export marketing plans, ranked highly. Tariff barriers and access to accurate foreign

market information were seen as similar obstacles.

Figure 25: Barriers to market entry

0

50

100

150

200

250

300

Significant problem Moderate problem Every day problem No problems what so ever

DRAFT

Resources (financial)

Any enterprise, whether exporting not, needs adequate resources. These resources vary from

human capital, property, and finance. Finance seems to be the most important hurdles that

exporters have to face when developing new markets. The vast majority of exporters saw limited

finance is a significant that had to be overcome.

Figure 26: Resources (financial)

As would be expected, firms that had a higher turnover did not generally see access to finance as a

significant problem. Medium-sized firms was a turnover of between ZAR40 million and ZAR100

million considered the access to finance is either a significant or at best a moderate problem. This

can probably be attributed to the fact that these firms are in a growth phase and do not have

sufficient capital reserves to undertake the projects that are needed. Small firms, with a turnover of

less than ZAR4 million also found access to finance a significant or moderate problem.

In the comments that were made there are three some problems:

1. Access to finance

2. Cost of finance

3. Credit insurance

Access to finance

Foreign buyers rarely want to pay cash and advance for imported goods and services. Exporters

therefore have to do provide credit to the importer. The credit (30 days or 90 days) is provided by

0

10

20

30

40

50

60

70

Less than R4million Between R4 million

and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million

Between R100 million

and R500 million

More than R500

million

No problems what so ever Every day problem Moderate problem Significant problem

DRAFT

the exporter when the goods are received by the importer. The exporter therefore has to carry the

cost of finance, while the goods are transit.

Although numerous trade finance, methods and instruments have been developed to meet the

needs of traders throughout the trade cycle, it is not always readily available to all exporters,

especially emerging exporters or very small exporters.

Pre-shipment financing is for the period prior to the shipment of goods, to support pre-export

activities such as wages raw material and overhead costs that are needed as inputs for the

production of the goods that are going to be exported. Pre-shipment finance is especially important

to small enterprises because the international sales cycle is usually longer than the domestic sales

cycle. Pre-shipment finance can take the form of short-term loans, overdrafts or cash credits.

Exporters that responded made the following comments:

• Capital / funding is useful to take advantage of established positions to grow our brands to be

significant leaders and shareholders in export markets. South Africa has a wonderful

opportunity to this but lack of funding limits our possibilities.

• Capital tied up during manufacture.

• Lack of funds to develop larger supply base.

• not enough funding available and not prepared to accept personal surety.

• Capital tied up during manufacture.

Post-shipment finance on the other hand, is for the period following the shipment of the goods. The

competitiveness of exporters often depends on the ability to provide buyers with attractive credit

terms has described above, stop post-shipment finance ensures liquidity of the exporter until the

purchaser receives the products and the exporter receives payment. Post-shipment finance is usually

short term.

Cost of finance

The cost of finance, or the interest rate, varies across countries. Often, it is higher in South Africa,

then in many of the trading partners. This puts South African exporters as a disadvantage.

• this is a major problem with SMME (Small-, Micro- and Medium-sized Enterprises)’s in the wine

industry our sector does not cater specially for BEE (Black Economic Empowerment) businesses

in the wine industry and access to funding has to much red tape.

• difficulty obtaining trade finance.

• The costs to a small company are horrendous.

• The payment terms of large mining companies are not supplier friendly and dictates substancial

levels of working capital.

Although the South African commercial banks are well positioned to provide all the necessary

services to South African exporters that are established, they did not always appreciate the

developmental aspects. It is therefore important that the developmental financial institutions play a

big role in assisting emerging exporters develop new markets.

DRAFT

• DTI assists with some relief, but IDC (Industrial Development Corporation) does not recognise

an export marketing service as being worthy of assisting ! Black Empowered entities are

completely bereft of funds and banks will not assist.

• We were working in Mozambique for a very big South African client who did not believe in SME

(Small- and medium-sized Enterprises)’s This made me realise that large companies speak the

SME speak but don’t want them as they cut the rates in the market. We needed bridging

finance so we did not have to ask the client for quick payment turnaround which in turn gave

him knowledge on our cash flow which was a major disadvantage to us.

Credit insurance

It is more risky providing credit to foreign buyers, then it is to South African buyers. Legal systems

across the world are different and very expensive to use. Besides a commercial risk, there is also

political and transfer risk when dealing across borders. Credit insurance is an insurance policy and a

risk management product offered by private insurance companies and governmental export credit

agencies to business entities wishing to protect their accounts receivable from loss due to credit

risks such as protracted default, insolvency or bankruptcy.

Respondents felt that the cover offered to South African exporters was not comparable to that

available to the foreign competitors:

• Limited Credit Insurance companies, conservative risk policies.

• Credit guarantee not available on exports to Zimbabwe. Development of the market for our

brands requires terms which are a burden.

Foreign market information

Most of the exporters need accurate market intelligence. Approximately ¾ of the exporters surveyed

indicated that obtaining this foreign market information was either a significant or moderate

problem.

DRAFT

Figure 27: Foreign market information

The Department of Trade and Industry subscribes to a relatively comprehensive set of databases

that have a lot of information that the exporters require. There are also a number of foreign

Economic Representatives that can obtain sector specific information from the countries in which

they are based.

It would seem therefore that the problem is not the information itself, but rather how to ensure that

the information gets used by the people that need it.

Another problem faced by exporters is that many civil servants do not understand their business or

industry in which they operate. One respondent complained. “The lack of competence in the

Department of Agriculture when dealing with issues, critical to fruit export, imposed by foreign

nations. This could pose a threat to the entire export fruit industry.”

Legal or regulatory

Since international trade began, traders have been faced with regulatory barriers. Some of these

barriers have been imposed by the exporting nation while others (the majority) or imposed by the

importing nation. Unfortunately, no matter how well-intentioned the initial regulations may have

been, there is often rigid conformity to formal rules and excessive bureaucracy. This hinders and

even prevents enterprises from taking action or making decisions.

More than half the respondents felt that regulations or other legal requirements hindered their

entry into new markets. Almost 30% saw it as a significant barrier.

0

10

20

30

40

50

60

70

80

90



DRAFT

Figure 28: Legal or regulatory

Exporters felt that government could reduce bureaucracy and improve their response time in order

to assist exporters enter foreign markets. One exporter explained: “The timeframe that it takes to

get access to new markets runs between 10 and 15 years, due to government red tape and slow

response time.”

South African exporters seem to accept that there ought to be regulations and that they should

comply with them: “We record as it goes all legal matters whether in SA or in export countries and

ensure we comply.” It is necessary therefore to ensure that foreign traders also comply to ensure

that there is a level playing field.

Regulations however were considered to be a distraction: “Regulatory issues, changing legislation

withdraw management attention away from "making the Money".

Some of the regulatory barriers were as a result of South Africa’s own legislative and regulatory

framework. Respondents make comments such as:

• Registration of facility quite strict - Dept Agriculture

• Exports are being regulated much stricter (by DAFF) than imports and local products (DoH).

This is not only troublesome wrt our local users, but results in an uneven playing field in the

industry.

• Labour, local content, customs

• Different customs requirements in different countries. China requires almost impossible

meaningless documents that just complicates documentation with no real purpose. Would

help if our Dept Agric have talks to them to assure them about our own regulatory systems

in place and accept that

0

10

20

30

40

50

60

70

80

90



DRAFT

• Our own governments compliance requirements takes up to much valuable time

• DAFF personnel shortages

• Especially - Labour laws, mining law, BEE,

• BEE will kill the company in two years

Foreign regulations on food and wine also seem to present problems for exporters:

• Lack of funding to attend international buyers offices and promote. Nigeria - Nafdac number

for example, you need R50 000 to obtain before exporting, please assist.

• Nigeria is very difficult with NAFDAQ

• NAFDAC registration of wine in Nigeria is expensive.

• NAFDAC (NIGERIA)

• Phyto Sanitary regulations or agreements not in Place

• Phytosanitory, no bi-lateral trade agreements with some countries

• USDA laws

• Insurance (liabilities, food related)

• ISO 93485 and FDA

• Products obviously have to meet export markets' food safety requirements

Labelling and packaging legislation is often complex and difficult to comply with.

• EU and FDA Legislation regarding packaging requirements, and assignment of responsibilities

given the lack of personnel based there

• Translated back labels

• Obtaining the CE mark on our yachts

Quality

• Problems with establishing ISO 9000 qualification

• Registration of products in foreign markets take too long and the processes are very tedious.

• Registering products in certain countries can be a nightmare: such as South America and

Israel. Obtaining Freesale certificates etc. is a challenge

The regulatory burdens will not uniform across all countries. Exporters felt that it “depends on the

country - some places are better than others.” “Some markets like China and USA has got very

difficult regulations to enter market.” Another exporter made the comment that regulations are

“market dependant, but generally EU compliance suffices apart from N America.

Exporters also felt that the South African government could be more helpful in overcoming some of

the legal and regulatory barriers. They felt that there was “limited advice to Exporters of any system,

regulation changes etc”. SMEs did not have the necessary resources comply with regulations and

were therefore also affected: “It is very costly for a small business to obtain all the required

accreditations and certifications.”

The regulations often vary within countries: “Setting up franchise agreements in different countries

is very expensive. For example, in the USA, we have to set up a different franchise agreement per

state, as the franchise laws differ in some states.”

DRAFT

The sector needs assistance with understanding the technical regulatory requirements for boat

building in different countries and the level of compliance. For example some countries require

inspections and certifications that can cost an SME up to R50 000. This is not sustainable with small

boat orders. In addition the regional and provincial requirements differ in some countries eg

Australia and Brazil. If the dti were able to appoint sector specific technical experts to provide this

advice to the industry it would significantly reduce the barrier to entering a new market.

Exporters also had issues with trademarks both in South Africa (that needed to be protected from

foreign competition) and assistance with registering their trademarks internationally.

Negotiating contracts is difficult at the best of times, but it’s complicated with different legal

systems operating across the world. Exporters indicated a need for assistance with legal compliances

and contractual issues.

Tariff barriers

Tariffs have generally been used by countries either to raise revenue or to protect their domestic

industries. Even though tariffs have been coming down in the past two or three decades, almost

2/3rds of the respondents found tariffs to be a barrier when entering foreign markets. Tariffs were a

significant problem for 28% of the respondents.

Figure 29: Tariff barriers

Often countries will protect their own industries that are particularly sensitive (especially in terms of

creating or retaining jobs). Many countries simply have higher tariff barriers. In this regard

respondents made the following comments:

0

10

20

30

40

50

60

70

80

90



DRAFT

• Certain markets have barriers. Particular problem is lack of free trade agreements in several

Asian countries versus our competitor countries.

• Tariffs for wine exports some countries duties too high, SA need to reduce duty on wine to

increase sales

• India, Thailand - very high import duties on wine, makes our landed cost exorbitant

• China, India and Turkey have duties on our nuts

• Africa is the big problem in this respect

• China, India, Mexico

• India has a 35% import tariff for South African citrus. Russia and China also have but less.

Can it not be solved through our BRICS membership ?

• Only some countries such as S.America: their import duties are very high

• US import duties, make it prohibitive to export any cosmetics into the USA

• Customs and Government tax on the wine industry is too high. Out of a bottle of R18.00, the

farmer only gets R0.33,

• Especially in emerging markets where growth is coming from and wine consumption is new.

Help on this matter (reducing tariff barriers) should be made a priority.

• Please do something about import taxes/ surcharges into China!

• Japan, Israel, Europe

• Import duties of our products into the EU versus other African countries

• EU tariff change on concentrate fruit purees

• High tariffs in China, Philippines, north Africa (Kenya, etc.), and other

• India is potentially our biggest buyer as they love fruit (Hindu) but.... citrus is for example

duty'd by 40% plus. We are a member of BRICS and do not clash with their growers, but no

real action by our government. This matter is of unbelievable importance and can

conceivably change our fruit export landscape.

• Tariff in India is very high (30%) making the product very expensive to the end user.

• The most significant problem in Sub-Sahara is not so much the Tariff, but the fact that some

operators avoid it, hence rendering product "legally" imported unsaleable

• The current tariffs into Brazil are extremely high and do not encourage BRICS trade from a

boat building perspective.

• Cannot export to Brazil or India because of import duties (20 - 30%). Have to appoint local

agents/manufacturers who invariably cheat.

• Anti-dumping duties on imported steel ropes that are not even manufactured in S.A.!

• Asia and South America protect their markets more than SA does

• Duties on wine too high we as BEE company are unable to enter the industry being taxed the

same as the corporate companies is highly unfair which gives us disadvantage and barrier to

market entry.

Free Trade Agreements also made it difficult for South African exporters to penetrate foreign

markets:

• Competing against COMESA

• The South African LCV Market is based on the Thailand LCV (1 tonne Market). They have

critical mass, we don't but we have to follow their lead. For RSA companies to compete with

ASEAN countries we are restricted by their FTA.

DRAFT

• Certain Markets favour buying local (ie Nigeria) where there is a current ban of Imported

Office Furniture

Exporters suggested that government assist with the “difficulties and cost to get rebate/ bond store

up and running”

A few exporters complained about the South African port costs and felt that “ports are over

regulated and extremely expensive.”

One exporter felt that the South African VAT regulations presented a significant barrier to entering

new markets if “VAT on exports if not physically exporting.”

Customs (inefficient/bureaucratic)

Customs officials across the world are appointed to “protect their borders”. Therefore they often

come across as being obstructionist rather than facilitative. Nevertheless “the border” does present

significant problems to exporters. Almost 60% of South African exporters felt that the inefficiencies

and bureaucracies at the border did present a barrier to entering new markets. More than a fifth of

the respondents felt that inefficient bureaucratic customs practices presented a significant problem.

Figure 30: Customs (inefficient/bureaucratic)

Customs delays occur regularly especially in cases where officials have to examine the imports.

There are procedures that have to be complied with such as having the importers representatives

present when the inspections done. The containers seals may only be broken if certain conditions

are met. This inevitably causes delays. In other cases the volume of trade passing through customs

post is too large for the facilities. Exporters made the following comments:

0

10

20

30

40

50

60

70

80

90



DRAFT

• We almost lost the company this year due to a 5 month customs delay in Mozambique. I

would see a big benefit of Wesgro providing export support.

• Zimbabwe border is difficult

• Massive fines imposed on small human errors, and no motivations, explanations accepted.

• Serious delays at border post with Zimbabwe

• Problem releasing Safmarine containers in Genoa

• Barriers at destination port when importing from South Africa

In a few cases respondents complained about corruption at Customs “in the lands we export to, to

much corruption, our containers can be delayed for weeks while someone waits for his "fee".”

Bureaucratic & corrupt especially Africa.

Customs officials often seem to be “very high handed attitude places unnecessary extra costs on

incoming products to make exports expensive -- Customs do not help -- only hinder the process.”

Labour unrest at Customs (or even at the ports) can cause considerable delays. Even in South Africa

when “strikes delay imported goods therefore there is a delay in assembly thus late supply to

clients.” “Only when importing components, to combine with locally-made components, for later

export. Repeated delays experienced (when already late) in having goods released from customs.”

Manufacturing in bond:

• Difficulties and cost to get rebate/ bond store up and running

• For example, we were able to load LCL shipments in Durban. We have been banned by DBN

Customs from doing so and therefore, market is lost. SOS Bonded Warehouse cost is too

expensive. Although goods were always packed and loaded under Customs Supervision.

South African Customs could also be more helpful in “some 'challenges' in getting HS code

determinations from SARS”

Documentation is also a problem:

• Turnaround to prepare documents can be done more quickly.

Bias barriers (foreign buyers prefer using suppliers in their country)

Marketing is the process of communicating the value of a product or service to customers.

Marketing might sometimes be interpreted as the art of selling products. Domestic buyers will

naturally prefer to purchase from firms that can satisfy their needs and wants. Domestic suppliers on

the other hand, have better insight into the needs and wants of the domestic buyer. It is therefore a

marketing challenge for exporters to get foreign buyers to switch to their products.

This was not a significant problem for exporters and only 16% of the respondents saw Bias barriers

as a significant barrier to the export efforts

DRAFT

Figure 31: Bias barriers (foreign buyers prefer using suppliers in their country)

Since the bias barrier is generally a marketing problem, exporters have different experiences:

• Each market differs: Europe at the moment is pro-European wines, China has an enormous

bias towards French wines

• EU out of Spain / Morocco

• Chinese civil contractors have some 50% market share in Africa , and they purchase in China

preferably . we need to work with them at an early stage of the project , not when they need

to purchase , to add value

• Customers desire/need to buy local & purchase a certain defined Local Content on each

vehicle. China, Thailand & India are far more aggressive than RSA to stipulate Local Content

Requirements.

• Barriers to trade; like homologation or accreditations are some of the barriers, but we have

certain accreditations in place for those products that do require these certifications at some

of our factories.

Exporters that have developed unique products do not necessarily have a bias problem.

• Fortunately, this is not a problem for us. Our unique product must be sold to the user with

very little influence of the official "buyer"

Consumers are becoming more environmentally aware. Therefore importers are “Becoming more of

a problem due to Carbon Foot print and awareness and commitment in some natural food markets

to buy local and within a certain parameter.”

In this regard many of the respondents felt that branding South Africa better would contribute to

overcoming bias problems:

0

10

20

30

40

50

60

70

80

90



DRAFT

• Sometimes the perception of SA is not great

• It would help if South Africa and its wine industry and its history would be better would

publicised

• Over traded market, with limited effect of generic marketing for 'Brand SA'

Other problems that were highlighted that do not necessarily fall under this heading include:

• Our relatively high freight costs does sometimes make our products more expensive in such

countries where similar products can be bought locally.

• This is our biggest area of concern, we have no import duties, as others have, even not

official ones

• Bias barriers stem from our own country where WOSA does not represent the Black Business

in Wine sufficiently, government needs to mandate WOSA to empower and transform the

wine industry.

Resources (management time)

Doing business in international markets demands considerably more time and effort in doing

business domestically. This is especially true when developing new markets, and even more so for

managers that are starting out with exports. The learning curve is very steep for new exporters and

also for exporters developing new markets. Any mistakes are very costly and could even mean the

demise of the enterprise.

Exporters however seem to accept these challenges and only 15, 5% of the respondents indicated

that management time was a significant barrier to exports

DRAFT

Figure 32: Resources (management time)

Small and medium-sized companies experienced unique problems in this regard. Often the owner

was the CEO and export manager.

• Small-Medium companies cannot afford a full time export expert. Current management has

to manage exports.

• I was forced to spend 5 months in Mozambique as CEO due to the challenges we faced

there. This prevented me from growing other markets at the same time. It requires a

different type of manager to succeed in a new place. Need problem solving abilities.

• I work alone - everything want to have done, I do and everything I need to know, I have to

get to know myself

• As a small company we have to multi task

• Company too small to do everything. Technology is restricted to one person (myself, now

nearly 70 years old) and difficult to transfer to others.

South African exporters highlighted the time that bureaucratic issues demanded:

• Customs documentation needs to be managed right until time of departure

• SA Customs always have back logs and in need of improvement. Delays in getting

documentations in time.

• Our own governments compliance requirements takes up to much valuable time

• A disproportionate amount of senior management time is spent on Labour and regulatory

issues, and dealing with disfunctional government departments

0

10

20

30

40

50

60

70

80

90



DRAFT

• Substantial time is spent in managing external resources (industry support), which could

have been used to develop company strategy and execution.

Not only were management skills are barrier that also other skills:

• Highly skilled Engineers are scarce and expensive. We compete with attractive offshore

opportunities. At the lower levels, the skills level of technical staff is disappointing. It

requires money

Language and customs

Doing business in foreign countries is not the same as doing business in South Africa. There are

significant cultural and communication barriers that have to be overcome. South Africa is a culturally

diverse country and managers adapt easier to foreign cultures.

Although exporters did find the language to be a problem only 16% found it to be a significant

barrier.

Figure 33: Foreign languages and customs

Culture did not seem to be the greatest problem, rather it seemed to be communication in foreign

languages:

• Language and translation requirements

• China!!

0

10

20

30

40

50

60

70

80

90



DRAFT

• Language can be overcome by translators and trust can be built by spending time with

potential clients. Potential clients are just as scared of bad experiences as we are - take time

to build trust and stay true and honest

• A problem in some areas - i.e. Portuguese in Brazil, Mozambique and Angola. Otherwise

manageable.

• We are trying to enter the China market and need help with the language.

• Marketing of a highly technical product requires intensive interfacing with the Client. Good

translators add to the cost of marketing

• Angola, Mozambique have a definite language barrier.

• Doing business in a non-English speaking country without having agents or distributors is

challenging.

Non-tariff barriers

The use of nontariff barriers has risen sharply after the WTO rules led to a very significant reduction

in tariff use. These are trade barriers that restrict imports but are not in the usual form of a tariff.

Some common examples of NTB's are anti-dumping measures and countervailing duties, which,

although called non-tariff barriers, have the effect of tariffs once they are enacted. The WTO

expressly permits certain nontariff barriers in very limited circumstances. These are when they are

deemed to protect health, safety, sanitation, or depletable natural resources.

Despite the increase in the use of nontariff barriers, only 12,7% of exporters found these to be a

significant barrier.

Figure 34: Non-tariff barriers

0

10

20

30

40

50

60

70

80

90



DRAFT

Nontariff barriers experienced by South African exporters include:

• Phytosanitary regulations for non-threatening pests.

• EU trying to impose draconian measures for 2013 on interception of fruit with CBS (Citrus

Black Spot) Zero Tolerance. Fuelled by Spain despite the fact that CBS cannot be introduced

via fruit.Many EU countries do not have citrus production like the UK or Germany as an

example.

• Kenya, Tanzania and Uganda prohibit the import of wines over 14% alcohol. Many SA wines

are between 14-15% alchohol, especially the better quality red wines.

• Customer's credit availablity Import licence regulations

• Phyto sanitary - Eg exports to Indonesia's 238 million populace is fraught with difficulties to

the extent that it is virtually impractical. Yet Australia has few such barriers.

• Customers desire/need to buy local & purchase a certain defined Local Content on each

vehicle. China, Thailand & India are far more aggressive than RSA to stipulate Local Content

Requirements.

Foreign administrative barriers include:

• Time consuming and expensive visa applications

• Corruption (on the importing side) but this is outside the remit of our government to help.

South African domestic administrative barriers include

• The administrative compliance costs of the proposed Ad Valorem tax on boats over 10 m.

Whilst export boats are exempt and SME will be required to demonstrate customs and

excise security compliance and submit all administrative documentation as required by SARS

until such time and the vessel is exported.

• SABS is almost dysfunctional and much of our exported product requires international

certification which the SABS is unable to do. the consequence is extremely expensive and

time consuming certification in overseas countries (which always favour their own domestic

products)

Other information

DRAFT

Figure 35: Other information

Emergency recovery of equipment and personnel, dual passports

Transport costs from RSA not competitive with the rest of the countries

Production capacity

Competition from China & India

Packaging and Labeling regulations

Costs of establishing own infrastructure in an export market are prohibitive therefore appointment

of a distributor is necessary. Finding the right distributor is the main task and is very difficult without

assistance and is then even more difficult to reach finality with a prospective distributor without a

friendly contact in that country.

Cost of raw material and cost to transport to port

Perceived bad quality from Africa, bad workmanship

Cost of cheap products from china and India makes it difficult to trade

Make customs (the department of agriculture) less pedantic about requirements and have the ability

to use common sense. For example - we had difficulty exporting a fortified wine because a wine in

South Africa is defined as fortified if the alcohol is 15% but our alcohol is 14.83%. There is nothing

wrong with the wine - in fact it was awarded a Gold Medal in a local competition! We have resolved

0

5

10

15

20

25

30

35



DRAFT

the issue but if there is nothing detrimental to the product I feel we should be encouraging export by

making the process easier.

Testing methods and costs involved thereof

Customs and Reserve Bank approvals create massive admin cost base.

Strong value of the Rand makes our products less competitive

Thailand used to import RSA grapes & was one of our top buyers. The RSA's total ineptness in

dealing with Thai officialdom lost us that market.

If we have the capital to do extensive marketing and to ensure that we obtain all the relevant

accreditations as required by the Vessels Under Pressure and to give all our employees the required

external qualifications we would be able to market our product more extensively

Additonal charges being levies (ie: SAWIS, Dept of Agriculture) charges are high and thus making our

wines uncompetitive. These charges should be raised on the farmers and not wholesalers. We are

competing with wines from Chili and these are very much cheaper and these wines are encroaching

on our markets. EUR1 Allocation are not sufficient for the year and this also makes the prices more

expensive for the importers (Reunion). Thus, we are losing out on orders.

High cost of raw materials (particularly steel) with which to fabricate goods. Indian manufacturers

can fabricate and sell at a profit for less that the cost of raw-materials in SA. BRING BACK GEIS for

exporters of SA-developed products, or at least facilitate the purchase of steel at export prices for

genuine exporters (easy to monitor).

Religious holidays & different working days

who can assist when an order does not materialize into a Letter of Credit ? which financial

institutions are willing to assist and at what terms ?

General comments

Corruption, bribes and gift expectance

we need some form of encentive to be competitive

Raw material ,labour and electricity cost are to high te compete in foreign countries

Cashflow requirements of capital investment

beaurocracy between non SADC member African countries

Market access to South Korea on Grapes, to Japan on additional varieties of Grapes (Barlinka is all

that is allowed and it is already a redundant variety.

We have limited vessels calling the Seychelles Market. Goods for this market is being sourced from

Dubai who is offering a cheaper freight rate. High Piracy surcharge is being levied by shipping lines.

Also making our freight charges uncompetitive.

DRAFT

Relatively high cost of labour compared to Asian countries.

Foreign currencies restrictions in many territories.

Corruption and vested interests. Nationalization and political interference in some countries has

created uncertainty as to who owns property rights Political leverage towards generating payments

to remove the problem Cash flow management and timeous payment ( payments delayed) Growing

the budget to match escalation requirements, forex adjustments and changes in scope - even though

these are not contested.

1.2.13 Business collaboration

Collaboration is a working practice whereby individuals or enterprises work together to a common

purpose to achieve business benefit. Collaboration is often formalised but also can be informal.

Collaboration is important as globalisation builds up. As SMEs are exposed to global competition,

isolated firms face increasing difficulty in penetrating foreign markets. Due to the relatively small

quantities produced by SMEs, they find it difficult to compete with the low-cost products of

multinational companies that are able to exploit economies of scale. In addition, product life cycles

have become shorter, calling for increased product and service development. These enterprises do

not have the financial means and know-how to successfully position their products in foreign

markets.

In many countries collaboration is an established practice. Baldoni et al (1998) claim that “inter-firm

cooperation in Italy has mainly been associated with the widespread presence of cooperatives and

consortia. Along with the traditional productive and consumption cooperatives, established by

individuals, a wide array of consortia, founded by firms, has developed since the early 1950s.”

Collaboration with a selected few firms has been shown to positively impact firm performance and

innovation outcomes (Eisingerich, Rubera, and Seifert 2009). The recent improvement in technology

has provided the world with high speed internet, wireless connection, and web-based collaboration

tools like blogs, and wikis, and has as such created a "mass collaboration." People from all over the

world are efficiently able to communicate and share ideas through the internet, or even

conferences, without any geographical barriers. The power of social networks it beginning to

permeate into business culture where many collaborative uses are being found including file sharing

and knowledge transfer.

Business collaboration includes:

• Export consortia;

• Cooperatives;

• Industry associations or even

• Export Councils.

The vast majority of South African firms have not had any form of collaboration and the number of

firms that had experienced negative impact when they participated.

DRAFT

Figure 36: Business collaboration

Figure 37: Participation in an export industry

network/cluster

Figure 38: Export consortia

0

50

100

150

200

250

300

Participation in an

export industry

network/cluster

Export

Consortium (joint

export marketing

initiative)

Joint venture with

a foreign partner

to export products

Regular supply of

components to a

high performing

exporting

company

Membership of an

industry

association

Membership of an

export council

Membership of an

business chamber

Negative impact Never collaborated with another company this way Positive impact

0

20

40

60

80

100

less than 5 6 - 10 11 -50 51 - 100 101 - 200 More than

200

Positive impact

Never collaborated with another company this way

Negative impact

0

20

40

60

80

100


200

Positive impact


Negative impact

DRAFT

Figure 39: Joint venture with a foreign partner

to export products

Figure 40: Regular supply of components to a

high performing exporting company

Figure 41: Membership of an industry

association

Figure 42: Membership of an export council

Figure 43: Membership of an business chamber

Green et al (2005) point out that export consortia “are vivid examples of such inter-firm

cooperation, are a natural element of a cluster and network development strategy. Their potential

to further the development of inter-firm cooperation, also in areas unrelated to exports such as

quality improvements and upgrading of production methods, makes the development of export

consortia a practical first step in improving the business environment and economic activity in

0

20

40

60

80

100


200

Positive impact


Negative impact

0

20

40

60

80

100


200

Positive impact


Negative impact

0

20

40

60

80

100


200

Positive impact


Negative impact

0

20

40

60

80

100


200

Positive impact


Negative impact

0

20

40

60

80

100


200

Positive impact


Negative impact

DRAFT

general.” They explain that “members of export consortia retain their financial, legal and

management autonomy. Firms are thus able to realize their strategic objectives by grouping into a

separate legal entity which does not imply a loss of identity for any member.”

1.2.14 Export services

Exporters need the assistance of many service providers to assist with various aspects of an

exporting enterprise. The services range from supply-side, through to marketing and other demand

–side activities.

Figure 44: Export services

Most services were used regularly by exporters. Some services, especially those related to logistics,

and finance, were widely used. Indeed, it is surprising that they were even a few companies that

were unaware of these services.

0

50

100

150

200

250

300

Pro

du

ct d

eve

lop

me

nt

Pro

du

ct q

ua

lity c

on

tro

l

Pa

cka

gin

g d

esi

gn

Ma

rke

tin

g r

ese

arc

h (

incl

ud

ing

info

on

pro

du

ct a

nd

pa

cka

gin

g…

Ma

rke

t/co

mp

eti

tor

inte

llig

en

ce

Tra

de

lea

ds/

ten

de

rs

Ass

ista

nce

wit

h f

ore

ign

tra

de

fa

ir p

art

icip

ati

on

Tra

nsp

ort

(se

a,

air

, ro

ad

, ra

il)

Fre

igh

t fo

rwa

rdin

g/l

og

isti

cs m

an

ag

em

en

t

Pro

du

ct in

spe

ctio

n

Pa

ckin

g s

erv

ice

s

Pro

du

ct c

lass

ific

ati

on

(fo

r cu

sto

ms

pu

rpo

ses)

Do

cum

en

tati

on

acq

uis

itio

n/c

om

ple

tio

n

Cu

sto

ms

cle

ara

nce

Ma

rin

e (

carg

o)

insu

ran

ce

Wa

reh

ou

sin

g

Fin

an

ce f

or

pro

du

ctio

n e

xpa

nsi

on

to

me

et

fore

ign

…

Pa

ym

en

t p

roce

ssin

g a

nd

/or

gu

ara

nte

es

(ba

nks)

Cre

dit

insu

ran

ce

Fo

reig

n e

xch

an

ge

ris

k m

an

ag

em

en

t (i

ncl

. fo

rwa

rd c

ov

er)

E-c

om

me

rce

fa

cili

tati

on

Co

nsu

lta

ncy

re

late

d t

o c

ust

om

s d

uty

re

fun

ds

an

d d

raw

ba

cks

Co

nsu

lta

ncy

re

late

d t

o a

cce

ssin

g t

rad

e a

gre

em

en

ts

Leg

al s

erv

ice

s -

Ass

ista

nce

wit

h c

on

tra

ct f

orm

ula

tio

n

Leg

al s

erv

ice

s -

Pa

ten

t o

r tr

ad

em

ark

re

gis

tra

tio

n

Leg

al s

erv

ice

s -

Dis

pu

te r

eso

luti

on

Leg

al s

erv

ice

s -

Ass

ista

nce

in e

sta

blis

hin

g a

n o

ff-s

ho

re…

Ad

ve

rtis

ing

, p

ub

lic

rela

tio

ns,

etc

.

Ide

nti

fyin

g a

pp

rop

ria

te f

ore

ign

ma

rke

t d

istr

ibu

tio

n c

ha

nn

els

…

Info

rma

tio

n o

n in

ve

stm

en

t/jo

int

ve

ntu

re o

pp

ort

un

itie

s (l

oca

l…

Off

icia

l sta

tist

ics

on

co

nsu

mp

tio

n,

pro

du

ctio

n,

tra

de

tre

nd

s,…

Tra

nsl

ati

on

se

rvic

es

Tra

ve

l arr

an

ge

me

nts

Use service regularly and satisfied Use but NOT satisfied We never use but could in future

We never use and never will Unaware this service offered

DRAFT

In the category they were dissatisfied customers. The categories are frustrated exporters are most

were:

• Marketing research (including info on product and packaging specifications, and tariff rates);

• Market/competitor intelligence;

• Trade leads/tenders;

• Identifying appropriate foreign market distribution channels and selling techniques;

• Information on investment/joint venture opportunities (local and foreign) ; and

• Official statistics on consumption, production, trade trends, and foreign market import

statistics, etc.

A large proportion of exporters were generally unaware of the number of the services that were

available to them. Even government services that were designed to assist exporters and were

available freely, were not publicised enough. Very small enterprises were generally mostly affected

by this phenomenon, but even very large corporations were often unaware of key services.

Product development

In today’s global environment, consumers are faced with new and exciting products daily. Been

competitive in price is not enough to succeed globally, especially in consumer markets. Developing

new products is often a complex process that starts with idea generation and screening. This is

followed by prototyping, concept development, and testing. Besides, engineering and technical

aspects of product development, the product must be suitable for the market and this also requires

considerable research, including business analysis beta testing and market testing.

Although many exporters have services in-house that develop new ideas and concepts; and even

able to take the idea to market, this is not common practice. Large firms (with a turnover greater

than ZAR100 million) tended to use product development services proportionately more than

others.

Small firms (with a turnover of less than ZAR4 million) on the other hand, were unaware that the

service was even offered. Many of these firms deal in crafts and gifts. Although developing new

products in this range does not require extensive technical knowledge and skills, it is very important.

Exporters of these products cannot simply take these products to foreign markets, year in and year

out. Neither can a copy ideas from foreign competition. They need to produce innovative goods that

customers either need or want. Therefore, more attention should be given to making the services

known to exporters and potential exporters (especially very small enterprises and cooperatives).

DRAFT

Figure 45: Product development

Product quality control

The importance of the quality of everything that is used or consumed is either taken for granted or

overlooked. Both consumers and producers rely on the quality of the products that they purchase. In

many cases there are official standards that determine what the quality levels of certain products

and services should be. In other cases there are voluntary standards that have to be adhered to.

Importers do not have easy recourse if the products they buy from South African exporters are of

substandard quality or in any other way faulty. They therefore rely on international standards and

bodies that verify the standards.

In today’s global market, standards are crucial to realise and maintain market access. Domestic

producers no longer have a secured home market. Local manufacturers are now faced with

competition in the domestic market, from cheaper goods produced from other countries. Therefore

local manufacturers have to produce goods of a high quality in order to secure their share of the

domestic market.

South Africa is a very small market and it is therefore imperative that manufacturers expand their

exports. These should be exports that are on par with international standards, such as those of the

International Standards Organisation (ISO). The fact that the number of ISO certified firms in South

Africa are increasing, shows the increasing importance of ISO in the eyes of local manufacturers.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Larger exporters tended to use these services proportionately more than smaller exporters. Again a

concern is that very small enterprises (was a turnover less than ZAR4 million) are unaware of the

services offered locally.

Figure 46:Product quality control

Packaging design

Packaging (and labelling) so are twofold purpose: firstly, to protect the product from the time it

leaves the production facility until it reaches the final destination; and secondly a marketing

function. Similarly, labelling provides important (often compulsory) information, but also serves a

promotional or marketing function.

Packaging is the science, art, and technology of enclosing or protecting products for distribution,

storage, sale, and use. Packaging also refers to the process of design, evaluation, and production of

packages. Packaging can be described as a coordinated system of preparing goods for transport,

warehousing, logistics, sale, and end use. Packaging contains, protects, preserves, transports,

informs, and sells. In many countries it is fully integrated into government, business, institutional,

industrial, and personal use (Soroka 2002).

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Figure 47: Packaging design

Again this service is widely used by larger exporters. Less experienced exporters and small

enterprises tended to be unaware that packaging design services were available. Surprisingly, almost

10% of firms that had exported for 10 years or more were also unaware that the services were

offered. It could be that they have been advised on packaging requirements by their foreign clients

and have the necessary technical skills in-house.

Marketing research (including info on product and packaging specifications, and tariff

rates)

Market research involves finding out about how to do business in foreign countries and includes

aspects that exporters must know such as import duties, regulations, distribution channels, market

size and growth, competition, demographics and local production. Without this information, it is

impossible or very difficult for exporters to assess foreign market opportunities and the costs of

capturing them. Gathering this information is usually straightforward and helps exporters

understand how a market operates.

The basic gathering of information is relatively basic and is often done in-house by the exporters

themselves. There is a lot of information available on the Internet and in published sources that

exporters (who know how to access this information) can acquire relatively cheaply and without too

much effort. Foreign Economic Representatives also play a valuable role in this regard. However, it is

necessary that the exporter knows what information is required before embarking on this research

themselves.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Larger exporters (with more than 200 employees) used marketing research consultants

proportionately more regularly than the other smaller exporters. These exporters also tended to be

less satisfied with the services that were offered.

Figure 48: Marketing research

Although market research services were not used by medium and smaller sized exporters, the

respondents did indicate that they were willing to use the services in the future. Hardly any of the

respondents ruled out using the service in the future.

Experienced exporters, (with more than 10 years) tended to use the service far more regularly and

were satisfied with the services that were offered. More than 40% of this cohort used the service

regularly. Of these exporters, 20% were not happy with the services they had received.

Only 15% of very small exporters used a service regularly and were satisfied with it. A further 40%

had used as a service but were unsatisfied. Almost a quarter were unaware of the service. It seems

that with experience firms acquire skills in discerning who can provide the service is required

efficiently and effectively.

Market and competitor intelligence

There is overlap between normal market research and competitive intelligence. Basic market

research is relatively simple. However, acquiring competitive intelligence is more difficult and

requires considerably more skills.

0

10

20

30

40

50

60

70

80

90




DRAFT

Competitive intelligence involves the defining, gathering, analysing, and distributing intelligence

about products, customers, competitors. Competitive intelligence is an ethical and legal business

practice, as opposed to industrial espionage which is illegal. Competitive intelligence focuses on the

external business environment.

Figure 49: Market and competitor intelligence by size of enterprise

More experienced firms tended to use competitive intelligence professionals more regularly than

less experienced exporters. Similarly, firms (with less than five years export experience) were

unaware of the services that competitive intelligence professionals could provide. Hardly any of the

exporters indicated that they would never use the services, but those that did have far more

experience exporting.

A large proportion of more experienced exporters, that tended to use the service, were not satisfied

with the services that were offered.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Figure 50: Market and competitor intelligence by experience

Trade leads and tenders

Whereas market research tends to be a more proactive activity, trade leads generally tend to be

more reactive. Many exporters subscribe to various services that inform them of tenders and other

international trade leads. It is then up to the exporter to follow up on these leads.

0

20

40

60

80

100

120

140

160

180

Less than one year More than 1 year less

than 3 years

More than 3 years less

than 5years


than 10 years

More than 10 years



DRAFT

Figure 51: Trade leads and tenders by size of company

Besides the subscription services that are commercially available to exporters, the South African

government through the Department of Trade and Industry to provide trade leads.

It is important that both the commercial and government provided trade leads are pre-screened and

sent to exporters and potential exporters in time. Unless exporters receive the tenders, timeously

and react immediately, the chances are that they will not be in a position to get the business.

Larger exporters tended to use trade leads and tenders more regularly than smaller exporters. Very

few of the very small companies actually use trade leads and those that did indicated that they were

generally not satisfied with the services that were provided.

Only 15% of the companies that had exported for less than a year used trade leads successfully. A

further 25% use trade leads, but were not satisfied. Almost a quarter of inexperienced exporters

were not aware of trade leads or tenders that were available.

0

10

20

30

40

50

60

70

80

90




DRAFT

Figure 52: Trade leads and tenders by experience of the exporter

Most of the respondents that were not using trade leads, indicated that they would consider it in the

future.

Of greater concern is the number of exporters, both large and experienced, and small and

inexperienced, that will unaware of trade leads and tenders.

Assistance with foreign trade fair participation

Participation in international trade fairs, has proven to be a successful and useful tool in the process

of internationalisation of businesses. Both exporters and importers attend exhibitions. A number of

specialised exhibitions have become recognised globally and all participants attend.

Exporters often use exhibitions to test markets, attract customers, appoint agents, distributors, and

even make direct sales.

The South African government through the DTI assist exporters, both financially and logistically to

attend international trade fairs.

Most of the respondents indicated that they attended trade shows regularly and were satisfied.

There were some firms, especially medium-sized and larger firms that had unsuccessfully

participated in international trade fairs and were therefore not satisfied with the outcome.

Of particular concern is the number of firms (experienced exporters) that were unaware of the

services that government offers in respect of participation in foreign trade fairs.

0

20

40

60

80

100

120

140

160

180

Less than one year More than 1 year less

than 3 years


than 5years


than 10 years

More than 10 years



DRAFT

Figure 53: Assistance with foreign trade fair participation

Transport (sea, air, road, rail)

0

10

20

30

40

50

60

70

80

90

less than

5

6 - 10 11 -50 51 - 100 101 - 200 More

than 200

Unaware this service offered

We never use and never will

We never use but could in future

Use but NOT satisfied

Use service regularly and satisfied

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years

less than

5years

More than

5 years

less than

10 years

More than

10 years






DRAFT

Figure 54: Transport (sea, air, road, rail)

Freight forwarding and logistics management

The freight forwarding and customs compliance industry provides for the distribution and carriage of

goods, cargo and freight internationally. According to SAQA it has been estimated that logistics as a

whole constitute at least 14% of the costs of the goods in South Africa, which is at least 50% above

the global norm. A large proportion of this overspend is attributed to inefficiencies caused by lack of

competence. In order to become world competitive, South Africa needs to deliver its goods on time,

at the right place and at an acceptable cost. In order to do this requires the establishment and

maintenance of world class supply chains.

Despite the high costs of logistics in South Africa most of the exporters that responded to the survey

indicated that they were satisfied with the services provided by freight forwarders. In South Africa

there are a large number of freight forwarders ranging from multinational corporations with

extensive networks in all major markets too very small companies. Competition in the sector is very

healthy and exporters have a wide range of companies from which to choose to provide them with

freight forwarding services.

The South African Revenue Services ensure that all freight forwarders meet certain minimum

standards and therefore it is not unsurprising that exporters seem to be satisfied with the services

provided by the freight forwarding industry.

0

10

20

30

40

50

60

70

80

90




DRAFT

Figure 55: Freight forwarding and logistics management

Other services that may be provided by freight forwarders:

Dangerous Goods:

• Accept and process dangerous goods for transportation by air.

• Facilitate the forwarding and clearing of dangerous goods for transportation.

• Handle dangerous goods during warehousing and storage.

• Identify and classify dangerous goods for transportation.

• Identify, pack, mark and label dangerous goods for transportation by air.

• Load/unload dangerous goods for transportation by road.

• Pack, mark, document and handle export dangerous goods by surface.

• Package dangerous goods for transportation.

Finance:

• Generate shipment cost estimates.

• Perform international trade calculations.

Customs:

• Analyse and solve Customs tariff classification problems.

• Certify certificates of origin and other commercial documents.

Insurance:

• Comply with procedures in respect of lost, discrepant and damaged cargo.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

• Apply the law of contract to insurance.

• Arrange and administer insurance of goods in transit.

Product inspection

Importers cannot be sure that what they have purchased meets the requirements specified in their

contract until they take possession of the goods and can inspect them. This has caused problems

over the centuries and various solutions have been adopted and become industry norms or

standards.

Product inspection can be undertaken by government agencies or by the private sector. Société

Générale de Surveillance (SGS), one of the better known product inspection companies, is a

multinational company headquartered in Geneva, Switzerland which provides inspection,

verification, testing and certification services. It has around 75,000 employees and operates over

1,350 offices and laboratories worldwide. SGS provides inspection and verification of the quantity,

weight and quality of traded goods, the testing of product quality and performance against various

health, safety and regulatory standards, and to make sure that products, systems or services meet

the requirements of standards set by governments, standardization bodies or by SGS customers.

The South African Department of Agriculture Forestry and Fishery also test products destined for

foreign markets in terms of the various international agreements to which South Africa is a

signatory. The most prominent of these have been signed under the auspices of the World Trade

Organisation:

• Technical Barriers to Trade Agreement

• Sanitary and Phytosanitary Agreement

These technical regulations generally make provision for the protection of human or animal life, to

protect plants or even to protect the interests of the country.

Most of the respondents indicated that they do use various product inspection services regularly and

are satisfied with the services that these companies provide.

DRAFT

Figure 56: Product inspection

There are a few sectors that use product inspection services regularly. These include:

• food products;

• textile and clothing;

• wood and wood products;

• chemicals; and

• wholesalers and retailers.

It is surprising that even the sectors and other sectors particularly agriculture that the awareness of

product inspection services is so low.

Product classification (for customs purposes)

Historically countries have used duties to raise import revenues. Some products attracted a higher

rate of duty than others. Over time the tariff rates became more a more complicated and countries

developed systems to classify products. Different countries have different systems and this

complicated international trade considerably. The Harmonised Commodity Description and Coding

System (HS) of tariff nomenclature is an internationally standardised system of names and numbers

for classifying traded products developed and maintained by the World Customs Organisation

(WCO), an independent intergovernmental organisation with over 170 member countries based in

Brussels, Belgium.

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million






0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ag

ricu

ltu

re

Min

ing

Ma

nu

fact

ure

of

foo

d p

rod

uct

s, b

ev

era

ge

s a

nd

to

ba

cco

…

Ma

nu

fact

ure

of

text

ile

s, c

loth

ing

, le

ath

er

go

od

s a

nf…

Ma

nu

fact

ure

of

wo

od

an

d o

f p

rod

uct

s o

f w

oo

d

Ma

nu

fact

ure

of

pa

pe

r a

nd

pa

pe

r p

rod

uct

s

Pu

bli

shin

g,

pri

nti

ng

an

d r

ep

rod

uct

ion

of

reco

rde

d m

ed

ia

Ma

nu

fact

ure

of

che

mic

als

an

d n

on

-me

talli

c m

ine

ral…

Ma

nu

fact

ure

of

ba

sic

me

tals

, fa

bri

cate

d m

eta

l p

rod

uct

s…

Ma

nu

fact

ure

of

tra

nsp

ort

eq

uip

me

nt

Ma

nu

fact

ure

of

furn

itu

re

Oth

er

ma

nu

fact

ure

d p

rod

uct

s

Co

nst

ruct

ion

Wh

ole

sale

an

d r

eta

il

Tra

nsp

ort

, st

ora

ge

an

d c

om

mu

nic

ati

on

Fin

an

cia

l se

rvic

es

Bu

sin

ess

se

rvic

es

Oth

er

serv

ice

s

DRAFT

Figure 57: Product classification (for customs purposes)

It is important for exporters to get the classification of their products correct. The first six digits of

the harmonised system are the same for all countries using the coding system. Incorrect tariff

classifications could lead to incorrect duties being paid. Customs officials are also entitled to impose

fines when incorrect codes have been used. In South Africa this occurs both for imported and

exported products.

In most cases freight forwarders classify the products for the exporter and is usually done as part of

the logistic services they provide. The importer or the exporter however ultimately remains

responsible.

Documentation acquisition and completion

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Figure 58: Documentation acquisition and completion

Customs clearance

Customs brokerage is a profession that involves the "clearing" of goods through customs controls at

border posts for importers. This involves the preparation of documents and/or electronic

submissions, the calculation and payment of taxes, duties and excises, and facilitating

communication between government authorities and importers.

Although it is possible for companies or even individuals to clear their goods through customs, and

the processes are generally very complicated and importers require assistance. Some larger

companies however do have “in-house” customs brokers that perform the necessary processes and

pay the necessary fees on behalf of their companies.

As with freight forwarders (the same company often performs freight forwarding and customs

clearing functions) there is a lot of competition. Importers therefore have a wide choice and can

change whenever they are not satisfied with the services that have been delivered.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Figure 59: Customs clearance

Marine (cargo) insurance

Marine insurance is an important part of the cost of shipping goods internationally. It has a long

history stretching back to ancient times and is therefore very well developed. It covers the loss or

damage of ships, cargo, terminals, and any transport or cargo by which property is transferred,

acquired, or held between the points of origin and final destination.

However many Incoterms® put an obligation on the exporter to include the cost of insurance in the

quotation. Since many importers request this South African exporters have to obtain it. (This does

not mean however that the exporter has to lodge the claim if any losses realised during the export

process.)

Generally exporters use the “Institute of cargo Clauses”7. This is a set of terms for cargo insurance

policies voluntarily adopted as standard terms by many international marine insurance

organisations, including the Institute Of London Underwriters and the American Institute of Marine

Underwriters. Widest insurance cover is provided under 'Institute Cargo Clause A', a more restrictive

cover under 'Institute Cargo Clause B', and the most restrictive cover under 'Institute Cargo Clause

C.' (These clauses have replaced the older 'All Risks,' 'With Average,' and 'Free Of Particular Average'

clauses.)

7 Read more: http://www.businessdictionary.com/definition/institute-cargo-clauses.html#ixzz2G8RqHVLL

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Figure 60: Marine (cargo) insurance

Warehousing

Warehousing in international trade is essential. It is a commercial building for storage of goods,

usually equipped with loading docks to load and unload goods from trucks. Sometimes warehouses

are designed for the loading and unloading of goods directly from railways, airports, or seaports.

They often have cranes and forklifts for moving goods, which are usually placed on ISO standard

pallets loaded into pallet racks. Stored goods can include any raw materials, packing materials, spare

parts, components, or finished goods associated with agriculture, manufacturing and production.

Large exporters often use warehouses as distribution points for developing retail outlets in a

particular region or country. This reduces end cost to the consumer and enhances the production

sale ratio. Further, “Just In Time” (JIT) techniques promote product delivery directly from suppliers

to consumer without the use of warehouses. However, with the gradual implementation of offshore

outsourcing and offshoring in about the same time period, the distance between the manufacturer

and the retailer (or the parts manufacturer and the industrial plant) grew considerably and requires

warehousing.

E-commerce is expanding as the communication infrastructure improves, payment methods become

more sophisticated and reliable, and consumers more confident. Internet-based stores do not

require physical retail space, but still require warehouses to store goods. This kind of warehouse fills

many small orders directly from end customers rather than fewer orders of many items from stores.

Although the trend is growing internationally, few South African exporters have exploited this

technology to expand into foreign markets.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

South African exporters therefore need warehouses based both locally and in foreign countries to

ensure that they remain competitive and can meet the needs of their foreign buyers.

Figure 61: Warehousing

Finance for production expansion to meet foreign orders or to supply foreign markets

Exporters are generally on the cutting edge of entrepreneurship and always looking for

opportunities to expand either to develop new markets or new products, or simply to penetrate

existing markets. To develop and expand finance is always needed. Often this is obtained from

retained earnings. This however may not be adequate especially when faced with global

opportunities.

Access to finance is therefore critical to expand production to meet foreign orders or to supply

foreign markets. Fortunately South African has a very well developed banking and financial system

that generally provides sufficient services to exporters.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Figure 62: Finance for production expansion

Surprisingly few of the firm’s that were surveyed had accessed finance to expand production

facilities. Those that had, were generally larger firms, or firms that had been exporting for some

time. A large number of the respondents did however indicate that even though they had not

accessed finance for production expansion would consider it in the future. There are also a number

of firms that were unaware that finance was available.

Payment processing and/or guarantees (banks)

All international commercial transactions require the transfer of money from one jurisdiction to

another. This invariably requires the services of a financial institution such as a bank. The funds are

usually transferred using “documentary credits”. These are also known as a letter of credit, L/C or

DC. A documentary credit is a written undertaking by a bank (the issuing bank), at the request of an

importer/buyer (the applicant), in favour of an exporter/seller (the beneficiary), whereby the bank

agrees to pay against bills of exchange (drafts) and/or commercial documents that comply with the

terms and conditions of the documentary credit.

The International Chamber of Commerce Uniform Customs and Practice for Documentary Credits

applies (UCP 600 being the latest version) usually governs the process. Many letters of credit are

irrevocable, i.e., cannot be amended or cancelled without the consent of the beneficiary, issuing

bank, and confirming bank, if any.

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4 million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million

Use service regularly and satisfied Use but NOT satisfied

We never use but could in future We never use and never will


0

20

40

60

80

100

120

140

160

Less than

one year

More than

1 year less

than 3

years

More than

3 years less

than

5years

More than

5 years less

than 10

years

More than

10 years




DRAFT

Figure 63: Payment processing and/or guarantees

Credit insurance

Export credit insurance is an insurance policy and a risk management product offered by private

insurance companies and governmental export credit agencies to exporters wishing to protect their

accounts receivable from loss due to credit risks such as protracted default, insolvency or bankruptcy

from importers. Exporters can also be covered for transfer and political risks.

Credits may be short term (up to two years), medium term (two to five years) or long term (five to

ten years). They are usually supplier's credits, extended to the exporter, but they may be buyer's

credits, extended to the importer. The risk on these credits, as well as on guarantees and insurance,

is often borne by the sponsoring government.

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million




0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years

less than

5years

More than

5 years

less than

10 years

More than

10 years




DRAFT

Figure 64: Credit insurance

Foreign exchange risk management (incl. forward cover)

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4 million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million




0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years

less than

5years

More than

5 years

less than

10 years

More than

10 years




DRAFT

Figure 65: Foreign exchange risk management

E-commerce facilitation

Electronic commerce or e-commerce, is the buying and selling of product or service over electronic

systems such as the Internet and other computer networks. Since the Internet does not respect

international borders, consumers from all over the world can access products from practically any

location they wish. Electronic commerce draws on such technologies as electronic funds transfer,

supply chain management, Internet marketing, online transaction processing, electronic data

interchange (EDI), inventory management systems, and automated data collection systems.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of

the exchange of data to facilitate the financing and payment aspects of business transactions. E-

commerce can be divided into:

• E-tailing or "virtual storefronts" on Web sites with online catalogues, sometimes gathered

into a "virtual mall"

• The gathering and use of demographic data through Web contacts and social media

• Electronic Data Interchange (EDI), the business-to-business exchange of data

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4 million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than R500

million




0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years less

than 5years

More than

5 years less

than 10

years

More than

10 years




DRAFT

• E-mail and fax and their use as media for reaching prospects and established customers (for

example, with newsletters)

• Business-to-business buying and selling

• The security of business transactions

Although most South African exporters have got access to Internet facilities, most are using these to

do research or to promote their products in global markets. There are a few exporters that are

trading using ICT. Proportionately it seems so new firms, with less than a year’s experience trading

globally have embraced the technology.

Figure 66: E-commerce facilitation

Consultancy related to customs duty refunds and drawbacks

In terms of the Customs and Excise Act 1964, there are three provisions under which importers can

be exempt from paying, or be entitled to claim back, customs duty:

1. Drawbacks;

2. Rebates; and

3. Refunds.

The purpose is sustainable economic growth and development that requires the improvement of the

international competitiveness of the industrial and agricultural sectors, and consequently

competitive inputs.

A ‘drawback’ of customs duties may be applied in respect of imported product inputs used in the

manufacture, processing and packaging of products that were then exported. A ‘rebate’ of customs

0

10

20

30

40

50

60

70

80

less than

5

6 - 10 11 -50 51 - 100 101 - 200 More

than 200




0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years less

than

5years

More than

5 years less

than 10

years

More than

10 years




DRAFT

duties provides for the suspension of customs duty on imported product inputs used in the

manufacture of products for export and/or domestic consumption, subject to compliance with the

rebate item’s prescribed condition or conditions. A ‘refund’ is obtained in respect of the

overpayment of customs duties or where products and product inputs were exported in the same

condition as they were imported.

Figure 67: Consultancy related to customs duty refunds and drawbacks

Consultancy related to accessing trade agreements

In addition, in terms of the Customs and Excise Act 1964, there are a number of agreements or

protocols that may favour exporters:

• Agreement on Trade, Development and Co-operation between the European Community

and their Member States and the Republic of South Africa

• Treaty of the South African Development Community and Protocols concluded under the

provisions of Article 22 of the Treaty

• Agreement between the Government of the Republic of South Africa and the Government of

the United States of America regarding Mutual Assistance between their Customs

Administrations

• South African Customs Agreement between the Governments of the Republic of Botswana,

the Kingdom of Lesotho, the Republic of Namibia, the Republic of South Africa and the

Kingdom of Swaziland

• Memorandum of Understanding between the Government of the Republic of South Africa

and the Government of the People’s Republic of China on promoting Bilateral Trade and

Economic Co-operation

0

10

20

30

40

50

60

70

80




DRAFT

• Free Trade Agreement between the EFTA States and the SACU States

Figure 68: Consultancy related to accessing trade agreements

Legal services

Different countries have different cultures and norms and have therefore over time developed their

own unique jurisprudence and legal systems. These differences complicated international trade

considerably. Were they have been attempts to develop international law (consisting of rules and

principles governing relations and dealings of nations with each other) international commerce is

still fraught with dangers.

Exporters face challenges from the time they negotiate and formulate contracts through to the

resolution of disputes and court actions. They also face problems protecting intellectual property

such as patents and trademarks. As exporters develop they also need assistance in setting up foreign

branches and subsidiaries.

Although exporters have access to South African lawyers, they will still need legal assistance in

foreign countries. Some of the larger South African firms have established relationships in many

other countries in which South African’s have traditionally done business and can therefore assist

exporters with legal advice.

0

10

20

30

40

50

60

70

80

less than

5

6 - 10 11 -50 51 - 100 101 - 200 More

than 200




0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years less

than

5years

More than

5 years less

than 10

years

More than

10 years




DRAFT

Figure 69: Assistance with contract formulation Figure 70: Patent or trademark registration

Figure 71: Legal services - Dispute resolution Figure 72: Assistance in establishing an off-

shore presence

A few South African firms use legal services in the formulation of their contracts. In most cases, the

exporters will experience very few if any problems. However as new markets open up and new

challenges arise, it is surprising that so few exporters are consulting experts in drafting their

contracts.

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4 million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million




0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million




0

10

20

30

40

50

60

70

Less than

R4million

Between

R4 million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million




0

10

20

30

40

50

60

Less than

R4million

Between

R4 million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than R500

million




DRAFT

South African firms lag behind their international competitors when it comes to intellectual

property. Local firms do not use patents to protect their inventions. It is expensive and very difficult

to prove that her ideas have been copied or patents infringed upon. South African is also very small

market and therefore local trademarks are not well known globally. This could explain why South

African exporters tend not to use legal services to register patents or trademarks et cetera.

Advertising, public relations, etc.

Most medium- and large-sized enterprises regularly use both advertising agencies and public

relations consultants domestically. However it seems as though large enterprises have a higher

propensity to use these services when doing business internationally.

Figure 73: Advertising, public relations

Identifying appropriate foreign market distribution channels and selling techniques

There are a number of modes from which exporters and potential exporters can choose when

entering foreign markets. Indirect exporting is the easiest and least risky. However with direct

exporting the risks and challenges become greater. Distribution channels in foreign countries often

differ. Some channels are longer while others are shorter. This has a direct bearing on the cost to the

final user of the product since there are markups at each stage along the distribution channel.

Choosing the wrong distribution channel can therefore price the goods out of the market and make

them uncompetitive.

Very few South African exporters seem to use consultants to assist them in this regard. Those that

have used consultants to assist them in identifying appropriate foreign market distribution channels

have also not been satisfied.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Figure 74: Identifying appropriate foreign market distribution channels

Information on investment/joint venture opportunities (local and foreign)

Exporting is only one channel that an enterprise can use to internationalise. In many cases firms

would set up joint ventures in their attempts to expand.

Not many South African firms have used either consultants or information on investment is joint

venture opportunities either locally or in foreign markets. Many of those who have, indicated that

they were not satisfied with information or services that were provided.

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

Figure 75: Information on investment/joint venture opportunities (local and foreign)

Official statistics on consumption, production, trade trends, foreign market import

statistics, etc

Practically all governments across the world have official statistical agencies that provide various

data. Although with modern information and communication technology it is becoming easier to

access this information, there are still problems in acquiring and especially interpreting it:

• Governments provide the information in their own languages which presents challenges to

South African exporters.

• Commercial transactions use varying currencies. These currencies are often volatile and

therefore difficult to compare with each other.

• Information is not always timely.

• Different statistical techniques are used to extrapolate data that is presented as official data.

When these different techniques are used the data cannot be compared without a great

deal of care.

There are many multinational organisations including the United Nations, World Bank, International

Monetary Fund, and the Organisation for Economic Co-Operation and Development that provide

comparative data. Some of the data is freely available while other datasets have to be purchased

(usually on a subscription basis).

The International Trade Centre has invested a great deal of resources in developing products such

as:

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million



DRAFT

• Trade Map;

• Investment Map;

• Market Access Map;

• Trade Competitiveness Map; and

• Standards Map.

Together these services provide very useful information that can assist both new and experienced;

as well as small-, medium-, and large enterprises. Currently the information is provided at no charge

to South African exporters. It is therefore surprising to see how few exporters have actually used any

of the official statistics on consumption, production, trade trends or investment.

In addition to the International data they are companies in South Africa such as Quantec Research

(locally owned) and Global Insight (foreign owned company) that provide both the raw data and

value added services. The data is relatively easy to obtain and to interpret. In many cases the data is

presented using the South African Rand, US dollar, or the local currency applicable.

Figure 76: Official statistics

Translation and travel services

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million




0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%




DRAFT

Figure 77: Translation services Figure 78: Travel arrangements

1.2.15 Government services

Government plays an important role in the exports of any country. Although monetary and fiscal

policies have a bearing on exports, there are more direct interventions that also play a role. Trade

policy for example regulates the relations between countries (either on a bilateral or multilateral

basis) and has an impact on industrial policy.

There are other services, that have been described above, such as agricultural product inspections

and standards that have an impact on certain sectors of the economy. Customs and Excise also has a

direct impact on all sectors the country’s trade.

Government is also involved in the promotion of the country’s trade. Governments assist private

sector businesses with a wide range of services, from simply providing information about current

opportunities in the world market to giving specialised assistance to design and implement

marketing programmes and sales campaigns abroad. Many of these activities as described by the

words "export promotion" or "export development." If the services are appropriate and are

provided efficiently and effectively, they can have a significant impact on, not only achieving broader

socio-economic goals but also increasing the volume of trade.

Foreign Economic Representatives

The dti deploys competent and dedicated officials in targeted countries/missions abroad who work

under the oversight of Heads of Mission. These foreign economic representatives are tasked with

delivering on the strategic objectives related to exports, investment and market access. The role of

the DIRCO in export and investment promotion is increasing. In many instances, the DIRCO has

missions abroad where there is no representation from the dti. This means that a partnership in the

area of foreign economic representation between the dti and DIRCO is important.

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4 million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million




0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million






DRAFT

Figure 79: Foreign Economic Representatives

Figure 80: Foreign Missions (Embassies, High Commissions, Consulates)

Smaller less experienced exporters tended to use the services provided by South Africa’s foreign

missions abroad proportionately more. They tended to be more satisfied than the medium and

larger exporters.

It appears as though exporters tend to be more satisfied with the services provided by foreign

missions (DIRCO) rather than the foreign economic representatives. This could be because the

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4 million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million

Extremely satisfied Satisfied Unacceptable Never used Unaware of service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years

less than

5years

More than

5 years

less than

10 years

More than

10 years


0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million

Extremely satisfied Satisfied Unacceptable

Never used Unaware of service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3 years

More than

3 years less

than 5years

More than

5 years less

than 10

years

More than

10 years


DRAFT

expectations that exporters have of economic representatives is higher than that of normal

diplomats.

Even though many of the respondents were aware of the services, they have never used the

services. It would appear as though foreign missions are perceived to be there in case of trouble

rather than providing proactive services for exporters.

Of more concern however is the lack of awareness of the services provided by South Africa’s foreign

missions and especially the foreign economic representatives.

Customs and Excise

Figure 81: Customs and Excise

Agricultural inspection

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years

less than

5years

More than

5 years

less than

10 years

More than

10 years


DRAFT

Figure 82: Agricultural Inspection

South African Bureau of Standards

Even though very few of the respondents indicated that they were extremely satisfied with the

services provided by the South African Bureau of Standards, the satisfaction rate seems to be

acceptable.

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ag

ricu

ltu

re

Min

ing

Ma

nu

fact

ure

of

foo

d p

rod

uct

s, b

eve

rag

es

an

d…

Ma

nu

fact

ure

of

text

ile

s, c

loth

ing

, le

ath

er…

Ma

nu

fact

ure

of

wo

od

an

d o

f p

rod

uct

s o

f w

oo

d

Ma

nu

fact

ure

of

pa

pe

r a

nd

pa

pe

r p

rod

uct

s

Pu

bli

shin

g,

pri

nti

ng

an

d r

ep

rod

uct

ion

of…

Ma

nu

fact

ure

of

che

mic

als

an

d n

on

-me

tall

ic…

Ma

nu

fact

ure

of

ba

sic

me

tals

, fa

bri

cate

d m

eta

l…

Ma

nu

fact

ure

of

tra

nsp

ort

eq

uip

me

nt

Ma

nu

fact

ure

of

furn

itu

re

Oth

er

ma

nu

fact

ure

d p

rod

uct

s

Co

nst

ruct

ion

Wh

ole

sale

an

d r

eta

il

Tra

nsp

ort

, st

ora

ge

an

d c

om

mu

nic

ati

on

Fin

an

cia

l se

rvic

es

Bu

sin

ess

se

rvic

es

Oth

er

serv

ice

s


DRAFT

Figure 83: South African Bureau of Standards

Primary market (i.e. in-market) research

0

10

20

30

40

50

60

70

Extremely satisfied Satisfied

Unacceptable Never used

Unaware of service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years

less than

5years

More than

5 years

less than

10 years

More than

10 years



Unaware of service

DRAFT

Figure 84: Primary market (i.e. in-market) research

Secondary (i.e. desk) research

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million



Unaware of service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years

less than

5years

More than

5 years

less than

10 years

More than

10 years



Unaware of service

DRAFT

Figure 85: Secondary or desk research

Inward-buying missions

Assistance is provided to organisers of Inward Buying Trade missions (IBMs) to enable prospective

buyers to make contact with South African exporters to conclude export orders. IBMs may be either

organised by individual entrepreneurs or entities, or by qualifying organizations. The mission could

be of a specialised or general nature. The invited businesses must have a large buying capacity and

be represented by an appropriate decision-making officer. Missions should be comprised of focused

groups.

Assistance is provided to specific industry sectors with the objective of:

• Developing new export markets

• Broadening the export base

• Stimulating the participation of SME's in the export sector, promoting black economic

empowerment (BEE) and woman empowerment (WE), with the use of backward linkages as

an instrument to achieve the above

• Increase job creation as a result of the above objectives

0

10

20

30

40

50

60

70


and R10 million

Between R10 million

and R40 million

Between R40 million

and R100 million


and R500 million

More than R500

million


DRAFT

Figure 86: Inward-buying missions

Outward selling missions

Assistance is provided to South African exporters who wish to make contact with foreign buyers with

a view to conclude new export orders. The organising body must be a qualifying applicant such as

Chambers of Commerce, Industry Associations, Provincial Investment Promotion Agencies (PIPA's),

Export Councils, Official Provincial and Local Government Trade Promotion offices (TPO's) or the dti.

The mission must be aligned with Trade and Investment South Africa's sector strategy. Specialised

missions (e.g. capital projects) may be comprised of a project team. Missions should be confined to

small manageable groups.

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million



Unaware of service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years

less than

5years

More than

5 years

less than

10 years

More than

10 years



Unaware of service

DRAFT

Figure 87: Outward selling missions

Exhibition participation

National Pavilions

Trade and Investment South Africa participates in selected trade fairs and exhibitions abroad by

means of a National Pavilion or Mini National Pavilion. National Pavilions are official country

participation in major trade fairs or exhibitions abroad, which show cases the country, its industries,

strengths, comparative advantages and individual companies. Assistance is provided to qualifying

South African exporters to introduce products into foreign markets by participating in suitable

foreign exhibitions in a cost effective manner. Trade and Investment South Africa does not have to

be the organiser for the pavilion for the event to qualify for EMIA funding

Individual Exhibitions

Assistance is granted to individual exporters to exhibit products at recognised exhibitions abroad

where Trade and Investment South Africa do not provide for a National Pavilion. A maximum of four

(4) exhibitions per calendar year, subject to the discretion of Trade and Investment South Africa, are

allowed. A maximum of ten (10) exporters will be assisted for a particular exhibition. Assistance is

provided for one representative per registered exporter per exhibition. Assistance is granted on the

basis of actual expenditure.

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million



Unaware of service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More

than 1

year less

than 3

years

More

than 3

years less

than

5years

More

than 5

years less

than 10

years

More

than 10

years



Unaware of service

DRAFT

Figure 88: Exhibition participation

1.2.16 Preferred means of obtaining export-related assistance

0

10

20

30

40

50

60

70

Less than

R4million

Between

R4

million

and R10

million

Between

R10

million

and R40

million

Between

R40

million

and R100

million

Between

R100

million

and R500

million

More

than

R500

million



Unaware of service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than

one year

More than

1 year less

than 3

years

More than

3 years less

than 5years

More than

5 years less

than 10

years

More than

10 years



DRAFT

Figure 89: Preferred means of obtaining export-related assistance

0

50

100

150

200

250

Most preferred 2nd preferred 3rd preferred 4th preferred 5th preferred

DRAFT

1.2.17 Current export regions

Figure 90: Current regional priorities

Sub-Saharan Africa was the most important region to South African exporters, followed by Western

Europe. These regions were followed by Asia, North America, Australia, and New Zealand. Eastern

Europe, the Middle East and South America were the lowest ranked regions according to the

respondents.

The top 10 (new) countries that exporters plan to enter are:

1. Kenya

2. Angola

3. Nigeria

4. Tanzania

5. Mozambique

6. Uganda

7. Democratic Republic of the Congo

8. Zambia

9. Zimbabwe

10. Brazil

With the exception of Brazil, exporters have prioritised African markets as being important.

The least popular destinations for South African exporters are:

1. Cuba

2. Venezuela

3. Kuwait

4. Argentina

5. Taiwan Province of China

6. Republic of Korea

7. Mexico

8. Chile

9. Japan

10. Egypt

0

50

100

150

200

250

300

350

Sub-Saharan

Africa

North Africa Western

Europe

Eastern

Europe

Middle East Asia Australia &

New Zealand

North

America

South

America

5 = Extreme Importance 4 = Much Importance 3 = Some Importance 2 = Little Importance 1 = No Importance

DRAFT

Table 2 Exporters priority markets Current export

market

Have exported

there in the

past year

Plan to in the

next year

Not in our

current plans

Angola 63 49 69 86

Argentina 18 8 27 169

Belgium 44 24 27 141

Brazil 25 13 48 144

Chile 24 12 31 158

China 60 14 23 139

Cuba 2 2 14 199

Democratic Republic of the Congo 50 30 58 111

Egypt 15 17 38 153

Germany 85 29 30 108

Hong Kong 47 12 27 142

India 36 15 35 146

Italy 40 23 24 145

Japan 37 6 26 158

Kenya 60 36 77 83

Kuwait 17 10 25 170

Malaysia 47 15 26 137

Mexico 20 12 25 164

Mozambique 89 42 64 71

Netherlands 62 37 29 121

Nigeria 47 31 69 96

Republic of Korea 22 3 28 167

Russia 32 11 45 144

Saudi Arabia 42 19 41 132

Spain 42 13 23 149

Switzerland 51 18 20 146

Taiwan Province of China 27 7 19 169

Tanzania 53 32 67 96

UAE 52 25 48 117

Uganda 37 22 59 113

United Kingdom 102 39 32 92

United States 90 22 39 106

Venezuela 13 4 15 181

Zambia 100 39 57 74

Zimbabwe 106 37 53 73

DRAFT

Target market comments

26 African countries in past decade

All of Africa and South America. Will not turn

down any market unless environmental

conditions are unknown to us (eg Siberia)

ALL SSA countries

Any west African country

AUSTRALAI

Australia

Australia

Australia

Australia

Australia and mauritius

Australia and New Zealand

Australia and NZ , France

Australia and Pakistan

Australia New Zealand

Australia, Leshtho, Sierra Leone, Seychelles,

Australia, New Zealand,

Australia, Singapore, Central America,

Namibia, Botswana, Swaziland, Lesotho,

Ghana and Malawi are all current export

markets or we have exported there in the last

year.

Australlia, New Zealand

Austria Next Year.

austria, canada, Australia, sweden, norway,

finland, denmark, france

Bahrain, Qatar, Oman, Singapore, Auatralia,

New Zealand, Sweden, Canada, Ecuador, Peru,

Lebanon, Namibia, Philippines

Botswana

Botswana Current Morocco Current Turkey

Current

Botswana Namibia

Botswana, and Lesoto

Botswana, Mauritius, Seychelles, Singapore

Botswana, Swaziland, Namibia

Botswana,Malawi and West Africa

BURMA

Canada

CANADA PHILIPPINES, INDONESIA

Canada, Denmark, Sweden, Finland, Ireland,

Portugal, Singapore.

CANADA,UKRAINE,FRANCE,INDONESIA

CCU, Malawi, Uganda, Ghana

Countries in current expansion drive: Ghana;

Uganda; Ivory Coast, Sudan; Malawi, Namibia,

Botswana,

Current Export - Namibia

Current Export Market Namibia Botswana

Lesotho Swaziland

current export markets : Madagascar ,

Mauritius , Malawi , Rwanda, St.Helena

Current markets: Denmark, Ireland, Canada,

Turkey, Greece, Pakistan, Czech Republic,

Slovenia, Slovakia & Portugal

Currently also export to: Sweden, Denmark,

Finland, Norway, Caribbean, Indonesia,

Singapore, Namibia, Mauritius, Canada,

Philippines, Poland, Malta.

Currently exporting to the Indian Ocean

islands, Seychelles. Planning to export to

Mauritius and Reunion.

Denmark, Finnland, Slovakia

DRC, MALI, GHANA

ECOWAS IS IMPORTANT

exported to Mongolia in the last year

exported to Botswana Planning to export to

Peru

France, Australia

France, Canada, Ghana,

France, Mauritius, Namibia, Seychelles

France, New Zealand, Australia - current

markets

Gambia

Georgia, Turkey

Ghana

Ghana, Cameroon, Malawi, Lesotho, Republic

of congo, Sierra leone

Ghana, Rwanda, Burundi, Botswana, Namibia ,

Madagascar, Cameroon, Cote D'Ivoire ,

Malawi, Exported to all

Greece in the past. AUganda, Seychells,

Mauritious, Namibia

Indian Ocean islands are important for us.

Indian Ocean Islands Sudan Ivory Coast

Senegal Malawi Namibia Botswana

Lesotho

Libya

Liechtenstein, Norway, Iceland

Magadascar, Maldives, Sri Lanka, Mauritius,

Seychelles, Reunion (Dept of France). There

are current export markets.

Malawi

Malawi

Malawi, Ghana, Cameroon, Ivory Coast,

Republic Congo, Sudan, Morroco

DRAFT

Malawi, Guatemala, Equatorial Guinea,

Ghana, Mauritius, Australia, New Zealand,

Honduras, Congo,

Malawi, Israel, Mauritius, Seychelles

Malawi, Mauritius, Botswana, Swaziland,

Lesotho, Namibia, Seychelles, Congo,

Comores, Madagascar, Reunion

Malawi, Mozambique, Seirra Leonne, Burkino

Faso, Botswana, Namibia,

mauritius swaziland

Mauritius, Seychelles, Malawi, Namibia

MEA region, specifically Sub-Sahara Africa

Namibia

Namibia

Namibia

NAMIBIA

Namibia - current

Namibia - currently exporting

Namibia - Currently Lesotho Swaziland

Seychelles

Namibia , Australia , Ukraine ,

Namibia, Botswana

namibia, botswana

Namibia, Botswana

Namibia, Lasotho

namibia,botswana,swaziland,lesotho

NEW ZEALAND

New Zealand (Current)

Nicaragua

none

Numerous other African States are important.

Ghana, Kenya, Malawi, Mauritius,

Madagascar,Ethiopia, Rwanda, Burundi

OMAN

Other current export markets; Namibia,

Uganda, Swaziland. Potential Markets looking

at: Mongolia, Indonesia.

Our focus is developing emerging markets in

Africa as well as the next fastest 11 growing

economies.

Peru and Columbia; intend to export in the

coming year.

Philipines Indonesia Vietnam Cambodia

Bangladesh Uzbekistan Iran Kazachstan

Poland Portugal France Scandinavia

Phillipines

South Sudan

Swaziland

Sweden

Sweden

Sweden, Singapore

Thailand

This is a difficult one to answer in terms of

future projections as it all depends on future

sales and enquiries. We do intend exhibiting

and promoting our products in the USA,

Europe, Korea, Brazil and Angola next year

through DTI EMIA, TISA programs

Ukraine

Ukraine (NB) / Bangladesh & Sri Lanka (very

NB) / Oman / Benin

Used to export to West-Indies, Mauritius

We are effectively exporting to 28 countries in

Sub-Sahara: Gabon Tanzanie Gambia Burundi

Sierra Leone Ethiopia Mauritius Congo Brazza

Benin Angola Cameroon DR Congo Burkina

Faso Mayotte La Réunion Liberia Nigeria

Seychelles Malawi Zimbabwe Sénégal Djibouti

Côte d'Ivoire Mozambique Rwanda Zambia

Togo Guinea Bissau

We curenlty export to Austria, Sandinavia,

Canada, Singapore, France, Poland, Estland,

Mauritius,

We currently export to Namibia and Botswana

as well. We would like to export to

Madagascar, Seychelles, etc.

DRAFT

1.3 Survey of past-exporters

The purpose of the survey was to solicit the opinions of non-exporters and to find out why they were

not exporting, as well as what drivers and barriers they were experiencing, etc.


felt that the opinions of past-exporters would be different to those of exporters. Past-exporters had

overcome the usual problems faced by exporters but were unable to overcome other problems. In

terms of the “REN-approach”, it was also necessary to try and find out why exporters exited.

Therefore a separate survey was also prepared for non-exporters.

In addition to this database, requests were also sent to organised business and Export Councils, who

in turn were requested to forward the email to the members and especially potential exporters. (It is

possible that opinions regarding the effectiveness Of Export Councils could be skewed.) The DTI’s

own database was also used. This included exporters who had used the export marketing assistance

scheme or had been part of a capacity building programme. (It is possible that the opinions of

exporters that had benefited from various government incentives would also skew the survey

results.)

1.3.1 Responses to the past exporter survey

Only 57 exporters participated in the survey; only 28 completed all the questions.

Table 3: Origin of respondents - past exporters

Province Responses

Eastern Cape 6

Free State 1

Gauteng 20

Kwa Zulu Natal 4

Mpumalanga 1

Northern Cape 4

Western Cape 14

In common with the surveys of exporters and non-exporters most of the respondents came from her

take on the Western Cape.

The North-West Province was the only province not represent.

1.3.2 How long has the firm been operating

Most of the past exporters surveyed who have been in business for more than 10 years. They

represented a cross section of size of businesses, although only a few had turnovers of more than

R500 million. On the other hand smaller firms (with turnover of less than R4 million) were in the

majority.

DRAFT

Figure 91: How long has the firm been operating

1.3.3 Sectors

Again there was a good representation from the various industrial sectors. However the following

sectors were prominent:

• Textile and clothing

• Leather footwear

• Fabricated metals

• Wholesale and retail services

• Another manufacturing

• Other services

0

5

10

15

20

25

30

35

40

45

Less than one year More than 1 year and

less than 3 years

More than 3 years and

less than 5 years

More than 5 years and

less than 10 year

More than 10 years

More than R500 million Between R100 million and R500 million Between R10 million and R40 million

Between R4 million and R10 million Less than R4million

DRAFT

Figure 92: Sectors

1.3.4 Features

In an attempt to analyse how past exporters saw themselves in relation to imported and local

products, questions were asked to regarding the quality, features and price of their products

Features compared with local and imported competitive products

The respondents were asked the following two questions:

• how the features of your products compare with local competitive products?

• how the features of your product compare with imported products?

Surprisingly, the majority of past exporters felt that they had products that were a lot better or at

least marginally better than the domestic competition. A few felt that they were about the same.

However, no firms that were surveyed considered their products inferior to domestic products.

Although past exporters generally felt they had an edge on imported competitive products, the

minority felt that the features that their products have were inferior to the foreign competitors.

0

1

2

3

4

5

6

7

8

9

More than R500 million Between R100 million and R500 million Between R10 million and R40 million

Between R4 million and R10 million Less than R4million

DRAFT

Figure 93: Compared with LOCAL competitive

products, your product's FEATURES are

Figure 94: Compared with IMPORTED

competitive products, your product's FEATURES

are

1.3.5 Quality

The respondents were asked the following two questions:

• how the features of your products compare with local competitive products?

• how the features of your product compare with imported products?

Again, the respondents felt very bullish when they compared the quality of their products is local

competition. Again the vast majority felt their products were either a lot better or at least marginally

better than the quality of the domestic producers.

When they compared the quality of their products to locally important competitive products they

were still bullish but not as many felt the same way as it did when comparing their products to the

domestic competition. Interestingly none of the respondents felt that their products were worse

(not even marginally worse) than imported products.

0

2

4

6

8

10

12

14

A lot worse Marginally

worse

About the

same

Marginally

better

A lot better

Less than R4million Between R4 million and R10 million

Between R10 million and R40 million Between R100 million and R500 million

More than R500 million

0

2

4

6

8

10

12

14


worse

About the

same

Marginally

better

A lot better

More than R500 million Between R100 million and R500 million


Less than R4million

DRAFT


products, your product’s QUALITY is


competitive products, your product’s QUALITY

is

1.3.6 Price

Respondents were asked that when “Compared with LOCAL competitive products, your product's

PRICE is

• Compared with LOCAL competitive products, your product's PRICE is

• Compared with IMPORTED competitive products, your product's PRICE is

On this characteristic that local past exporters were not as confident. When looking at their prices

are a few felt that there prices will marginally higher than the competition, and one respondent even

felt the prices were a lot worse than the local competition.

When comparing themselves to foreign competition, about a third of the respondents felt that they

were more competitive. However the majority of the respondents were not as positive. A few felt

that they were in the same ball park but many felt they were marginally worse than either a lot

worse than that their foreign competition.

0

2

4

6

8

10

12

14

16

18

20


worse

About the

same

Marginally

better

A lot better



Less than R4million

0

2

4

6

8

10

12

14

16


worse

About the

same

Marginally

better

A lot better




DRAFT


products, your product's PRICE is


competitive products, your product's PRICE is

Conclusions

Most of the respondents held high opinions of their products quality and it features. They were not

as convicted when it came to their prices. One of the respondents claimed that they “have more

than 90% market share in the local market and very little competition”.

Perhaps this gives a clue why many South African firms cannot compete in the global markets.

Without competition the dominant firms become complacent and do not (or cannot) respond to the

needs of the market.

It is also important to investigate why the prices of domestic goods are not competitive compared

with imported products. South Africa is geographically far from major producers and therefore

domestic firms which seemed to enjoy natural barriers other than those which are imposed to

protect domestic industry.

1.3.7 Corporate assets

Past exporters have experience dealing and global markets. They would tend to have certain

tangible and intangible assets. The following questions were aimed at identifying possible sources of

competitive advantage that are dormant.

0

2

4

6

8

10

12


worse

About the

same

Marginally

better

A lot better


Between R100 million and R500 million



Less than R4million

0

1

2

3

4

5

6

7

8

9


worse

About the

same

Marginally

better

A lot better





Less than R4million

DRAFT

Figure 99: Spare production capacity Figure 100: Superior technical expertise

Figure 101: Some export knowledge Figure 102: The financial resources to cover

export market research, product testing and

adaptation, (re)tooling for export, etc.

Figure 103: The financial resources to wait for

up to six months for returns on investment in

an export drive

0

5

10

15

20

Yes Partly No Do not know




0

10

20


More than R500 million Between R100 million and R500 millionBetween R10 million and R40 million Between R4 million and R10 millionLess than R4million

0

5

10

15

20





0

10

20




Less than R4million

0

10

20




Less than R4million

DRAFT

The past exporters have the advantage of knowing what is required of them in foreign markets. They

had sufficient knowledge of the export process and what was required from them as exporters. They

also claim to have the necessary technology and technical expertise to compete in the global

markets.

The biggest challenge that past exporters seem to face is a lack of finance. Although most of the

respondents had spare capacity, superior technical expertise and some export knowledge; they

lacked financial resources to cover pre-shipment costs. Pre-shipment costs includes the costs of

market research, product testing and adaption retooling for export et cetera. They also do not have

the financial resources to cover post-shipment finance. In other words they did not have the

resources to wait for importers to pay them. This can often exceed six months.

1.3.8 Obstacles

Past exporters identified financial aspects as being the most difficult obstacles to overcome. The

most significant obstacles included limited financial resources, restricted access to finance, and the

high cost of undertaking marketing activities in foreign markets. Although there are various forms of

assistance offered by government to assist with these issues, firms are not always aware of the

various schemes, and if they are the process of accessing them is perceived to be too difficult.

The high cost of imported inputs required for the export process also featured as a significant

obstacle. Although import duties have come down over the past two decades and there are various

rebates or drawback schemes available through Customs and Excise, the anti-export bias generated

by tariff and other nontariff barriers seems to be a problem.

South African is also far from international markets making transport costs are an important

obstacle. This is aggravated by the fact that most of South Africa’s exports (especially high value

added exports) are grown or produced in the hinterland. These exporters therefore also face

transport costs to the ports.

The obstacles that were identified are listed below in importance:

• Limited financial resources/restricted access to finance

• High cost of undertaking marketing activities abroad

• High cost of imported inputs required for export purposes

• High transport/transport-related costs, e.g. port dues, surcharges

• Insufficient knowledge and/or expertise in respect of foreign market identification,

international regulations and procedures

• Sub-optimal foreign marketing impact due to lack of cohesion in the industry

• Constrained production capacity

• Evident barriers to foreign market entry, e.g. high levels of competition, onerous technical

requirements, high levels of duty

• Infrastructural/institutional bottlenecks in South Africa, e.g. port congestion, customs delays

• Lack of time to devote to a more active export drive

• Shortage of available personnel skilled in imports/exports

• High cost of labour relative to output

• Insufficient management commitment

DRAFT

• Expense/difficulty associated with meeting international product or operational standards

(e.g. ISO 9000)

• Lack of knowledge as to where to obtain practical advice and/or assistance

• Difficulty in locating individuals/entities that are qualified to offer practical advice and/or

assistance

• Poor quality assistance from existing sources

• High expense associated with obtaining practical advice and/or assistance

Respondent’ response regarding obstacle

The following comments were made by past exporters regarding the obstacles that they faced or at

least perceived:

• No national support and cohesion for medical equipment manufacturing.

• High cost of inputs such as electricity

• We offer a manufacturing service, and do not have a product to sell

• High cost of Brand building to establish product in foreign markets

• Chinese counterfeiters who operate from South Africa copy local made innovations

• Poor economic demand in Europe

Reasons given for stopping to export

One of the main reasons past-exporters have given as a reason for stopping to export is the price of

their product. In some cases a price increase was as a result of various supply-side factors. One

exporter actually “moved production to Germany, saving us 30% in manufacturing costs, 70% in

transport costs, improved our quality and cutting transport time to major markets.”

Another respondent put it more bluntly:

"1. To ship from China to South Africa costs R255.00 per cubic meter. To ship from South

Africa to China costs R9890.00 (more than 38 times!)

2. Receiving foreign money into South Africa is problematic and difficult, let alone all the

paperwork. It is much easier to import (and pay) than to export and receive payment locally.

3. I found it MUCH easier to have the products now manufactured in China, ship it from

there to customers abroad and receive payment in offshore accounts! No struggling with

stupid South African customs, excise, reserve bank explanations. This also serves to keep our

(South African) sales turnover low to avoid immoral/unproductive BEE issues."

The supply-side problems include:

• High cost of labour

• Imported raw materials

• Finance (both access to finance and the cost of finance)

Competitors are able to provide products of a similar quality and similar features at a lower price

than South African exporters are able to. Asian countries and especially China seem to be displacing

South African exporters from various markets including markets in Africa. One automotive exporter

DRAFT

explained “China rushed market with low costs.” Another simply stated “Competition from the

East.”

South African exporters did complain that there was an increasing cost of compliance with

regulations. Exporters felt that the procedures need to be streamlined and improved to facilitate

exports. An exporter asked if it was possible for “changes to laws and procedures from government

side in regards to exports?”

South African exporters lost markets where they had invested in intellectual property. They could

not counter counterfeited products being manufactured in foreign countries and then imported into

South Africa. They also complained that there was “no assistance from any Govt dept to protect

South African ideas and innovations). My customer saw that the original SA product was copied in

China at a cheaper price, and decided that the goods where no longer unique or ‘had any Soul’ so

stopped buying.”

Another reason was the many of the South African Rand relative to other currencies. “The

strengthening of the Rand against foreign currencies caused us to be uncompetitive on price.” “no

export incentive and the strength of the Rand vs the Dollar”

The global recession of 2009 and subsequent slow recovery has resulted in many exporters losing

markets they previously had:

• Our distributors abroad had slower sales.

• We have not exported as we have not had an order to complete a boat for export.

• The global economic crisis has forced our major export clients to close down."

South African exporters are notorious for exiting foreign markets “when the going gets tough” in the

market in South Africa looks more lucrative. With the global recession one exporter confirmed this

when they stated: “Limited demand in Europe. Higher profit margins in South Africa!” This is

commonly known as the “vent-for-surplus” hypothesis.

One exporter saw the recession as a normal part of the business cycle and stated that there was a

“natural decrease in production of product. We will start exporting again once production volumes

increase over the next few years.” Another stated: “ We did not stop exporting, we are quoting and

attending conferences and exhibitions, but have not been successful in obtaining orders during the

last 12 months .”

The recession resulted in many countries imposing nontariff barriers to protect their domestic

producers. Although many exporters were able to adapt to the new regulations, some of the

conditions that were imposed were too onerous. This resulted in exporters exiting.

• My market was mostly in Taiwan for meat products, and they banned the import of all meat

products from SA some years back. I now am concentrating on chemicals and I am starting

to think of the export market again. I think Africa would be the market for these products.

Foreign importers often had perceptions of South Africa as a backward third world country. Even

once importers had started negotiating the South African exporters the perceptions remained and

one respondent claimed: “It was difficult to find the right buyers overseas, and when I found one,

DRAFT

they had doubts, that we were able to deliver our high quality sample.” Country branding is

therefore critical and needs to project the image of South Africa as a reliable supplier of high-quality

products.

Exporters felt that more needs to be done buying locally manufactured products. “Lack of

production input from local broadcasters especially the SABC so now focusing on survival rather than

investing in productions.”

Pre-and post-export shipment finance is a constant problem for exporters in South Africa. With

recession banks tended to be cautious and not to extend facilities. One exporter complained that

they could not “carry the financial burden until you are being paid, and in my case Absa Bank was

not interested to take the cheque the Federal Government of the USA sent to me by post. I had to

open another Bank account with FNB to be able to get my money. When the company is small no

one is interested to help you because they cannot make money from you.”

1.3.9 Contribution of the DTI’s incentives

The dti provides financial support to qualifying companies in various sectors of the economy.

Financial support is offered for various economic activities, including manufacturing, business

competitiveness, export development and market access, as well as foreign direct investment.

A summary of these is given below:

Aquaculture Development and Enhancement Programme ( ADEP)

The Aquaculture Development and Enhancement Programme (ADEP) is an incentive programme

available to South African registered entities engaged in primary, secondary and ancillary

aquaculture activities in both marine and freshwater classified under SIC 132 (fish hatcheries and

fish farms) and SIC 301 and 3012 (production, processing and preserving of aquaculture fish). The

grant is provided directly to approved applications for new, upgrading or expansion projects.

Business Process Services (BPS)

The South African government implemented a Business Process Outsourcing & Off-shoring (BPO&0)

incentive programme as from July 2007. Between July 2007 and March 2010, the incentive resulted

in the creation of at least 6,000 new jobs and attracted R303 million in direct investment.

As part of a process of improving South Africa’s position as an investment destination, a systematic

review of the BPO & O incentive programme was undertaken with the private sector resulting in a

revised BPS incentive.

Capital Projects Feasibility Programme (CPFP)

The Capital Projects Feasibility Programme (CPFP) is a cost-sharing grant that contributes to the cost

of feasibility studies likely to lead to projects that will increase local exports and stimulate the

market for South African capital goods and services.

Clothing and Textile Competitiveness Improvement Programme (CTCIP)

The Clothing and Textile Competitiveness Improvement Programme (CTCIP) aims to build capacity

among manufacturers and in other areas of the apparel value chain in South Africa, to enable them

to effectively supply their customers and compete on a global scale. Such competitiveness

encompasses issues of cost, quality, flexibility, reliability, adaptability and the capability to innovate.

DRAFT

Critical Infrastructure Programme (CIP)

The Critical Infrastructure Programme (CIP) is a cost sharing grant for projects designed to improve

critical infrastructure in South Africa. The grant covers qualifying development costs from a

minimum of 10% to a maximum of 30% towards the total development costs of qualifying

infrastructure. It is made available to approved eligible enterprise upon the completion of the

infrastructure project concerned.

People-carrier Automotive Investment Scheme (P-AIS)

The People-carrierAutomotive Incentive Scheme (P-AIS)is a sub-component of the Automotive

Incentive Scheme (AIS) and provides a cash grant of between 20% and 35% of the value of qualifying

investment in productive assets approved by the dti.

Production Incentive (PI)

The Production Incentive (PI) forms part of the overall Clothing and Textile Competitiveness

Programme (CTCP) and flows from the implementation, by the Department of Trade and Industry

(the dti), of customised sector programmes (CSPs) for the clothing, textiles, footwear, leather and

leather goods industries. The PI Guidelines seek to enable companies to present their business cases

to the CTCP Desk of the Industrial Development Corporation (IDC). They also provide a framework

for the CTCP Desk to evaluate such cases.

Sector Specific Assistance Scheme (SSAS)

The Sector Specific Assistance Scheme (SSAS) is a reimbursable 80:20 cost-sharing grant offering

financial support to export councils, joint action groups and industry associations.

Seda Technology Programme (STP)

seda Technology Programme (Stp) is a division of seda (Small Enterprise Development Agency)

focusing on technology business incubation, quality and standards and technology transfer services

& support to small enterprises.

Support Programme for Industrial Innovation (SPII)

The Support Programme for Industrial Innovation (SPII) is designed to promote technology

development in South Africa’s industry, through the provision of financial assistance for the

development of innovative products and/or processes.

Technology and Human Resources for Industry Programme (THRIP)

The Technology and Human Resources for Industry Programme (THRIP) is a partnership programme

funded by the Department of Trade and Industry (the dti) and managed by the National Research

Foundation (NRF). On a cost-sharing basis with industry, THRIP supports science, engineering and

technology research collaborations focused on addressing the technology needs of participating

firms and encouraging the development and mobility of research personnel and students among

participating organisations.

The Manufacturing Competitiveness Enhancement Programme (MCEP)

The Manufacturing Competitiveness Enhancement Programme (MCEP), one of the key action

programmes of the Industrial Policy Action Plan (IPAP) 2012/13 – 2014/15, will provide enhanced

manufacturing support to encourage manufacturers to upgrade their production facilities in a

manner that sustains employment and maximises value-addition in the short to medium term.

DRAFT

Tourism Support Programme (TSP)

The Tourism Support Programme, a sub programme of the Enterprise Investment Programme (EIP)

was introduced in 2008, replaced the Small and Medium Enterprise Development Programme

(SMEDP) tourism programme. The incentive offered a grant of between 15% and 30% of qualifying

investment costs for establishing new and expanding existing tourism operations in South Africa. The

incentive provided for qualifying investment costs of furniture, equipment, vehicles, land and

buildings and improvements of up to R200m. The maximum incentive is R30m and is payable over

three years.

Since inception until 31 March 2012, a total of 545 applications were approved with an investment

value of R6.8 billion and an incentive value of R1.1 billion. It is projected that 9 054 jobs will

ultimately be created as a result of the supported projects.

The Minister of Trade and Industry, Dr Rob Davies, has announced the termination of the

administration of the Tourism Support Programme (TSP) by the dti as from 01 October 2012.

1.3.10 Survey response

The question was asked: “How much of a contribution has the dti's incentive schemes had on your

company?”

The results are summarised below:

Figure 104: Automotive Investment Scheme (AIS) Figure 105: Black Business Supplier Development

Programme (BBSDP)

0

2

4

6

8

10

12

14

16

18

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this incentive

scheme

0

2

4

6

8

10

12

14

16

18

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

DRAFT

Figure 106: Business Process Services (BPS) Figure 107: Capital Projects Feasibility Programme

(CPFP)

Figure 108: Critical Infrastructure Programme (CIP) Figure 109: Co-operative Incentive Scheme (CIS)

Figure 110: Clothing and Textile Competitiveness

Improvement Programme (CTCIP)

Figure 111: Export Marketing and Investment

Assistance (EMIA)

0

5

10

15

20

25

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

2

4

6

8

10

12

14

16

18

20

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this incentive

scheme

0

2

4

6

8

10

12

14

16

18

20

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

2

4

6

8

10

12

14

16

18

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

5

10

15

20

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

1

2

3

4

5

6

7

8

9

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this incentive

scheme

DRAFT

Figure 112: Film and Television Production

Incentives

Figure 113: Incubation Support Programme

(ISP)

Figure 114: Isivande Women’s Fund Figure 115: The Manufacturing Competitiveness

Enhancement Programme (MCEP)

Figure 116: Manufacturing Investment

Programme (MIP)

Figure 117: Production Incentive (PI)

0

5

10

15

20

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this incentive

scheme

0

5

10

15

20

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

2

4

6

8

10

12

14

16

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

2

4

6

8

10

12

14

16

18

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

2

4

6

8

10

12

14

16

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

5

10

15

20

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

DRAFT

Figure 118: Sector-Specific Assistance Scheme

(SSAS)

Figure 119: Section 12I Tax Allowance Incentive

(12I TAI)

Figure 120: Small Medium Enterprise

Development Programme (SMEDP)

Figure 121: Support Programme for Industrial

Innovation (SPII)

Figure 122: Seda Technology Programme (STP) Figure 123: Technology and Human Resources

for Industry Programme (THRIP)

0

5

10

15

20

25

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

5

10

15

20

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

2

4

6

8

10

12

14

16

18

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

5

10

15

20

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

2

4

6

8

10

12

14

16

18

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

0

2

4

6

8

10

12

14

16

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

DRAFT

Figure 124: Tourism Support Programme (TSP)

A large number of the respondents were unaware of most of the schemes available. Where they

knew about the scheme it was either too difficult to access will not applicable to their enterprise.

Marketing is required. One respondent stated that: “We have benefited from THRIP and EMIA and

will soon be putting in an important SPII application. As a result of completing this survey, I have

learned about some of the other programmes that the DTI offers and I will be exploring these

further.”

With the exception of EMIA, the respondents found the schemes made little or no contribution

when they were used.

1.3.11 Incentives or services that are required

Many of the past exporters, even though they understood the barriers that they were facing to

export, did not see how government could assist. One exporter put it: “not sure which ones we

could make use of. There are many we don't know about.” And another: “ Support for capital

equipment, steel discounts, internet marketing support. Been there done that !”

Most of the requests for incentives for services regarded exhibitions:

• Recognition and support, particularly pavilion type support, for medical equipment

manufacturers. This is crucial for the industry, eg country-based exhibition at Medica

(www.medica.de).

• Assistance with trade shows attendance

• We would like to go to exhibitions overseas again.

• Any expo/show that gives marketing opportunities.

• Assistance to access markets and buyers overseas. Fruit Logistica is a great opportunity to

meet and see buyers from major retail corporations and buying institutions - it is however

expensive to attend these expo's.

0

2

4

6

8

10

12

14

16

18

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

Too difficult

to access

Unaware of

this

incentive

scheme

DRAFT

Other exporters focused directly on EMIA and required “knowledge of EMIA” or more general

“marketing or financial assistance”.

Africa is becoming an important destination for South African exports and exporters need general

assistance and not necessarily financial incentive schemes.

• Help in accessing growing markets in Africa such as Angola and Mozambique

• Finding markets in Africa, overcoming the transport problems and some financial assistance

to achieve this.

Some comments were very general (and simply included “ISP, BPS, EMIA “ or “An export incentive”)

while others were very specific and requested “financial assistance in creating cost reduction for

fragrance packaging to reduce weight.” One exporter requested “subsidies on exports as well as the

reduction of local raw steel prices”

One exporter felt that no incentives were required but that the burden of compliance be removed

and stated: “For Government to accept that BEE, excessive taxation and politicised labour are

harming the country more than it does good. Why use local labour and get restricted when you can

use foreign labour abroad without restrictions? I could not find any reason (other than for local

sales) to manufacture locally.” Another exporter was concerned that South Africa’s monetary policy

was contributing to and competitiveness and requested a ”weaker rand.”

Another exporter requested “Protection (or at the minimum some assistance in protecting)

intellectual rights. One exporter requested protection in the form of “import duties on structural

steel”

Country branding is important and one respondent suggested that an “International Brand building

incentive” be introduced.

Buying local was also important. “Investment of our television license fees back into local production

by the SABC where it's supposed to be. A commitment from our national broadcaster towards local

production skills rather than their political objectives.”


The respondents generally preferred obtaining their export related assistance face to face. This was

followed by receiving assistance by email was tailored answers to the questions that they posed.

Many of the respondents did not like telephonic advice or information provided in hard copies.

DRAFT

Figure 125: Preferred means of obtaining export-related assistance

1.3.13 Final comments – past exporters

the following comments were provided by the past exporters and have been included verbatim only

with minor changes to improve spelling or grammar:

1. PLEASE consider DTI support for medical device manufacturers, at least country pavilion at

MEDICA trade fair in Dusseldorf, Germany (www.medica.de). Many other countries already

do this. EMIA helps but this type of show is too expensive for small players.

2. Our business is 18 years old, retrenchments will take place shortly if we can afford this.

Support for the EC is very limited as big automotive structures dictate. Our SMME

requirements for exposure is tough into other sectors in SA or Export. We will not give up !

3. Export training for SMME's should be mandatory, BEFORE doing shows/expo's overseas.

4. The Free State Development Corp has been to see us to try get funding for their brochures.

They have been helpful in answering our questions but I feel that they could do a lot more to

understand our businesses and then recommend and assist in the various support structures

that are available, that we are not aware of. With their support I believe we could be doing a

lot more in creating new export business. Sharing knowledge with other producers could

also assist us.

5. When you start up with a good sound idea, it is your baby and nobody is interested whether

you make a success or not. It is the person starting up who needs help, not the company

with a turnover of R4 Mil or more.

6. We need trading conditions to be applicable to everyone. South African business who

operate within the law trade at a disadvantage to "foreign owned” ones.

0

5

10

15

20

25

30

Face-to-face consultation Telephonic advice E-mail (automatic,

subscription-type

information)

E-mail (tailored answers to

requests)

Websites and/or electronic

publications

Hard copy publications

Most preferred Preferred OK Do not like

DRAFT

7. The government should "get out of the way” of business. Any interaction I have with a

government department just slows me down'

DRAFT

1.4 Survey of non-exporters (potential exporters)

The purpose of the survey was to solicit the opinions of non-exporters and to find out why they were

not exporting, as well as what drivers and barriers they were experiencing, etc.


felt that the opinions of non-exporters would be different to those of exporters. Non-exporters had

perceived problems and had not necessarily experienced the actual problems that current exporters

have. In terms of the “REN-approach”, it was also necessary to try and find out why exporters exited.

Therefore a separate survey was also prepared for past exporters.

In addition to this database, requests were also sent to organised business and Export Councils, who

in turn were requested to forward the email to the members and especially potential exporters. (It is

possible that opinions regarding the effectiveness Of Export Councils could be skewed.) The DTI’s

own database was also used. This included exporters who had used the export marketing assistance

scheme or had been part of a capacity building programme. (It is possible that the opinions of

exporters that had benefited from various government incentives would also skew the survey

results.)

1.4.1 Responses to the non-exporter survey

A total of 374 exporters participated in the survey.

Origin of respondents

As would be expected most of the exporters came from Gauteng, followed by the Western Cape,

KwaZulu-Natal and the Eastern Cape. As can be seen from the table below responses from the other

provinces were rather dismal.

Table 4: Origin of responses of non-exporters

Province

Eastern Cape 25

Free State 5

Gauteng 67

KwaZulu-Natal 14

Mpumalanga 3

North West 3

Northern Cape 2

Western Cape 42

1.4.2 Size of respondents enterprises

Considering that this was a survey of non-exporters, it was to be expected that very small companies

(with less than five employees) were

DRAFT

Figure 126: Responses by size of enterprise –

number of employees

Figure 127: Responses by size of enterprise –

Turnover

1.4.3 Experience of respondents

Although there were a few large firms that responded, the vast majority of firms would be classed as

small or even very small. Nevertheless just under half of the respondents had been in business for

more than 10 years and therefore knowledgeable business practices and understand what it is to

run a successful business.

Figure 128: How long enterprise has been in business

1.4.4 Sectors represented

all sectors were represented in this survey. However three sectors were prominent:

Less than R4million






0

10

20

30

40

50

60

70

80

Less than one year More than 1 year

and less than 3

years

More than 3 years

and less than 5

years

More than 5 years

and less than 10

year

More than 10 years

101 - 200 51 - 100 11 -50 6 - 10 less than 5

less than 5 6 - 10 11 -50

51 - 100 101 - 200 More than 200

DRAFT

• other services

• wholesale and retail

• other manufacture products

Figure 129: Sectors that responded

1.4.1 Features

it was felt that it was important to identify whether the companies themselves felt that they had the

products that could be exported. Respondents were asked to compare their products to those

locally manufactured-and imported products. They were asked to compare their features, their

quality, and their price with the competitions.

Most firms that responded felt that there products at least the same features as the competition.

Smaller firms tended to be more optimistic and felt that their features were a lot better or at least

marginally better than the competition. The smaller firms did however seemed to concede that

imported products generally fared better than domestic products.

0

5

10

15

20

25

30

35

101 - 200 51 - 100 11 -50 6 - 10 less than 5

DRAFT


products, your product's FEATURES are


competitive products, your product's FEATURES

are

The respondents felt that the quality of their products was generally a lot better than the domestic

competition. Again for smaller firms tended to be more optimistic than the larger firms. Fewer

respondents felt that there product’s quality was a lot better than imported products.


products, your product's QUALITY is


competitive products, your product's QUALITY

is

0

10

20

30

40

50

60

70

80

less than 5 6 - 10 11 -50 51 - 100 101 - 200

A lot worse Marginally worse About the same

Marginally better A lot better

0

10

20

30

40

50

60

70

less than 5 6 - 10 11 -50 51 - 100 101 - 200



0

10

20

30

40

50

60

70

less than 5 6 - 10 11 -50 51 - 100 101 - 200



0

10

20

30

40

50

60

70

less than 5 6 - 10 11 -50 51 - 100 101 - 200



DRAFT

Compared with LOCAL competitive products, your product's PRICE is

Compared with LOCAL competitive products, your product's PRICE is

Compared with IMPORTED competitive products, your product's PRICE is


products, your product's PRICE is


competitive products, your product's PRICE is

1.4.2 What are the top 5 obstacles that are preventing you from getting involved in

exporting

Lack of an export culture

The survey was voluntary and therefore most of the respondents were serious about venturing into

foreign markets. A few of the respondents seem to indicate that exporting was not worth the effort.

Even one of the larger respondents (with more than 200 employees) stated “No obstacles. Our main

customer base consist of South African companies.”

Less than 5

A few of the potential exporters did not seem to have any problems, or at least did not know of any

problems, that would hamper their entry into foreign markets. This attitude can be summed up by “I

0

10

20

30

40

50

60

70

80

less than 5 6 - 10 11 -50 51 - 100 101 - 200



0

10

20

30

40

50

60

70

less than 5 6 - 10 11 -50 51 - 100 101 - 200



DRAFT

have no obstacles to prevent me to get involved in exporting.” Most of the respondents however

did understand that there were significant changes when starting to export.

Skills are important:

• Have no knowledge on how to start the route of exporting

• The failure by DTI international to provide SMME Export Development programme

• The power to be need to think outside the BOX when assisting exporter. Assistance when

one needs to verify the serious importers of our products in Africa.

• 1-I don't have enough knowledge about exporting like Pricing,etc.2-I don't have enough

money to export,3-I don't have Customise Certificate,4-I don't have enough resources to

produce more products,5-Struggle to get HS codes for my products

• Have no knowledge on import and export but have the certificate on imp/exp. Have not

have the order from abroad.

• not sure whether the product will sell enough to cover costs not sure about the destination

for selling abroad never exported, thus unsure about the how to

• 1. I don't know how it works 2. Who to sell to 3. I don't have a capital to start with in the first

place 4. I don't know what does it involves in terms of tax clearance 5. How it cost?

• Lack of negotiating skills

• Knowledge of the process

Information

• There is not enough information with those that are involved in services

•

1. I am not the product supplier 2. The products are geared for locals 3. Know how of export 4.

The learning curve is very steep and often potential exporters were unable to identify only one or

two problems and listed multiple problems. These are given below:

• Market Access Target Market Import Duties Financial Reserves Human Resources Access to

contact networks

• Finance marketing red tape

• 1. Time 2. Linkages/ Business Opportunities 3. Support information foreign business entities

4. Scams

• Although my business has been running for about 2 years, we only officially launched in

September 2012 as product development takes a long time. Nervous about international

Loads of paperwork Need expert opinion Finances

• 1) mentoring by region specific people who are experienced in exporting themselves &

accessible 2) market knowledge 3)financial restrictions 4)confidence risk is worth reward

• 1) Financial insecurity 2) logistical support 3) mentoring by regionally local that have done it

before. 4) market knowledge

DRAFT

• Finance Manufacture Marketing

• Financial resources to access marketing to potential overseas customers are limited

Regulatory requirements in terms of documentation specifically related to cosmetics can be

a challenge Availability and or access to locally produced packaging and specialized raw

materials are limited, often leading to us having to rely on overseas sources in an effort to

reduce total cost of goods. When available locally the costs are generally higher than what is

available on the international market. However, when accessing materials internationally

duties and taxes play a big role in costs as many of the raw materials utilized in cosmetics

are classified as luxury goods so the ad valorem is very high. An example would be sunscreen

actives.

• 1 Customers 2 The need to improve logistics 3 Exporting knowledge 4 Do not know how to

source companies that want to import 5 Finance

• Lack of volumes - Markets demand large volumes. Lack of funding - We do have some

government assistance however it is distributed very slowly and intermitted. Technical

expensive machinery to process is a big barrier to entry Lack of knowledge sharing and

conferences limits our knowledge and ability to expand or try new opportunities

• Exposure Finance Support services Market intelligent

• 1.Lack of information about exporting 2.Lack of finance 3.Getting customs certificate

4.Shortage of labours 5.Getting patent

• Length of time from despatch to payment. Lack of knowledge about exporting. Fear that

there will be too much red tape. Too few employees and not intending to employ more. Age,

both partners over 60, do not want to expand.

• 1 TIme - fully committed. 2 Additional young engineers. I would want to employ younger

engineers and mentor them for the future but that costs money. Its chicken and egg get the

work-employ engineers [can be a risk], or employ engineers and get the work [is expensive]

3 Contacts - plenty of export contacts are available through web sites but in the technology

sphere you have to get to know possible partners before getting involved 4 Marketing - it is

expensive to market to foreign markets - in this business it is the personal relationships

which lead to work, not good web pages, so you have to visit 5 Lack of industry working

together - the impression is that individual companies look after themselves rather than

coordinating their efforts for the common SA good

• 1. Capital to develop our coal deposit up to a bankable feasibility study and to register

mining rights. 2. Capital to develop into a operating mine. 3. Access rail quota allocation to

Richards Bay Coal

•

Finance

Lack of finance, access to finance and the cost of finance presented problems for potential

exporters:

• Money Money Money Money Knowledge

• Working capital to buy stock capacity to produce enough stock lack of contacts abroad lack

of knowledge about exporting

• Capital for expansion

DRAFT

• We cannot afford to got to all the international wine shows where we can meet potential

clients and agents. Our vintages are old and although perfectly drinkable there is some

market resistance. Our budget does not allow for regular overseas travel to source agents

and clients

• Financial resources

• Capital resources production space not aware which root to follow for exporting

Red tape

• Lack of support for the industry - we have to source regulatory services from EU - SABS &

DOH are hopeless Red tape - too much bureaucracy - SARS, UIF, SDL, BEE etc etc Lack of

investment funding - no VC in SA Government procurement policies offer zero incentive for

SA manufacture, so no support for local market

• Bureaucracy within TFR / Ports authority 2. Export slots not accessible to SME 3. Too many

obstacles for SME aspirant entrants to acquire a slot for exporting. 4. TFR rail asset supply

for SME leaves a lot to be desired - unreliable for planning and projections. 5. Too many

obstacles on the way to export own coal.

• Red tape and labelling requirements.

• SARS

• Bureaucracy to get all documentation and tax issues in place

Production problems identified

many of the respondents indicated that they had problems regarding the production of their

products that they planned to export. Some of the problems are discussed under Finance since he

potential exporters did not have access to the funding to purchase machinery. However other

problems such as suitable “working space” was also identified. Although government does provide

incubation facilities for small and micro firms, these are not always adequate.

Firms also identified manpower issues as being a problem. These related to specialist skills that were

in short supply.

Marketing problems identified

Sales and marketing Product finalisation User acceptance

Establishment of European Agents and Distributors Finance Marketing drive and brand

establishment in Europe Training of a many assembly and manufacturing employees Financing of a

1. Exposure to Export Markets, especially in Africa.

Prices too high Parts not made in South Africa

Product to sell on the international market Finance to plant the crop Management Expertise Worker

expertise Market to sell to

DRAFT

Unavailability of information The race barrier(Our company is largely made up of Black

Female(coloured) in Management) Pressure from well established companies who have adequate

facilities to engage in export/import Unavailability of sponsors Transport barrier

Lack of enough capital our Business not big enough to deliver the required after sales service and

technical help if required

Transport cost, export levies, saturated market

1. Finance for Machinery 2. Working Space 3. Capacity to Compete 4. Exposure 5. Export Knowledge

Penetrating international market Finance Network or contacts opportunities Requirements for

registration on exports Limitations

Capital Inexperience Risk Contacts Know-how

Lack of knowledge Lack of opportunity Finances Lack of experience/no experience Lack of support

1. Finance 2. Market

Product is Intellectual Property and does not have export potential

Finance Marketing Staff Equipment Age

Finance for marketing overseas

Reaching foreign market

Producing at competitive price to attract overseas buyers

Finding niche

Small manufacturer pool financial requirements expertise access to markets competition

Manpower, Financial support, Capacity

Finance

Reliable labour

Machinery workshop space

Finance Knowledge on how it works technique of mass production

To Small , Capital.

Documentation nightmare Staff shortage (only my husband and myself) Time constraints Financial

resources Logistical difficulties (transport from middle of the Karoo)

Customer requirements; Green environmental requirement; Cost; competitiveness

Competitive international pricing Lack of government incentives Current COSM benefit too little Red

tape from government institutions Logistics( geographical disadvantage)

DRAFT

costs

6-10 employees

1. Finance 2. Product still needs to be tested by independent laboratories. All are overseas. 3.

Product still needs to be internationally certified (CE Mark, FDA Approval)

Space, machinery and staff. Also export leads.

Orders, Market, Finances, good channels, fast delivery,

Unaware how the international market I will accept our product The finance to take part in the

export initiative The finances to export

Finance for start-up capital Finance for start-up capital Finance for start-up capital Finance for start-

up capital Finance for start-up capital

1. Cost of additional equipment 2. Need more staff and admin assistance 3. Cost of Packaging 4.

Legislation hindering business growth - which requires funding (eg fire store rooms, consumer

protection act - needing ISO to be seen as a contender - all legal paperwork and certifications to be

able to compete against the bigger firms who have the staff to get all these structures in place) 5.

Capital outlay

The right contacts The present owners have never explored but I expect to be the new owner shortly

1. Identifying export market for our products 2.identfying major export users 3.maginalisation 4.

Mentorship

Resources Costs and cash flow constraints Unknown market potential Business risks Technical back-

up in export country

1. Still growing local market 2. Capacity 3. Finances 4. Export capacity and knowledge. 5. Fear of

foreign markets

Capital Customs & Excise (liquor)

Not interested

1. Finance 2. Market Exposure 3. Competitive Advantage

The type of services we rendering can not be exported

First need to be successful locally. Production staff slightly unreliable. Administration involved in

exporting. Lack of reliable marketing contacts abroad. Expensive distribution compared to local

distribution.

11-50

finance, knowledge assistance

Markets Export training Finance Transport Cooling

DRAFT

1. Know how 2. Finance 3. Labelling legislation 4. Financial performance 5. Pricing

Distance from markets Lack of knowledge of markets Finance to research export markets Application

for export licence turned down for no logical reason.

Finance

1. Logistics 2. Finding a agent to partner with distribution of the product 3.

We are currently negotiating exports to the UK; the negotiations are just taking slightly longer than

anticipated. Also, as we are still a relatively new company, we have not yet had as much

international exposure (i.e. by taking part in more exhibitions overseas) than we would surely

otherwise have done.

We do not have the market at the moment.

Finance for tooling and finance to bridge the waiting period between exporting and collecting

payments. Knowledge of export market and export process.

1. We manufacture products for Local American Company and they then export our product. 2. We

manufacture tooling for German and British companies which they use to manufacture parts locally

and then export the parts. 3. We don’t have the contacts to export. 4. We have VW in South Africa

but they don’t use South African Companies to run production directly for them they use German

Companies like Bel-Essex Eberspacher and Dana Spicer who is locally stationed to run their

production and use us to manufacture the tooling. (Al the profits of those companies go to foreign

countries and the money does not stay in South Africa.) 5.These people want to convince everyone

that we dont have the skill to run this production in South Africa but I can proof that we can as we

are doing it already as a 3rd party.

As a workers co-operative we struggle to get overdraft facilities. Not enough cashflow to purchase

enough raw material like indigenous wood. Need to go full cycle and cut and dry own logs/wood -to

stockpile so that we can increase productivity Need to employ more assistants and increase

mentoring or in service skills training under experienced artisan Handcrafted high quality furniture

more difficult to manufacture -lot of finer precision skills involved

lack of knowledge

Require a global sales network. International requirements and standards. International market

knowledge.

The full assistant on how to exporting. The funding Workshops according the export Transporting

Marketing

1. Market knowledge. 2. Distributor 3. Advertising 4. Sales leads 5. Marketing costs.

We are an export facilitation Agency and we dont do exports ourselves

Finance

DRAFT

# I have not got the opportunity to supply out of the country. # Not knowing the all information

about how to get around. # Luck of support # Researching about my product to other country.

no need for it as the local suppliers have all the parts we need

Legislation

1. Would need more staff, which I'm not willing to employ, given the present state of legislation 2.

Unknown export market demand 3. Unknown export market environment 4. Issues around permits,

vat, and 5. Collection of money from customers?

Time Funding Comfort Resources Knowledge of markets

- we are a non-manufacturing entity - we do not have export products - reselling locally made goods

for export would be non-competitive - reselling locally made goods for export could have quality

issues - establishing the right target market

Financial Resources Technical Expertise Very High cost of Labour Outdated Equipment poor export

incentives vs China

51-100 employees

1 Insufficient raw material to be able to satisfy export volumes 2.Our prices will not be competitive

abroad 3.Challenge to secure sales, marketing and distribution agents abroad 4.Product packaging

1. Old equipment 2. Difficulty in meeting new capital investment returns 3. Some capacity limitations

4. Low international pricing from China and India 5. Poor local protection over cheap imports

FINANCE

too higher cost of labour bad productivity too higher cost of raw materials Logistical delays in having

to import certain elements of the finished product from overseas (as they are not available locally),

& then having to be export the finished goods back overseas which makes the complete turnaround

time unfeasible Cost of marketing the company internationally

The weight and bulk of our precast concrete products prevents us from exporting or importing. Even

within SA we can only market within a radius of 300km otherwise transport costs make it

uneconomic

Logistics System Restrains Trade mark

100 plus

1. Which countries to export to 2. Financial resources to fund exports. 3. Administration of exports 4.

Establishing credit worthiness of the buyer overseas 5. No facility to network with other exporters of

the same products

product is not one that can be competitive due to nature of product.

Overseas exposure Distance from markets Import tariffs on raw materials Volatile exchange rate

Negative perceptions

DRAFT

1.4.3 How much of a contribution has the dti's incentive schemes had on your company

Figure 136: Automotive Investment Scheme (AIS) Figure 137: Black Business Supplier Development

Programme (BBSDP)

Figure 138: Business Process Services (BPS) Figure 139: Capital Projects Feasibility Programme

(CPFP)

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

70

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

70

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

DRAFT

Figure 140: Clothing and Textile Competitiveness

Improvement Programme (CTCIP)

Figure 141: Co-operative Incentive Scheme (CIS)

Figure 142: Film and Television Production Incentives Figure 143: Export Marketing and Investment

Assistance (EMIA)

Figure 144: Isivande Women’s Fund Figure 145: Incubation Support Programme (ISP)

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

Series1 Series2 Series3 Series4 Series5

DRAFT

Figure 146: Manufacturing Investment

Programme (MIP)

Figure 147: The Manufacturing Competitiveness

Enhancement Programme (MCEP)

Figure 148: Sector-Specific Assistance Scheme

(SSAS)

Figure 149: Production Incentive (PI)

Figure 150: Small Medium Enterprise

Development Programme (SMEDP)

Figure 151: Section 12I Tax Allowance Incentive

(12I TAI)

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

70

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

DRAFT

Figure 152: Seda Technology Programme (STP) Figure 153: Support Programme for Industrial

Innovation (SPII)

Figure 154: Tourism Support Programme (TSP) Figure 155: Technology and Human Resources

for Industry Programme (THRIP)

Comments on incentives

As can be seen from the graphs above three main problems can immediately be identified:

1. many potential exporters are unaware that incentives are indeed available

2. if they are aware of the schemes, they find them too difficult to access

3. many of the schemes were simply not appropriate for most of the respondents

Some of the respondents did indicate positive outcomes to the incentives provided:

1. We have successfully developed a product with the aid of SPII and introduced it into the

local market. This product was developed and tested to international standards and we

command 70% of the local market in competition with three international competitors. In

the four years of supplying the local market we have had not a single return or warranty

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

60

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

0

10

20

30

40

50

Significant

contribution

Moderate

contribution

Little or no

contribution

Not

applicable

for us

Too difficult

to access

Unaware of

this

incentive

scheme

less than 5 6 - 10 11 -50 51 - 100 101 - 200

DRAFT

claim. It is time to move into the international market seriously and setting up of a

manufacturing facility that can supply volumes thirty to forty times the local market.

2. We have had a very positive experience with the IDC as partners in capital expansion funding

for the expansion of our existing factory. We have also just had a site visit both from the DTI

themselves as well as a SEDA representative and feedback has been very positive. However,

it remains to be seen how easy and accessible the process is once we start the application

process.

3. I am grateful for the help that i have received from DTI it is highly appreciated

4. We have benefited from THRIP and EMIA and will soon be putting in an important SPII

application. As a result of completing this survey, I have learned about some of the other

programmes that the DTI offers and I will be exploring these further.

5. It is great and we have had funding this year for some equipment.

6. The EMIA is very good idea so that we as emerging farmers could get the exposure to the

markets and exhibit.

7. In general, the incentives are good. We have applied for one but have thus far received no

feedback whatsoever. Oddly enough, we have gotten more interest from foreign venture

capitalists for these particular initiatives than our own government. That said, however, we

are incubatees at the SEDA ICT incubator so a lot of brilliant work is being done.

Less than 5

Been to MCEP launch but we are too small to reap most of the benefits.

Most schemes have thresholds that are way too high.... for medical device industry

I have very little knowledge of these incentives and would like to find out which are applicable to us

and where more information can be sourced about those applicable.

It's impossible to get assistance. I've completed applications; I've never had any feedback.

Very hard to obtain

IDC KHULA SHANDUKA etc they are all difficult to access

The paperwork goes missing, so the process although sounding great takes up to 3 months to get

sorted. Payment after takes up to 3 months to get - too long for small business

Seda is working on a plan to set us up towards a commercial goal. Have started a month ago

Not aware of incentives

Government needs to make these incentive schemes accessible and understandable to

inexperienced very small businesses. Often government jargon and protocol make things to difficult

to understand and pursue by the uninitiated

Not very accessible especially if you are not a BBB-EE company

DRAFT

Applied for EMIA assistance for Beauty show 2011 - approval arrived 2 weeks AFTER the show was

over. submitted master file, for future apps, no reply or record of it. Spent money to COURIER it to

certain persons. Have applied for Beauty show London 2012 - cannot afford to fund it upfront.

The Government has made sufficient products available to Entrepreneurs; however the processing

time is sometime too lengthy.

No experience

Have given up, impression and experiences had shown that you have to be connected somehow or

known. Expenses on business plans as recommended yields no results, applications get lost or

budget depleted.

Helping us through the DTI to fund us on exhibition, to have pay for our stalls to exhibit our work.

Some government incentives is not easy to access, as my business is medium, some of the

requirements I don't have. Like my turnover is more less.

We did not know that there is something like Clothing and Textile Competitiveness Incentive

Programme(CTCIP) Can you possibly include us as well?

I only had incentive when i started by that time of Umsobomvu and after that i never heard of any

government incentive. so no i know nothing about

No knowledge

I have little knowledge of gov incentives

More public awareness programmes need to be introduced.

I believe that schemes are working for certain people because others they get it and other are

limited by requirements that will make one to give up on applying.

We have had invitations, but it has not yet been applicable to us.

GEP was very helpful even though i was not able to get a project that needed money. However i

tried to get a business plan for agriculture, i have not had any feedback from GEP/ DTI as i needed

something more permanent and more sustainable. Incentives in general not much information i

know of and you don't get to find out much about them.

I am a Business Consultant assisting others to access the incentives

Because I am a white alone owner it is not possible to participate in any government incentive

schemes

We would like to know how to access and it it is applicable to our sector

The requirements are sometime too steep and therefore act as a deterrent

DRAFT

Have used EMIA & Sass. Both good programs but dealing with govt can be frustrating. You get a

different story of what is required depending on who you talk too. They don't seem to have a clear

understanding themselves.

In general, the incentives are good. We have applied for one but have thus far received no feedback

whatsoever. Oddly enough, we have gotten more interest from foreign venture capitalists for these

particular initiatives than our own government. That said, however, we are incubatees at the SEDA

ICT incubator so a lot of brilliant work is being done.

We are lithographic printing company, dealing with small to medium businesses. I would like more

information to see if we can tap in to the exporting market

There do not seem to be any which applies to a technology company. When I tried to apply it was

said that this would probably not apply to my company. I git the impression that this was not a

priority sector as it was not understood, nor its value.

Have not participated in any government incentives regarding manufacturing. Busy with one learner-

ship member through SETA. Very little experience with incentive programmes but criteria normally

high and difficult to access for small business.

I only know about training grants issued within my sector

No involvements to date

6-10 employees

Limited awareness of schemes that could assist us

Impossible to gain access to these incentives. If you want to enquire you have to pay a consultant a

considerable amount of money without any guarantee that you will receive anything. The private

sector is expected to try and grow the economy and create jobs, and although there is a great deal

of hype about all the assistance offered, getting access to any assistance is virtually impossible. We

have found our own overseas markets, but cant produce the product due to lack of sufficient funds.

The incentive schemes are hard to access for smaller businesses as it is often based on turnover or

on current equipment assets - it is DIFFICULT to grow and focus on using the schemes when time is

limited to running the business and little time left for figuring out how to access these incentives.

The current incentives tend to be of assistance to more medium size business where the 5 to 10

million amount is achieved - but the innovation is in the smaller businesses who struggle to survive

month to month

Some of them are for SPECIFIC race groups which exclude others even if they have a fantastic idea

The entrepreneur has to have capital of their own to be able to participate They are very badly

advertised They take an unbelievable amount of time to come to fruition The employees at the dti

and IDC do not know many of these incentives, in fact they know very little in Durban I had t always

to through Johannesburg offices Most of the programmes charge for attendance and should be give

free The banks are not aware of the agreement we have always been told about with the Ethekwini

local government?

None that i can think of

DRAFT

Not easy to access

I am unaware of the incentives

No comments due to not having enough knowledge on the subject.

11-50

with DTI its very difficult to access any assistance i was at workshops where dti promised assistance

for just checking what happened with my application where i applied more than 6years ago i partly

gave up hope i think they gave productivity a grant this year and through them we could attend

quite a few workshops which was very informative and help with our business

Have not been ready to apply in the past. Now we are in a position to apply, but have not done so

yet.

Hard to get information about incentive programmes incentive programmes very limited to white

owned business

Please advertise the incentive to all Business owners

It involves too much red tape- should be streamlined and regionalized. We are already situated

approximately 200 km away from East London or PE and cannot afford to travel to see a consultant

with petrol prices etc. Also, quite often your Tax clearance expires before they eventually come back

to you. Too many paperwork -become disillusioned.

These are available to the previously disadvantaged.

I don’t know anything about the information.

Being a white-owned company, I cannot talk about any incentives; in fact, government would rather

not deal with me

Very bureaucratic Secret

No comment

50 plus

Have not had much exposure to government incentives

There is nothing

Application for the incentives is always a difficult process. You have to employ an expert to do it for

you, their fee structure is very high, as they know you have to employ them if you want excess to the

fund. You should have a panel of expert that can help the experts.

Incentives are often too onerous to comply with. Had a good experience 10 or so years ago but there

have been no incentives for our small/medium sized business that we can utilise. Unfortunately all

schemes involve increasing our labour force - not something the labour laws encourage. Also no tax

incentive to increase labour.

DRAFT

Most incentives have a good idea behind it but hardly ever realize, and are very hard to obtain or

access

Can't complain, would like to see a more concerted effort

1.4.4 What other services, financial assistance schemes, etc would get you exporting

Less than 5

Marketing

Exhibition Participation Funding

a mentor from a bigger business would help

A focus by SA Govt on buying local - ie supporting SA companies

Financial assistance, assistance in linking with agents

A grant to build a reputable manufacturing operations.

Development funding

EMIA

Raw material and light machinery

Marketing knowledge, tutoring/mentoring , local simple workshops,

MIDP

Marketing costs. Development costs

As a business we are currently focussing our investment on implementing infrastructure and systems

up to an international (ISO and COLIPA/FDA) standard within our business so that we are able to

deliver to the demands of both our local and international customers. For us, assistance on an

international level is the next critical step, in order to actually gain international contracts that we

can deliver on. We are ready for the business and confident we can deliver and are competitive, we

just need exposure to get the customers!

Financing of Export Orders.

Seed capital

Own allocation of a slot at the harbour.

Good marketing needed To get clients that would order our products. Get investors for our business

1.Customs certificate 2.Patent 3.Website 4.Recruiting more staff

More information regarding assistance schemes

Financial assistance from government to export clothing to other parts of the world.

DRAFT

i don't need only financial assistance! i also need to be equipped to do it correctly and profitably for

our country's economy to grow, as i think the reason why we do exporting is to boost our economy.

Banking rates

Continued Training and Support

I think government has to assist with funding

Capital to get product to customers and market.

Dont know

I would welcome it if the DTI had a database of service providers that get opportunity to assist

people to access the incentives

None

we cannot export

Post exhibition assistance. I have exhibited twice at SIAL, Paris and both times have had to send

samples to potential customers. This is very expensive. Maybe assistance could be given to

exhibitors for a window period of say 2 - 3 months after a show where freight costs will be covered.

As we are in clothing and textiles, the single biggest difficulty is getting a letter of intent from a

customer to whom we may export.

We require knowledge

Travelling expenses and joining a industry wide marketing programme

Need to have advice

Financial assistance to buy small machinery and product to manufacture help with red tape.

possibly a mentors programme

None

An incentive for green packaging solutions for export programmes

Larger contribution from COSM for steel manufacturers. DTI increase EMIA / Tisa funding for

research and exhibitions

6-10

It is our intention to export our products as soon as they are certified.

Finding the sales, marketing and definitely financial assistance.

Gluten free certification, finances to start the export initiative, knowledge and expertise in how to

negotiate in the export field

Have no idea.

DRAFT

Equipment purchasing, the capital to have - to claim back when we are done.

Admission on trade missions instead of the politicians going on holiday they should only be made up

of entrepreneurs and business people, not politicians and we do not have to stay in 5 star

establishments. Sufficient notice of up-coming trade missions so that we have time to apply. Big Bold

advertising of ALL services available on TV, radio, internet and every possible outlet.

Need more clarification on this

Don’t know

Not sure.

11-50

machinery, set up to uplift my business to give them a better product than what we produce here

localy and to make sure they cannot compete with South Africa

Knowledge of, and exposure to markets, especially in Africa.

help in conducting market research into possible export markets, help investing in correct

equipment, bridging capital, help in planning/executing the export process

Not sure-but also not consultants - they seldom deliver- better to work direct with ECDC

South Africa needs a local OEM for rolling stock that will assist SA suppliers to reach the international

market. With localisation in every country it is very difficult as an South African company to break

into the international market.

A workshop on how to export, all the legal requirements and red tape procedure would be a good

start. Thereafter assistance of any form would help.

anglo

Financial and Marketing assistance Knowledge of export markets

51-100

Business will need to undergo a recapitalisation project

To be able to get gold and silver on a 6-month quota

Realistic budgets to exhibit the companies services & goods at international trade exhibitions Higher

import tariffs on imported finished goods Dropping of ad valorem tax on locally produced goods

Our products are too heavy and bulky to export

Greater than 100

All the help and services that will eliminate the factors explained under number 8 above.

tax incentives.


DRAFT

Figure 156:

Mentally and financially not ready for export

DTI very hard to reach by phone. Often don't return voice mail. Often don't respond to e-mail.

Not interested in this market

Consultation meeting face to face and with adequate support

Implementation of Assistance Programme would mitigate / remove barriers to exporting.

being contacted and be advised is not enough but being taught how to do business diligently will

profit us all.

Can we have an interview with one of your consultants re export of clothing?

BEE is a hindrance and a disincentive.

I would appreciate any further useful information to get our company moving

Prefer to engage with someone who can make a decision and commit

Just from the limited exposure we have had on an international basis, we have already had several

international contacts interested in doing business with us. Imagine what we can do if we are able

to market directly to the international market on a professional level.

there is not enough/speedy feedback on questions asked, help on advice. no specific person to talk

to. dont know the structure of each division.

Always good to get advisors to your small rural town enterprise to see first hand what you are doing

it would be great if there was a consultant to whom you can go and meet with and lease with. too

often with government programmes there are so many people in different offices that no one is held

accountable and nothing gets done. have one consultant helping a pool of his/her own clients..

always deal with one person.

Pavilion Trade Fares are not well coordinated and timely disseminated. Once got exposed to

Malaysia market with an appetizing footprint

Assistance with how to wade through all the information and what is relevant to your business only

is the biggest key PLEASE - lots of the information and structures relate to medium and large

business structures only

DRAFT

We need government total intervention

I initially started with manufacturing of linen, curtaining, comforters & duvets, throws etc which

were printed with our own designs. there was a market for it, but there were no government

support to assist with setting up the manufacturing plant even after buying an 8,5ha plot in Pretoria

for the factory operations. Finally went into consulting and outsource all manufacturing processes.

NO

There seems to be inadequate information as to which category one fits into/who to approach for

assistance. Certain funds require certain criteria, but then you find that apart from that, you have to

have been in business for a minimum of 1 year. Its all so confusing and frustrating.

May be the Dti could do more training in export

Manufacturing set item lines would be far more profitable and easier than continuous custom made

items.

because we are a small enterprise its very difficult to run and compete with international market we

are still working with the old school technology but are in the process of improving hopefully with

the help of DTI

This is a very timely survey for my company.

DRAFT

1.5 Appendix: Exporters that responded

ROOIBOS LTD

Kenbrogie Plastics + Cemicals

Medhold

Decade Aesthetic Solutions

Malanseuns Pleasure Plants

Gabler Medical

Orange River Cellars

seaqual c c

Zulu Afrika Safaris

Buck 'n Bass Taxidermy

Levubu Dried Fruit

Swift Silliker Pty Ltd

Vision Biotech

The Fairvalley Wine Co.

Almenkerk Wine Estate

Noble Spirits CC

Engineering Plastics

Manufacturing

Shatterprufe (Pty) Ltd

Fibretek Developments (Pty)

Ltd

Lifeassay Diagnostics

Triz Engineering Solutions (Pty)

Ltd

Mokuti Herbs International

Zidela Wines

S A Leisure Pty Ltd

BE SAFE PARAMEDICAL

Viking Fishing Co Deep Sea Pty

Ltd

Olrac SPS

Blaauwklippen Wines

Snyman Flora (Pty) Ltd

Safari Manufacturing cc

Shirley's Rustic Frames

Hertex Fabrics

La Ric Mal cc

Koopmanskloof Wingerde (Pty)

LTD

Sally Arnold

Anura Vineyards

Cape Hothouse VegetablesCC

7 Sea Geosciences

JCL Plastic Enterprises

Croce del Sud Int. Mktg (Pty)

Ltd

Afriplex Pty Ltd

Rancho Las Plumas

Kluyts and Company

Beds n Bunks International

Heinz Foods SA

ALPINE LOUNGE

Sinapi biomedical

Prozone Systems

Mielie Fashions cc

Verlaque Foods

Kalk Bay Foods

MAN Vintners (Pty) Ltd.

violarosa foods

Nyamezela

DIACOUSTIC MEDICAL DEVICES

At Source Handmade Foods

(Pty) Ltd

Phoenix Surgical SA (Pty) Ltd

NEXTUBE

Tuffy Brands

Quiver Wines and Spirits

MCM Trading CC

Cape Natural Tea Products

Zandvliet

Strandveld Wines Pty LTD

Agriligna (Pty) Ltd

DITA Products (Pty) Ltd

Vergenoegd Wine Estate

Nampak

Packaging Shoppe

Tline Pro cc

Jannie Reuvers Sails (Pty) Ltd

The Fibreglass Shop

Kama Industries (Pty)Ltd

Mcnab's

Soulever wellness

Amber Products

providence metal recyclers

Golden Macadamias

Karl Human Taxidermy cc.

Carl Zeiss Pty. Ltd.

Candy Tops (Pty)Ltd

Aveng Trident Steel

Chemisphere Technologies

Stems Fruit

Dynamic Commodities (Pty) Ltd

Upendo Promotions and

Consultancy

Kokskraal Handcrafts

ECDC

fox&swan cc

Afrupro Exporters

OPM Tooling cc

Ampliform

Capaia Wines

Bagshaw Footwear

The High Road

Adroit

CMC

Boardman Bros (Pty) Ltd

NEW ENGLAND WOOL SA

Jurgens Ci (Pty) Ltd

Kat River Citrus Primary Co-

operative Ltd

GSM Trading SA (Pty) Ltd

Tyco Valves and Controls

SalonCare

Senior Flexonics

Laughland

AIG Sales (Pty) Ltd

ESAB AFRICA

Bavaria Fruit Estate

CONBRAKO (Pty) LTD

Umlungu African Art Dealers

UNIFRUTTI BLYDERIVER

Evraz Vametco Alloys (Pty) Ltd

Vitrex Pty Ltd

Speciality Metals (Pty) Ltd

actom (pty) ltd

CWI

Lee-Chem Laboratories

Nautica Organic Trading cc

Elizabeth Arden

Perspex South Africa

Royal adhesive industries

Hall Longmore

NC2 SA

FINO COSMETICS

DRAFT

Bob's Bits

I-Slices Manufacturing

Man Truck & Bus (SA) (Pty) Ltd

Brelko Conveyor Products

(Pty)Ltd

Visteon SA

Gold Reef Speciality Chemicals

BMW South Africa

Flavour King

lammershoek wine estate

Indian Ocean Export Company

(Pty) Limited

TW CERAMICS

Leo GArments (Pty) Ltd

diks construction &cleaning pty

ltd

biscoplus

Cape Moondance

Pitto (Pty) Ltd

distell

Waterlinx

crafford & crasfford architects

Cape Diamond Wines

First National Battery

Centurion Systems (Pty) Ltd.

NutPro CC

Macsteel Exports

Alexander

The Herbal Horse

Reutech Radar Systems a

Division of Reutech LTD

Macsteel Exports

Simonsig Wine Estate

Wine Ways cc

Best Beads cc T/A Umtha

Constantia Glen

Majestic Data Pty Ltd

Rhodes Food Group Pty Ltd

Ken Forrester

Perdeberg Group Pty Ltd

DRYERS FOR AFRICA

VUKA COMMONDALE TREATED

TIMBER (Pty) LTD

Free To Grow

Brass Images cc

Cruiser Cats

OCANNIC TRADING CC

CROCODILE VALLEY CITRUS CO.

Summerpride Foods

CCDI

Robor (Pty) Ltd

Chic Fusion

Powertech Transformers

AMSA

Castco Precision Castings (Pty)

Ltd

General Cable (National cables)

PDC

SA Fruit & Vegetable Canners

Export Council (SAFVCEC)

Universal Clips CC

Panel Pro Technologies

Sureguide SA

GRANOR PASSI

AFRICAN ART EMPORIUM CC

t/a LIMPOPO CERAMICS

Hendok Group

ABB

Lone Tree Farms

Trans-Africa Projects

Columbus Stainless

Robert Bosch Pty Ltd

ABB

Consolidated African

Technologies ( Pty ) Ltd

POWERTECH AFRICA

I&J

LED Lighting South Africa

Premier Fishing SA (Pty) Ltd

Brenn-O-Kem(Pty)Ltd

Wayne fumboots

Corrida Shoes

AMC Fruit RSA (Pty) Ltd

Bagshaw Footwear

Blue Africa Trading

In-House Paging Systems

SteriTech

Agrilink

chemical pump & Valve

Marketing

Saw Specialist

mukwa traders c c

Dole South Africa

Smith mining Equipment

City Rubber Stamp & Printing

Co

ceres fruit processors

Ware Associates

Elro J Braak (Pty) Ltd

Reutech Fuchs Electronics

Yamaha Distributors

Custom Harness Manufacturers

Grown4U

Ainsworth Engineering (Pty) Ltd

r

ac morrison

Vaja Products

Booy

PRIVATE

Fibreglass Shop

DEMARK INT

ICP (Pty) LTD

C&H Joinery CC

Bridgestone

Biggie Best

ZF Services South Africa (Pty)

Ltd

Fimm

Tru-Cape-Fruit Marketing

Colors Fruit

T/A SEMEN IMPORTER

SERVICES

Afrisam

Investmech (Pty) Ltd

Saint-Gobain Construction

Products

Producut Lubrication

Technologies (Pty) Ltd

Rescomp Hnadgun

Technologies

Ragon Industries

Bohlale Safari & Golf Tours

Hulamin Limited

UniChoice Produce Direct (Pty)

Ltd

DRAFT

Magaliesberg Citrus Comp. Ltd

Schweitzer Engineering labs

Praxia Trading

Namakwa Sands t/a Tronox

Minerals Sands (Pty) Ltd

ASSOCIATED ADDITIVES

NISSAN SOUTH AFRICA

SH-TECH cc

Wheel Assemblers

Sinogold (Pty) Ltd

Powertech Transformers

Van Doorn Citrus

Sizwe IT Group

GP van Niekerk Ondernemings

iCouch (Pty) Limited t/a

BRADBURY FURNITURE MNFS.

pioneer plastics(pty)ltd

Fire and Security Techniques

TAG YACHTS

Bramhope

Nativa Pty Ltd

a r industrial supplies cc

Autoneum Feltex (Pty) Ltd

Lorbrand (Pty) Ltd

CIM LUBRI FUEL

AGE Technologies

SRF Industex Belting

Supreme Spring

OTB Distribution

Suzuki South Africa

GSS PE

Day Knight Services

Rand York Castings (Pty) Ltd

2

Mend-A-Bath International

Motor Body Construction

Cathexis Technologies

Multotec

DKT Engineering

J & J Electronic

TRU Yachts

Veritas Exports cc

PSV Mitech Control Valves (Pty)

Ltd

llandt exports cc

Camdeboo Meat Processors

hhyyg

Blue Cube Systems (Pty) Ltd

AfBuSo (Pty) Ltd

Martin Trailer Company (Pty)

Ltd.

Guduza System Technologies

David Brown Gear Industries

Wefco Marketing Int'l CC

Veritas Exports

Andrew Mentis (Pty) Ltd

Coin De Mire Exports

Multotec (Pty) Ltd

Inhep Electronics Holdings (Pty)

Ltd

Veecraft Marine cc

MIASA

Rand York Minerals

OPTOPLAST CC

Drotsky aktief (Pty) Ltd

MBB Consulting Engineers

Z.A.ZEN Marketing &

Consulting CC

Klimax manufacturing LTD

GMH/CPP Consulting Engineers

Boating World

Corobrik (Pty) Ltd

Pratley Group

Standerton Mills

Grodata

Dimension Data Pty Ltd

All Office Equipment (Pty) Ltd

EUROGEAR (Pty) Ltd.

Behr South Africa

Villiera Wines

Transocean Exporters

Southern Ocean

Tellumat Pty Ltd

Karbochem

Medfurn Manufacturers

(Pty)LTD

Hose Manufacturers

Powerworks

Easyhold

Quick Pools cc

Allens Meshco Group

Parsec (Pty) Ltd

CBI ELECTRIC ABERDARE ATC

TELECOM CABLES (Pty) LTD

Lowrance SA

Gecat Marine CC

southern ropes

Quantum Sails

Epping Textiles

Nautic Africa (Pty) Ltd

KNYSNA YACHT COMPANY

Emerson Network Power

AquaQuad (Pty) Limited

Veecraft Marine cc

Computers 4 Kids cc

SOUTH CAPE OSTRICH

TANNING

Dano Textile Industries (Pty)

Ltd

Likusasa Engineering and

Contracting (Pty) Ltd

Thermitrex

ArcelorMittal South Africa

Abredare Cables

Bosal Afrika

powertech calidus

Ritco Manufacturing Jewellers

I&J

Magnavolt Trading 215cc t/a

Metal Image

Tubular Track Pty Ltd

Transoil Services

Rockwell Automation

Group Five Construction

Inteletrack

Sapex Exports

Dole South Africa

Andrew Mentis (Pty) Ltd

Scaw SA (Pty) LTD

Ntuthuko Generation

Maccaferri SA.

General Motors

SpanAfrica Steel Structures

Horne Group

CBC Fasteners

DRAFT

1.6 Non-exporters

A TURNER MFG JEWELLERS

Adam's Eden Guest House

African Eco Products

Algoa Cement Industries

Aloe Vera c.c.

Aloe Vera Westcoast

Aluminium Federation of SA

Amatoytoy

Amber Products

Amskoomary Construction services

ANPA Jewels

Arcadia City Improvement District

ArcelorMittal SA

Ascot Upholstery

BAP South Africa

Bedford Eagle Hout Co-operative

Bisousoleil

BRANDSUNLIMITEDSA

Bravo Africa Logistics

Brits Silkscreen Printers cc

Business Doctor

Cali Craft & Gems

Cape Olive Products (Pty) Ltd

CapeRay Medical (Pty) Ltd

Capital AV

CCDI

CD Consultancy

Chilli-B

comessa food services

Crowie Property Group (Pty) Ltd

Cupboard Value

CZ Electronics Manufacturing (Pty) Ltd

Digisec (Pty) Ltd

Dinthagile Trading Projects

Douglas Jones & Co

Dr JA Kunzmann Practice

Dramaco Tooling CC

dustays office design

Dynamic Engineering

E5 Creations

EASIPACK (PTY) LTD

Eastern Cape Development Corporation

ECN Electrical & Airconditioing Services

eden south trading 1 cc

eden south trading 1 cc

Emmach Enterprises

EP ELECTRICAL DISTRIBUTORS

Equisale 43 cc

Era Designs

eXcover Africa

Folio Stationers (Pty) Ltd

Forma Viva

Fresh Produce Exporters' Forum (FPEF)

Friday24 LOgistics (Pty) Ltd

FUCHI ELECTRONICS CO., LTD.

Gaulu Group (Pty) Ltd

Geomicron SA

GL Enterprises Trust

Gold and Finance

Goodpack SA

Gridnic Agencies cc

H&H Mnf Jewellers

Harmsworth Investment Holdings (Pty) Ltd

Helluva Holdings

Hlanganisa Technical

Honest Chocolate

INDUSTRIAL EMBROIDERERS

Inkanyezi Yolwazi Fashion Design and Art

Isis Designer Goldsmith

Jaffes Agencies

JKN PROJECTS

JML Distributors

Jopane Leather Works

Jupilog

Kephagame trading enterprise

kethato Trading & Projects

Lieketseng General Trading

Lonaka Trading &Projects

Maenetja Attorneys

Marang Platinum (Pty) Limited

Market jewellers

MEASURECUT (PTY) LTD

Medical Devices to Market

melamed pharmacy

Millbug (Pty) Ltd

Mullers Arabica

Mullin trade

Munro Bloch Textiles CC

Natural Science Labs

Ngunezi Logistics Services

Nimble Group

Nonqaba Jewellers cc

oldworld imp&exp

oldworld imp&exp

ORCHARDS APTEEK

PEN

Perishable Products Export Control Board

pinedew guest house

Pitto (Pty) Ltd

DRAFT

PLAN TWO PLUMBING SERVICESALTHE DRAIN

SURGEON

Poly Sales t/a Polyflor

Press Art

Prothane Industrial

PULANE ENTERPRISE CONSULTING CC

Radel

Rapinvestments

reamogetsi mathlatsi trading

Refilwetswelopele Trading

Richard Pullen Studio

Rite Impressions

Rubber Stamps Etc

Sagekitchen

Scaw SA (Pty) Ltd - Fibre Products

SDK Agencies

sds

SELEPE

Self Assurance Tracking (Pty) Ltd

Servinet 20 CC

Shaikhs Exotics

Shirley"s Rustic Frames

Siyazama Klipland Boerdery

Skin Rejuvenation Technologies

skinner galleries

somtunzi tradings

sope construction

Southern Ambition/Bizgraft

Statomax Consulting

Strategic EDGE Solutions

Sukuma International CC

SurTec SA (Pty) Ltd

Svenmill Limited

Taiwan Noble Electronic Co., Ltd.

Thaba Tshwane Creations(PTY) LTD

Tharollo Craft Work

The Allergen Baker

The Cockpit Brewhouse

The House of Egoli International (Pty) Ltd

Toga Linings (Pty) Ltd

TracTec

Tucana Construction CC

Umjindi Jewellery Project

Unemployed

UVUNO IMPORT AND EXPORT

Viking Medical & Surgical Pty Ltd

Watt's Jewellers

Welgemeend Estate

Wendy Ferguson Breastforms

WINO JEWELLERS CC

Wonderboom panelbeaters

Woodworld

Yacht Technology

yiza consulting

yooti nail & body/mmmend aesthetic

YTC cc t/a Avalon Castle

Zachbon Construction and Projects

Zela-Tech Zambesi CC

1 survey of exporters, past exporter and potential exporters · 1 survey of exporters, past...

Documents