report on importing to south africa

INTERNATIONAL SUPPLY CHAIN REPORT

IMPORTING INTO SOUTH AFRICA

SEXY PANDAS INTERNATIONALCAMPUS DRIVE

IRVINE, CA 92612

NOVEMBER 2015

Prepared by: Bernard BraunNadine Kadri AltourjumanMarcello ZerbiniElena Zuccarelli

International Supply Chain Management Report – South Africa

Table of ContentsINTRODUCTION.................................................................................................................................2THE SOUTH AFRICAN MEDICAL DEVICE MARKET..........................................................................2IMPORT REGULATIONS.....................................................................................................................3MEDICAL DEVICES IMPORT REGULATIONS....................................................................................10DISTRIBUTION CHANNELS..............................................................................................................11SOUTH AFRICA AGENTS & DISTRIBUTORS....................................................................................13SUMMARY TIMELINE & COSTS......................................................................................................16REFERENCES...................................................................................................................................18

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INTRODUCTIONThis report was prepared to help HSI, a US company, enter the South African Market.

Specifically, HSI wishes to export Heat Moisture Exchangers (HME) to South Africa – HMEs are medical devices used in mechanically ventilated patients to help prevent complications due to "drying of the respiratory mucosa, such as mucus plugging and endotracheal tube (ETT) occlusion”. They are used in conjunction with medical ventilators for comatose patients or after a major surgery and are considered consumables. In addition to standard HME devices HSI manufactures Heat Moisture Exchangers & Filters (HMEF) devices which serve the same purpose but add a bacterial filter meant to prevent infections.

To assist HSI, Sexy Pandas conducted research on the South African Market. Specifically this report provides information and recommendations on the following:

South African Medical Device Market South Africa Medical Devices Regulations South Africa Import Regulations Import Timelines & Costs South Africa’s Medical Devices Distribution Channels (including agents and distributors)

THE SOUTH AFRICAN MEDICAL DEVICE MARKETSouth Africa is defined as a middle-income country and there is demand for a full range of medical equipment. The USD 1.2 billion market is extremely price sensitive and competitive.Imports have risen approximately 10 percent per year since 2007 (in local currency terms).This is set to continue as the South African government is planning to spend around USD 48 billion on health over the next three years as part of the impending National Health InsuranceScheme. The majority of the spending will be on upgrading hospital infrastructure and medical equipment, as well as HR resource development programs. According to Business MonitorInternational, almost 2,000 health facilities and 50 nursing colleges were in different stages of planning, construction and upgrading in 2012. South Africa’s Finance Minister’s Budget Speech in February 2013 has set aside USD 15 billion for health spending in this year.

National priority is given to communicable diseases such as HIV/AIDS and tuberculosis.However, there is increasing focus on chronic and lifestyle diseases such as asthma; cancer; diabetes; obesity; coronary, and vascular disease and osteoporosis. Opportunities exist for technologies that avert or reduce disability because of these diseases.

There are currently 622 registered hospitals in South Africa providing 2.2 beds per 1,000 population; comparable to other developing nations such as Brazil (2.3 beds per 1,000) and China (2.5 per 1,000) but considerably lower than Russia (9.1 per 1,000) and South Korea (8.8 per 1,000). In terms of skills; the country has been found to have 0.7 physicians; 4.9 nurses and 0.1 dentists per 1,000 population. The public sector is considered understaffed with only 0.2 doctors per 1,000 population indicating the disparity between the public and private healthcare systems.

South Africa’s healthcare expenditure is high by developing country standards and was recorded as being proportional to 9% of GDP in 2013. Expenditure between the public and private sectors

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is at approximately 50/50 parity although substantially more people use the public healthcare system as opposed the private sector. This is expected to be skewed to the public sector over the coming years with the phasing in of the National Health Insurance (NHI).

The South African medical devices market (consumption, production and trade) is estimated at US$1.2 billion and is forecast to grow at a US$ billion Compound Annual Growth Rate (CAGR) of 7.74% between 2013 and 2018. The reasons underlying such growth include population growth, increased life expectancy, growing quadruple disease burden and increased domestic healthcare spend due to the introduction of the NHI.

South Africa’s spend on medical devices per capita is US$24, which is comparable to fellow BRICS countries. However, when comparing to more mature markets such as the United States and Germany, where per capita spends stands at US$399 and US$313 per capita respectively, it suggests that there is ample room for growth.

At present medical device imports make up 90% of the total medical device market. Analysis of international trade flows of medical devices shows that the gap between imports and exports has widened between 2004 and 2013.

Main CompetitorsAround 90 percent of medical equipment is imported with the U.S. playing a dominant role(27 percent), followed by Germany at 13.7 percent. However, imports from China have doubled over the last five years to 8.4 percent. Other notable countries include Switzerland, Japan, UK, and France. Countries like Mexico and Singapore have also increased their supply toSouth Africa.

Many suppliers in South Africa are subsidiaries of overseas corporations. The major U.S. medical companies represented in South Africa (either through local representatives or subsidiary offices) include 3M, Advanced Orthopedics, BSN Medical, BARD, Beckman Coulter, GE Health, Johnson & Johnson, Abbott Labs, Alcon, Medtronic, and many more. U.S. companies new to this market may experience strong competition from U.S. firms or multinationals already established.

Current DemandMedium-term prospects for the medical device industry look promising. The market is expected to grow at a compound annual growth rate of 8.7 percent from 2012 through 2017.The market is extremely price-sensitive. The sophisticated South African medical community is generally interested in new technology developments and products. The South African government is also revamping public hospitals and building new clinics as part of their campaign to introduce and develop national health insurance (NHI).

IMPORT REGULATIONSImporting in South Africa can be rather intimidating with all the rules and regulations that need to be compiled with.

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Whether you have been importing and exporting for a while, or are looking at starting a new venture, there are a few important things that you need to know. We’ll start with the basics.

Registering

The first thing that needs to be established when importing into South Africa is whether you are VAT registered. It is highly recommended that you be VAT registered as you can claim the VAT back as a normal trader. You will also need an importers’ code. You can get this by completing the DA 185 as well as the DA185.4A1 form with SARS. The documents can be downloaded from their website: www.sars.gov.za

Timeframe: Import Export and VAT registration takes 7 to 30 working days.Cost: No cost to register if done in person – Facilitation Companies charge R3,200 to complete the process

Labels on Imported Products

Labels on imported products must be printed in English. The law requires that the information and ingredients must appear in one or more of the official languages. The SABS publish a book which can be obtained directly from them which includes all the regulations that must be adhered to with regard to labelling. You can order it online or it can be posted to you.

Decide on a shipping method

The next step when importing is deciding how to ship to South Africa. There are various shipping methods, namely sea freight, air freight, road freight and rail freight. Sea and air freight are the most common shipping methods when importing into South Africa. Rail freight is often used to transport goods around the country, e.g. to Durban or Johannesburg, as well as containers delivered to the depot. When deciding on a shipping method, the most important factor that comes into play is the time line and the cost. Sea freight from Europe takes around 6 weeks to South Africa and from the Far East around 5 weeks to South Africa. Air Freight takes around 1 week due to clearance, consol flights and customs clearance in South Africa.

Import and export proceduresImport and export control is the function of the International Trade Administration Commission of South Africa (ITAC).

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http://www.sars.gov.za/


Import permitsMost goods may be imported into South Africa without restriction. However, the importation of certain goods specified by government notice is only permitted subject to the issuance of an import permit. All second-hand goods, including waste and scrap of whatever nature, require an import permit. For goods subject to restriction, importers must be in possession of the required permit before the goods are shipped.ITAC controls the issuing of permits. Additional and prior authorization may be required from other departments with jurisdiction over the control of the goods in question. The permit can be acquired within three days, depending on the nature of the application. For a complete list of goods currently subject to import control, an importer should approach the ITAC. There is no fee applicable. Permits are valid for 12 months from date of issue.Applications should be filed at least two weeks prior to the date of shipment in order to ensure approval in time for shipment.

Once you have registered as an importer to South Africa, you need to determine the costs involved. This is where your shipping method and Incoterm decisions come into play.

There are various shipping methods, such as Sea freight, Air freight, Road freight and Rail freight, and each has its own costs and timeline factors. The most common forms of shipping methods are Sea and Air freight.

Sea Freight

Sea freight is the most economic form of transportation when using the containers capacity efficiently.

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Transit times to South Africa need to be considered with this shipping method. When shipping an LCL (Less than Container Load) it usually takes longer than a FCL (Full Container Load). Transhipments also often occur when containers are transferred onto another ship along the route, versus direct sailing. An important term to become familiar with is Twenty-foot equivalent units. This is how container capacity is measured. TEU = 6m container. 1 X 40″ FCL = 2 TEU’s. Container and seal numbers are used to identify your cargo, and this information is usually given on the bill of lading. A seal is used to ensure that the container is not opened from the supplier’s warehouse until delivery to your premises or chosen address, and is also used to identify the shipping line. The only time of opening is for a customs inspection.

There are various container types and sizes, but the most common containers are:

Standard containers – These are widely used dry / general purpose containers and are found in 20’ and 40’ sizes.

High Cubes – In South Africa, these are usually 40’ containers that are taller than the standard containers.

Reefer containers – This refers to refrigerated containers that are often used for fresh produce and temperature controlled items.

Charges involved with Sea Freight

PER CONTAINER

Freight: This is charged to the Service Provider by the shipping line – you can get valid rates for a month and if you ship regularly you can become a named account.

BAF – Bunker adjustment factor: This charge is for fuel and oils and continually fluctuates.

CAF – Currency adjustment factor: This is paid in one currency and monies earned in another %.

War Surcharge: Also known as a Piracy Risk Surcharge, for example when sailing passed Somalia. This is charged due to the high risk of vessels passing that area.

Port Congestion Surcharge: Idle time for vessels in port.

Peak Season Surcharge: Usually charged at times when shipping activities are at a high level which leads to a greater demand in shipping / containers required over the period.

PER WEIGHT MEASURE (BASED ON LCL DETAILS)

Per weight measure can be calculated using cubic metres or weight – whichever is greater.

Freight and BAF: Charged by the co loader based on the container utilisation.

Air Freight

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This is a popular way to ship and the reason for the increase in air freights is the growing volume of technology-based products which are becoming lighter, with greater value. This justifies the expense of air freight.

There is also an increasing trend towards ‘Just-in-time’ (JIT) inventories, hence the use of air freight in order to make this possible. Most air freight shipments are done on an Ex Works basis. The loading and stowing of cargo is done by the airline – details of dimensions and weight is provided to the airline on booking to ensure space and packing configurations. Some airlines have height restrictions and your service provider can provide you with these details. Consolidation is usually done by your forwarder to ship it via air at a discounted or cheaper rate.

Charges involved with Air Freight

Pick up charges, Clearance charges, Air freight, Fuel surcharge, Security surcharge, Local charges, Clearance, Cartage, Airline handling Fee and Airline split fee. The airline’s split fee is charged per parcel.

Air freight calculations: Airlines that are members of the International Air Transport Association (IATA) are bound by their membership to comply with tariffs issued by IATA. However since 11th September 2002, airfreight rates are now extremely negotiable. Airfreight rates cover transportation from the airport of loading to the airport of discharge in South Africa.

THESE RATES DO NOT INCLUDE THE FOLLOWING:

Collection of air cargo from the consignor’s/exporters premises (EXW Charges) Delivery of cargo from the airport of destination to the consignee’s premises (Local

Charges) Storage of cargo before or after loading (Local Charges) Customs clearance in the country of destination – usually done by your clearing agent Any duties and taxes that may have to be paid – paid by your clearing agent and they in

turn invoice you Insurance – this can be arranged by your service provider

Chargeable/volumetric weight: The minimum chargeable weight is 45kg’s. Anything lower than that is subject to minimums. The dimensions are calculated as follows: [(l) X (b) x (h) cm]/ 6000. This gives you the chargeable weight measure and your charges will be calculated on whichever is greater – chargeable weight measure or actual weight. It is important to note that:

There is a basic minimum charge per shipment. The minimum is usually 45 kg’s. The general cargo rates that are quoted for are per kilogram. This rate applies without

reference to the nature or description of the parcel which is to be freighted. Specific commodity rates apply to certain goods of specific descriptions, such as fresh

produce. Rates will be different for each variation of cargo and is usually on a sliding scale, your service provider will be able to give more accurate details.

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http://www.iata.org/index.htm

http://www.iata.org/index.htm


Inland Transport: A common mistake is to pay no attention as to how your goods will arrive at your warehouse / property / door. Inland transport costs are by no means included in you freight costs. Collections from the port are not only ill advised but in most cases not permitted - some of the reasons are as follows:

Lack of proper registrations to enter ports Lack of knowledge as to procedures lead to hold ups and extra charges Collections can take hours and even days leading to massive standing time Registered truckers / carriers are fully aware of all procedures and hold ups that can

occur. Collections almost always inadvertently cost you more in penalties than originally quoted

by registered carriers.

Importing documents

We suggest that you have all the required documentation before submitting to your clearing agent to ensure that it all goes smoothly. We also recommend having literature (which are pictures, descriptions and compositions of the items) to ensure that any query with South African customs is resolved quickly. Being prepared means no unnecessary additional costs.

Your customs documentation must be kept for a 5 year period as customs can at any time do an audit on your South African imports to ensure the correct import tariff headings were used. We suggest that you ensure that you give your service providers / clearing agents the required documentation within 10 days of shipping to South Africa to ensure that it is pre-cleared by customs before arrival and if there are any queries by customs this can be resolved before arrival into South Africa so as to avoid any unnecessary storage charges.

Customs clearance proceduresThe clearance of imported goods generally takes a maximum of 24 hours for airfreight and two to three days for sea freight, depending on the port of entry. All required documentation must be submitted to Customs and Excise before goods can be cleared through Customs.Most transactions are covered by a Bill of Entry (Form SAD500).Other required documentation includes:• Commercial invoice.• Prescribed certificate of origin when preferential duty rates are claimed.• Negotiable copy of bill of lading or equivalent document.• Import permit, if required.• Rebate permit 470.03 (if applicable) for raw materials to be processed and re-exported.• Payment, by a bank guaranteed check, for all applicable duties and taxes (incl. VAT), if not qualified for a deferment.

Import shipments may be cleared through Customs prior to the goods arriving at a South African port. As of January 2012, foreign persons who are not registered or do not have a physical address in SA have been required to appoint a registered agent, who is located in SA, when applying to register with the South African Customs authorities as an importer, exporter or licensed remover.

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In order to avoid unnecessary delays, HSI or its appointed SA agent may wish to submit an application for a tariff determination for products where the tariff heading is unknown or under dispute. These can be acquired from the Commissioner in Pretoria (submitted through the relevant branch office).

In the case of sea freight, once customs has been cleared, the importer must pay dues to Harbor Revenue, and receive a wharfage order. The importer then pays the operator and receives a release. At this point, the importer can go to the terminal and collect his goods. Sexy Pandas International strongly recommends HSI use a freight forwarder as a registered import agent. One key reason for this is that the import process has become a fully automated process since July 2009. SARS enforces the use of Electronic Data Interchange systems (EDI) for the submission of medical devices import declarations and reports and small importer don’t typically have the infrastructure to use EDI.

Since the Customs process is paperless, clearing Customs is simpler. Straight-forward commercial entries pose little problem. Problems may arise when you deal with an individual Customs officer, as no two will interpret a situation the same. An effort is made to limit contact with Customs officers, to minimize potential deceptive practices. As with most government departments, bureaucracy prevails and nothing is ever simple. There is not much difference between Air and Sea shipments when dealing with customs.

Freight forwarders commonly apply for all licenses and registration numbers. They can apply for tariff determinations and provide assistance in properly classifying goods. Through the use of technology, they can clear goods quicker than an individual investor, and provide inland transport for the goods to reach the investor. Freight forwarders can also assist in accurately costing a product. They are able to give a pre-shipment landed cost per item, that will enable HSI to make better and more informed buying decisions. The minimum information required for an estimate is the item, unit price, quantity, volume or weight, product description, incoterm, expected port of loading and final destination. HSI can then make buying decisions based on the estimate of the total landed cost. For more information, contact the South African Association of Freight Forwarders (SAAFF) for more advice with regard to clearing agents. Call +27 11 455 1726, email: [email protected] or visit www.saaff.org.za/contact/default.aspx

Deferment of payment schemeA deferment scheme is available to qualified importers that allow the deferment of applicable import duties, and VAT. Payment is generally deferred for 30 days with seven days to settle the account. No locally manufactured goods, (duties and levies) may be deferred under this scheme. To apply for deferment, importers may apply to the local Customs Controller.Required documentation includes:• Application for deferment.• Statement of income.• Balance sheet.The local controller will make its recommendation to the Commissioner. Following approval, the applicant will be required to submit additional documentation, including a signed agreement and any required surety bond.

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Duty drawback schemeA duty drawback scheme provides refunds for import duties paid on materials used in the production of goods exported. Manufacturers may apply for refunds after the final product is exported. Manufacturers must provide proper documentation to reconcile imported materials with exports.

Bonded warehousesSecure bonded warehouse facilities are available at all points of entry and may be used to store imported goods without payment of duties until required for use, resale, or re-export.Goods withdrawn from a bonded warehouse are liable for the duty applicable only if cleared out of bond for home consumption. Goods may be stored for no more than two years. However, the new customs legislation proposed a reduced storage period of 12 months only (i.e. one year).

You can contact South African customs in Cape Town for more information by calling +27 21 413 6733

MEDICAL DEVICES IMPORT REGULATIONS

South Africa does not have a comprehensive system of medical device regulation. Unlike many other health care systems around the globe, medical products in South Africa which do not have a pharmaceutical component to not need to be registered. Electromagnetic medical devices (or radiation emitting devices), must also be registered with the Department of Health, and must have the CE mark. As the HME devices HIS wished to export to South Africa are not electro-medical products and do not contain a pharmaceutical component, no license or registration is currently necessary.

However, that is in the process of changing and it is strongly advisable that the product be FDA approved or even better, carry the EC mark. Indeed, the South African Department of Health is currently in the process of finalizing the policy documents and has made a draft policy document available on their website for comments on 22 April 2014.

Based on the new policy, FDA approved only medical devices will no longer be acceptable. There are national plans to reform the regulatory authority in South Africa by dismantling the Medicines Control Council and replace it with the South African Health Products RegulatoryAuthority (SAHPRA), which will report to the Ministry of Health. SAHPRA will regulate all health related products—including devices, which are currently not regulated (excepting electro-medical and combination-devices). Devices will need to carry the CE mark. FDA approved only devices will not be acceptable.

At present, combination devices—devices that have a pharmaceutical attached to them are regulated by the Medicines Control Council (MCC). This is a lengthy, complicated process with wait times of 48 months or more, before the product comes to market.

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It is unlawful for medical devices to be marketed, manufactured, distributed and sold or supplied in South Africa except with the proper authorization, registration certificates, licenses, clinical trial approvals or exemptions obtained from the Medicines Control Council.

If imported into South Africa from a foreign manufacturer – including US manufacturers -, a license is awarded to an importer acting as the agent of the manufacturer, the importer being a natural or juristic person. If a natural person, the importer must be a permanent resident of South Africa. The importer may be foreign juristic person, but the foreign juristic person must be permanently represented in South Africa. A written mandate from the manufacturer appointing the importer as agent must accompany the application for the license. If the agency is transferred the new agent must apply for a new license. The obligations of distributors of medical devices are specifically regulated in terms of the license granted under Regulation 19 to the Medicines and Related Substances Act.

DISTRIBUTION CHANNELSOne of the first steps that an exporter may wish to take in locating an agent or distributor in South Africa is to contact the U.S. Commercial Service in South Africa and register for one of the services specifically designed to meet the needs of U.S. client companies. South Africa offers foreign suppliers a wide variety of methods to distribute and sell their products, including using an agent (also known as a Commission Sales Representative, or CSR) or distributor.

In South Africa, the terms “Agent” and “Distributor” have a very specific meaning: “agents” work on a commission basis after obtaining orders from customers; distributors buy, carry stock and sell products directly to customers.

Agents often distribute durable and non-durable consumer goods, as well as some industrial raw materials. They may be particularly appropriate when products are highly competitive and lack a large market. It is common to appoint a single agent capable of providing national coverage either through one office or a network of branch offices. In addition to their role as the local representatives of US exporters, agents should be able to handle the necessary customs clearances, port and rail charges, documentation, warehousing, and financing arrangements.

Local agents representing foreign companies who export goods to South Africa, are fully liable, under South African import law, for all regulations and controls which are imposed on the foreign exporters. Local agents are required to register with the Director of Import and Export Control of the Department of Trade and Industry. It is important for a US exporter to maintain close contact with the local agent to track changes in importing procedures and to ensure that the agent is effectively representing the sales interest of the exporter.

Typical commission rates for agents depend upon the contract concluded and upon the representative’s responsibility. These rates can range from 3 to 25 percent commission per concluded transaction. Companies sometimes pay a retainer fee plus costs plus an incentive scale on deals.

Distributors who buy for their ow account and carry a wide range of spare parts often handle capital equipment and commodities such as chemicals, pharmaceuticals, and brand new products

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on an exclusive basis. Leading distributors often have branches throughout South Africa and sell to both wholesalers and retailers. In some cases, the distributor is also the principal with sub-agents or as a major user of the products.

When appointing a South African distributor, US exporters should take care to find out if the distributor handles a competing product. In some instances, major South African corporations whose holding companies market products competing directly with American products have approached some US exporters.

In South Africa’s competitive marketplace, it is essential that he US exporter provide adequate servicing, spare parts, and components, as well as qualified personnel capable of handling service inquiries. In most cases, after-sales service should be available locally since potential delays often lead purchasers to seek alternative suppliers.

The US commercial service has found that the most successful ventures entered into by US companies have been preceded by thorough market research. This is an important first step before engaging in a search for agents or distributors. Once contacts are established, US companies should visit South Africa since first-hand knowledge of the market and society is an advantage. Such a visit provides an opportunity for a personal appraisal of the prospective agent or distributor. US exporters should carefully investigate the reputation and financial references of a potential agent or distributor and establish a clear agreement delineating the responsibilities of both the exporter and the agent.

The Africa Health trade show is a good entry point and any new entrant into the South African market should plan to attend. Africa Health is the continent’s largest healthcare exhibition and is the leading platform for the industry to meet, learn and do business. The next edition of the exhibition will take place 8 -10 June 2016 at the Gallagher Centre, Johannesburg. The exhibition is expected to attract more than 7000 healthcare professionals and host 500 of the world’s leading healthcare suppliers, manufacturers and service providers including medical device agents & distributors.

In addition, the US commercial service in South Africa offers a number of business facilitation services, including market research, appointment-setting, and background checks on potential service partners.

Typically, distribution is done through local agents and distributors. In South Africa, there is a distinction between an agent and a distributor. The agent orders the product on ad-hoc basis and generally works on a commission basis. The distributor will usually have a larger stocking capacity and enters into a formal agreement with the manufacturer. Some will only carry a specific brand name and become a subsidiary, e.g. Bayer (Pty) Ltd South Africa. Others may carry a string of non-competing products from different manufacturers. Most potential distributors with a national sales territory will prefer to have exclusive arrangements with the original manufacturer. It is important to ensure that local distributors have maintenance and after-sales repair capabilities, and train staff regularly.

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Please note that the South African standard for electrical voltage is 220 volts, as opposed to the US standard of 110.

A judicious selection of one of three low-risk entry strategies (representation, agency, or distributorship) is required by new-to-market entities. If you are selling to the government or to government-funded organizations, any local partner should be B-BBEE compliant and be aware of local procurement regulations.

SOUTH AFRICA AGENTS & DISTRIBUTORSSexy Pandas International identified the following agents and distributors:

Medical Equipment and Supplies Agents

There are several types of medical supplies sales agents in South Africa. Given the type of product HSI wishes to sell, the most appropriate category are surgical/medical representatives. These representatives sell anything, from bandages, swabs, needles, catheters, ET (endotracheal tubes) and sutures to theatre tables, lights and cameras. They spend a great deal of their time in private or state hospitals, sometimes in theatre with various surgeons. These representatives typically know theatre protocol and are able to guide the surgeon through the use of a new product.

There’s a very large number of qualified medical supplies agents available in South Africa. HSI can obtain names and contact information for qualified individual agents for its products through the following advanced search on linkedin:

https://www.linkedin.com/vsearch/p?keywords=medical%20devices&title=medical%20representative&openAdvancedForm=true&titleScope=CP&locationType=I&countryCode=za&rsid=233196891449351007603&orig=ADVS

Sexy Pandas International recommends contacting those agents with experience working for reputable US companies such as 3M or Johnson & Johnson. Further, many of these agents have specialized experience in a particular medical area – As such, Sexy Pandas international recommends choosing an agent with experience in respiratory medical devices as these candidates are likely to have contacts in relevant hospital departments and be familiar with local procurement regulations. Finally, HSI should require that any agent be licensed to serve as a representative for a foreign manufacturer in addition to having a license to distribute medical devices.

To avoid recruiting the wrong person, Sexy Pandas international recommends using a south African recruitment agency specialized in the medical professions such as Eta Lyons (http://www.etalyons.co.za) or Glasshouse Recruiting (http://www.glasshouserecruiting.co.za) or MedSearch (www.medsearch.co.za).

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http://www.medsearch.co.za/

http://www.glasshouserecruiting.co.za/

http://www.etalyons.co.za/





Medical Equipment and Supplies Distributors

There’s a large number of specialized medical device distributors in South Africa. Below is a list of reputable distributors who currently serve large US medical device manufacturers. AFROX Ltd.23 Webber Street,SelbyJohannesburgTelephone: 27 11 456 3702Email: [email protected] Person: Nair Neville

Eastcape X-Ray cc.67 Mangold Street Newton Park,6055,Port ElizabethEmail: [email protected] Person: Brian Tapson

Glenmed42 Clyde Avenue, Musgrave,4001,1656, Westville 3630,DurbanTelephone: +27 31 202 4115Contact Person: Glenn W. Stryke

Medsci978 Veda Road, Shop 8, Ettienne Lewis Centre,Montana Park X72,0031,24587,Gezina, PretoriaTelephone: +27 0 12 756 4333/4Fax: +27 86 671 9094Contact Person: NeelsLoggenberg

Sikilela Medical & Dental Supplies cc.401 Barclay Square, 296 Walker St.,0132,30235,SunnysideContact Person: NondumisoMzizana

Ysterplaat Medical Supplies (Pty) Ltd.Address: 3 Twickenham Park, Marconi Road, Somerset WestTelephone: + 27 21 551 0838Contact Person: Alan Tucker

Stat - Tiakeni MedicalElsecar Street, Unit 41 APD Industrial Park, Kya Sands, 2162

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Telephone: +27(11)708 6363Contact Person: Simon [email protected]

Sabio Medical Distinctive Devices20 & 22 Golf Course Road, Sybrand Park, Rondebosch, 7700Telephone: +27 21 697 9600Contact Person: Neil Venter

Tecmed AfricaErand Gardens Midrand PO Box: 4229 Halfway House, 1685 Telephone: +27 11 653 [email protected]

Grobir Medical Suppliers1 Harris Road, Off Klipfontein Road, Rondebosch, Cape Town, 7000Telephone: +27 21 658 7140

Marcus Medical121 Gazelle Avenue, Corporate Park South, MidrandTelephone: +27 11 314 0503E-mail: [email protected]

Pharmed31 Imvubu Park Close, Riverhorse Valley, 4051Telephone: 031 571 2800Contact Person: Mr. Yusuf Vahed

Stel+Med8 Hoep-HoepStr, Onderpapegaaiberg, Stellenbosch, 7600 Telephone: +27 (0) 21 886 9313 OR +27 (0) 21 886 9390

SSEM Mthembu Medical (Pty) Ltd73 5th Street, Wynberg, Johannesburg.Telephone: (011) 430-7000E MAIL: [email protected]

Given the intricacies of the South African Market, including need for a distribution license as well as the ability to market HSI’s product to public hospitals, Sexy Pandas International recommends using a distributor rather than an agent. The South African Distributors listed above are knowledgeable of the regulations and are able to distribute the product throughout South Africa rather than being limited to a specific urban area or region. Further, given the necessity to have training, maintenance, and after-sales repair capabilities. HSI should also ensure that the chosen distributor does not himself manufacture or carry competing products from different manufacturers. Based on all these criteria, Sexy Pandas recommends Stat - Tiakeni Medical as HSI’s distributor.

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mailto:[email protected]





SUMMARY TIMELINE & COSTSAccording to the World Bank report on Ease of doing Business in South Africa, the total time required for imports documentary compliance is 36 hours – the total cost of documentary compliance for imports is USD123 (this includes the time and cost for obtaining documents, preparing documents, processing documents, presenting documents, and submitting documents)

Import Controls for HSI products (HME and HMEF devices) in South Africa

Product Harmonized System Classification of Goods: 9020.00Description:Other breathing appliances and gas masks Customs duties: FREE

VAT: 14% OF (FOB VALUE + DUTY + EXCISE + FUEL TAX + 10% OF FOB VALUE)

Cargo Dues: Note: Cargo dues may be applicable for various commodities / categories, when imported as (1) Break bulk - Ranging from ZAR 8.43 to 143.64 per ton (2) Bulk (dry) - Ranging from ZAR 5.93 to 67.61 per ton (3) Bulk (liquid) - Ranging from ZAR 6.62 to 67.61 per kiloliter (4) Motor Vehicles - A maximum of ZAR 236.60, and (5) Containers - Ranging from ZAR 82.84 to 5003.68 based on dimensions, as per the schedules of National Port Authorities. Vat @ 14% may apply extra on Cargo dues.

Tariff Rate Quota No Tariff Rate Quota applies

ADD/CVD No ADD/CVD applies

Absolute Quotas No Absolute Quota applies

License Requirements None required

Notes All wood packaging material entering into South Africa shall be treated and marked in accordance with ISPM 15. Wood packaging material will be inspected at ports of entry for compliance with ISPM 15 and should any infestation be found it will be treated on expense of the importer or re-exported to the exporting country or disposed of in a manner determined by the National Plant Protection Organization of South Africa (NPPO) as published by Department of Agriculture

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Terminal Charges 20' 40'ISPS - Terminal Security Surcharge

USD 13.00 USD 13.00

Terminal Handling Charge - Reefer Container

ZAR 2097.00 ZAR 3112.00

Terminal Handling Charge - Hazardous Container

ZAR 2052.00 ZAR 3050.00

Terminal Handling Charge - Out of Gauge Container

ZAR 2052.00 ZAR 3050.00

Terminal Handling Charge - Empty Container

ZAR 1312.00 ZAR 1939.00

Terminal Handling Charge - Dry Container

ZAR 1471.00 ZAR 2172.00

Terminal Handling Charge - Hazardous Reefer Container

ZAR 2678.00 ZAR 3990.00

Storage Charges 20' 40'FIRST DAY Dry Van ZAR 2048.00 ZAR 3478.00Reefer ZAR 3050.00 ZAR 5443.00Out of Gauge ZAR 3050.00 ZAR 5443.00Hazardous Cargo ZAR 2560.00 ZAR 4346.00Shipper Owned Container ZAR 1950.00 ZAR 3200.00THEREAFTER Dry Van ZAR 490.00 ZAR 970.00Reefer ZAR 2190.00 ZAR 3650.00Out of Gauge ZAR 2150.00 ZAR 3600.00Hazardous Cargo ZAR 560.00 ZAR 1120.00Shipper Owned Container ZAR 250.00 ZAR 500.00

Container Rent (Demurrage and Detention)Effective from April 1, 2015 until March 31, 2016

Demurrage starts after all vessel discharge / Demurrage starts on day after discharge / exclude from free days, public holidays are included.

Applies to: While in port and with customerContainer Size Type

Free Days 1st Period 1st Rate Thereafter Rate

20DV 5 Calendar Days 10 Days USD 38.00 USD 60.0040DV 5 Calendar Days 10 Days USD 76.00 USD 120.0040HC 5 Calendar Days 10 Days USD 76.00 USD 120.0020SP 5 Calendar Days 10 Days USD 70.00 USD 120.0040SP 5 Calendar Days 10 Days USD 140.00 USD 240.00

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20RE 4 Working Days 10 Days USD 70.00 USD 120.0040RE 4 Working Days 10 Days USD 140.00 USD 240.0040HR 4 Working Days 10 Days USD 140.00 USD 240.00

REFERENCES

South Africa Regulations, 03/07/14, CMA-CGM, DELMASGRAEBEL country profile: South Africahttp://www.doingbusiness.org/data/exploreeconomies/south-africa/#trading-across-bordershttp://tradelogistics.co.za/customs/http://www.entrepreneurmag.co.za/ask-entrepreneur/import-export-ask-entrepreneur/im-starting-an-importing-business-what-are-the-importing-terms-and-documents-involved/http://www.joskezfreight.co.za/index.php/sars-newsDeloitte’s Research to guide the development of strategy for the Medical Devices Sector of South AfricaWesgro Cape Town and Western Cape Research Document on Medical Devices Sector from http://wesgro.co.za/publicationsSouth Africa’s Medicine Control Council (MCC) General Guideline Medical Device IVD Aug14 v1 for comment.docx Sept 2014Doing Business in South Africa - 2015 Country Commercial Guide for U.S. CompaniesLinkedin.comImport customs procedures in South Africa from https://en.santandertrade.com/international-shipments/south-africa/customs-procedures?&actualiser_id_banque=oui&id_banque=18&memoriser_choix=memoriserLEX Mundi Publication on Medical Devices SOUTH AFRICA by Bowman Gilfillan, 2011

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https://en.santandertrade.com/international-shipments/south-africa/customs-procedures?&actualiser_id_banque=oui&id_banque=18&memoriser_choix=memoriser



http://wesgro.co.za/publications

http://www.joskezfreight.co.za/index.php/sars-news

http://www.entrepreneurmag.co.za/ask-entrepreneur/import-export-ask-entrepreneur/im-starting-an-importing-business-what-are-the-importing-terms-and-documents-involved/

http://www.entrepreneurmag.co.za/ask-entrepreneur/import-export-ask-entrepreneur/im-starting-an-importing-business-what-are-the-importing-terms-and-documents-involved/

http://tradelogistics.co.za/customs/

http://www.doingbusiness.org/data/exploreeconomies/south-africa/#trading-across-borders

report on importing to south africa

Documents