south africa’s trade & investment … africa’s trade & investment south africa’s...

SOUTH AFRICA’S SOUTH AFRICA’S TRADE & INVESTMENT TRADE & INVESTMENT

SOUTH AFRICA’S INVESTMENT ENVIRONMENTSOUTH AFRICA’S INVESTMENT ENVIRONMENT

TRADE & INVESTMENT TRADE & INVESTMENT ENVIRONMENTENVIRONMENT

SOUTH AFRICA’S INVESTMENT ENVIRONMENTSOUTH AFRICA’S INVESTMENT ENVIRONMENT

TRADE AND INVESTMENTSOUTH AFRICA

PRESENTED BY MS SEEMA SARDHASOUTH AFRICA

A division of the Department of Trade and Industry

CONSULATE GENERAL OF THE REPUBLIC OF SOUTH AFRICA

November 2005

SOUTH AFRICA AT A GLANCESOUTH AFRICA AT A GLANCE

•Head of State: President Jacob Zuma•Area 1,219, 090 km2

•Population 50.6m•11 Official languages with English the business language•Total GDP: USD 422 billion (2011)•GDP 2010 per capita: USD 11000 billion p p•Real GDP Growth: 3.4%•GDP Composition by sector: Agriculture: 2.5%

Industry: 31.6%Services: 65.9%

•Main Exports: minerals & mineral products, precious metals & metal products, machinery, automotives & ComponentsMain Imports: Machinery Transport Equipment oilMain Imports: Machinery, Transport Equipment, oil,Chemicals, manufactured goods•Main trading partners:China, US, Japan, Germany, UK

Strategic Location on Shipping RoutesStrategic Location on Shipping Routes

• South – South Trade• Important to the BRICS countries • Important to the BRICS countries

Economic AchievementsEconomic Achievements

• In 2011, at 5.5%, South African interest rates were at a 30-year low.

• The JSE Securities Exchange one of the world’s top 20 exchanges.

• 1st for the regulation of securities exchange, strength of auditing & reporting standards by Global Competitiveness Report 2010reporting standards by Global Competitiveness Report 2010.

• 1st out of 60 countries in the Economist’s House Price index for the period 1997 – 2009.

• The South African Rand was the 2nd best performing currency against the US Dollar between 2007 and 2011, in Bloomberg’s Currency Scorecard.Scorecard.

Source: SouthAfrica.info


• The South African stock market rose 16.09% in 2010, ranking 8th out of the G20 nations and ahead of all of the G7 countries

• 34th out of 183 countries in the World Bank Ease of Doing Business 2011

• 2nd in the ease of getting credit

• 2nd for good practice in protecting both borrowers and lenders

• 10th in investor protection10 in investor protection

• 54th out of 139 countries in the World Economic Forum’s Global Competitiveness Index.

• 9th in financial market development

• 27th in the protection of intellectual property


• 54th out of 173 countries in the Transparency International Corruption Perception Index 2010

• South Africa is a world leader in coal-based synthesis and gas-to-liquid technologies.

It is among the lowest cost producers of ethylene and propylene in the • It is among the lowest-cost producers of ethylene and propylene in the world, thanks to abundant access to low-grade coal and leading-edge process technology.

• Sasol has flown the world’s first passenger aircraft using the company’s own-developed and internationally approved 100% synthetic jet fuel. Sasol took to the skies with the world’s first fully synthetic jet fuel flight on Tuesday 21st of September 2010Tuesday, 21st of September 2010.

South Africa’s Tops the BRICS for Ease of Doing BusinessSouth Africa’s Tops the BRICS for Ease of Doing Business

Country Overall Rank Getting credit Protecting investors

South Africa 34 2 10

China 79 65 93

Russia 123 89 93

Brazil 127 89 74Brazil 127 89 74

India 134 33 44

Source: World Bank Group, 2011

South African Exports 2010 – top 10 South African Imports 2010 – top 10

South Africa’s leading trade partnersSouth Africa’s leading trade partnersSouth African Exports 2010 – top 10

R a n k2010

CountryName

Proportion% Total

Growth2009 - 2010

1 China 11.48% 20.28%

South African Imports 2010 – top 10

R a n k2010

CountryName

Proportion% Total

Growth2009 - 2010

1 China 16.89% 14.22%

2 United States 10.08% 25.26%

3 Japan 9.08% 36.42%

2 Germany 5.45% 11.35%

3 United States 0.93% 7.14%

4 Germany 8.34% 31.49%

5 United Kingdom 5.13% 4.20%

6 India 4.36% 24.23%

4 Japan 17.01% 5.34%

5 Saudi Arabia -11.01% 4.12%

6 Iran 4.04% 4.00%6 India 4.36% 24.23%

7 Netherlands 3.35% -7.15%

8 Switzerland 3.28% -21.29%

7 United Kingdom 2.30% 3.81%

8 India 33.92% 3.58%

9 Zimbabwe 2.93% 12.53%

10 Mozambique 2.68% 5.53%

9 France 1.58% 2.93%

10 Nigeria 3.10% 2.80%

Source: Quantec, 2011

South Africa’s export compositionSouth Africa’s export composition

R a n k Product Proportion Growth

2010 Name %Total 2009-20102010 Name %Total 2009 2010

1 Basic non-ferrous metals 39.40% 43.19%

2 Basic iron & steel 13.02% 23.75%

3 Motor vehicles, parts & accessories 10.27% 9.19%

4 Machinery & equipment 7.03% 9.91%

5 Basic chemicals 5.73% 11.34%

6 Food 3.67% 4.03%

7 Other industries 3.39% -2.13%

8 Coke & refined petroleum products 2 55% -8 67%8 Coke & refined petroleum products 2.55% -8.67%

9 Paper & paper products 2.24% 8.03%

10 Other chemicals & man-made fibers 1.95% -3.70%


South Africa’s leading investment partnersSouth Africa’s leading investment partners

Investment in South Africa – top 10

Rank Source Proportion %

Investment from South Africa – top 10

Rank Country Proportion %Country

1 France 22.58%

2 Australia 21.42%

Rank Country Proportion %1 Nigeria 47.35%

2 Australia 15.07%

3 Switzerland 14.59%

4 United States 13.27%

5 China 6.73%

3 Tanzania 9.93%

4 Uganda 9.75%

5 Zimbabwe 4.49%5 China 6.73%

6 Germany 6.69%

7 Belgium 4.34%

5 Zimbabwe 4.49%

6 Namibia 4.23%

7 UK 1.52%8 United

Kingdom3.24%

9 India 2.38%

10 Luxembourg 1 66%

8 Ghana 1.18%

9 China 1.17%

10 United States 0 91%10 Luxembourg 1.66% 10 United States 0.91%


Investment Composition within South AfricaInvestment Composition within South Africa

Rank Sector Proportion %

1 Metals 22.87%1 Metals 22.87%

2 Automotive OEM 14.42%

3 Alternative/Renewable energy 13.65%

4 Coal, Oil and Natural Gas 12.81%

5 Communications 8.78%

6 Hotels & Tourism 4.40%

7 Building & Construction Materials 3.75%

8 Transportation 3.29%

9 Financial Services 1 97%9 Financial Services 1.97%

10 Engines & Turbines 1.94%


South Africa’s investment environmentSouth Africa’s investment environment

South Africa today is one of the most sophisticated and promising emerging South Africa today is one of the most sophisticated and promising emerging markets globally, mainly because of …markets globally, mainly because of …

Political & economic stability with sound

macro economic

Abundantnatural

resources macro-economic management

CompetitiveExcellent

transport &

resources

Competitive sectors/industries

plogistical

infrastructure

f

Skillsavailability

World class financial system

Favourable cost of doing business

Investment OpportunitiesInvestment Opportunities

Sector Sub-sector

Business Process Outsourcing & IT

•Call Centres•Back /office Processingg

Enabled Services •Shared Corporate Services•Enterprise solutions e.g. fleet management and asset management•Legal process outsourcing

Electro Technical •Software & mobile applications•Smart metering•Embedded software•Radio frequency identification•Process control , measurement & instrumentation•Security & monitoring solutions•Security & monitoring solutions•Financial software

Clothing, Textiles, Leather and Footwear

•Manufacturing of Industrial Textiles using Polyester•Production of other natural fibre textiles such as flax

Footwear •Wool and mohair production – downstream opportunities for yarns, knitwear and fabric.

Investment OpportunitiesInvestment OpportunitiesSector Sub-sector

Agro-processing Fisheries and aquaculture i.e. freshwater aquaculture & marincultureFood processing in the milling and baking industriesBeverages viz. fruit juices and the local beneficiation, packaging and export ofi dig tindigenous teasHigh value natural fibres viz., organic cotton & downstream mohair production High value organic food for the local and export marketBiofuels production viz. biodiesel & bioethanol

Automotives & Components

Engine parts/components, vehicle interiors, electronic drive train components, body parts, catalytic converters, aluminum forgings & castings, diesel particulate filters and leather products

Ch i l d B fi i i f l l d i i & b ildi dChemicals and plastic fabrication

Beneficiation of polypropylene used in automotive components & building andconstruction industries, packaging materials Medical (drips & syringes), manufacture of active pharmaceutical ingredient(APIs) for key anti-retrovirals (ARVs)Manufacture of reagents for AIDS/HIV diagnosticsProduction of vaccines and biological medicines

Investment OpportunitiesInvestment OpportunitiesSector Sub-sector

Metal fabrication, capital and transport

•Downstream processing and value adding of iron, steel, aluminium, stainless steel ferroalloys and the platinum group of metals (PGM)• Conversion processes of metal products i.e. metal fabrication, pipe & tube,

equipment p p , p p ,

foundry products, wire and jewellery

•Manufacturing and assembly of mining, agricultural and construction equipment•Utilities i.e. reticulation plants and pipe lines.p p p•Machine tools and tooling (auto, packaging, mining and aerospace industries) •Electrical motors•Services in the engineering, construction sectorsg g,•Rolling stock i.e. locomotives, wagons and coaches•Production of permanent ways i.e. railway lines, signalling equipment, electrification, bridges and stations•Harbour construction and equipmentq p•Ship- and oil platform building and maintenance

Sector Sub-sector

Investment OpportunitiesInvestment OpportunitiesSector Sub sector

Tourism •Accommodation – hotels, boutique hotels, lodges & resorts•Urban integrated tourism/ entertainment precincts •Adventure, - eco-, sport-, conference - and cultural tourism.•Infrastructure development.•Leisure complexes & world class golf courses.•Harbour & waterfront developments.•Transfrontier conservation areas.•Tourism transport – aviation, rail, cruise liners etcTourism transport aviation, rail, cruise liners etc•Green building and green technologies for tourism•Attractions and activity – based tourism•Museums and heritage•Cultural, music, arts festivals and events

Aerospace •Aviation related services, including maintenance, repair and overhaul (MRO)•Rotary and fixed wing components.•Aviation training services•Specialised manufacturing of avionics, including health usage monitoring systemssystems•Aerostructure components, specifically composites and sheet metal (aluminium and titanium)•Small and micro-satellite capability including sensor platforms•Satellite related services (including tracking and control and applications development)development)•Specialised design expertise, systems level as well as first tier level.•Unmanned Arial Vehicles (UAVs)


Power generation and distribution

Independent power generation, energy infrastructure & alternative energy

Renewable energy Solar water heating, evacuated tube plants, concentrated solar heating, gyand energy saving industries

g, p , g,wind and biomass energy production

Advanced Manufacturing

Advanced materials manufacturing viz. N t i l Manufacturing Nano-materials •High performance materials based on natural resources (advanced bio-

composites)•Composites (intelligent textiles used in medical, building and construction i d i )industries)•Continuous fibre reinforced thermoform compositesDigital TV and Set Top Boxes due to migration to full digital television asanalogue will be switched-off by November 2011.Nuclear Build Programme i.e. joint ventures, consortiums and theestablishment of new companies to grow South Africa’s nuclearmanufacturing capability and nuclear supply industry to supply into thenuclear build programme Electricity Demand Side Management Solutions to improve electricity efficiency usage.


Creative and Design Industry Film and MediaFilm studios, treaty film co-production ventures, distribution infrastructure,servicing of foreign productions.Production of film and documentaries, commercials, stills photography andmulti-mediaDesignJewellery manufacturing and designFashion design

National Development PlanNational Development Plan

• SONA 2012-President Zuma announced R860 bn infrastructure plan bn infrastructure plan.

• Transnet Market Demand Strategy-R300bn in capital projectscapital projects

• From the spatial analysis, the country needs, 17 Strategic Integrated Projects (SIPs).g g j ( )

• The SIPs cover a range of economic and social infrastructure. All nine provinces are pcovered, with emphasis on poorer provinces.

IncentivesIncentives

Incentive Benefit Main Conditions

The Enterprise The EIP (manufacturing) is a cash t f l ll b d

the EIP will be used to stimulate i t t ithi f t i g d Investment Program

(EIP)

grant for locally based manufacturers who wish to establish a new production facility, expand an existing facility or upgrade an existing facility in

investment within manufacturing and tourism, it will also be used to deliver on some of the IPAP's key performance areas, as well as priority sectors.or upgrade an existing facility in

the clothing and textiles sectors

p y

Foreign Investment Grant

To compensate qualifying foreigninvestors for the cost of movingqualifying new machinery and

Foreign investors only

qualifying new machinery andequipment from abroad to SA.

Industrial Development Zone

Exemption from VAT when sourcing goods and services from

Prospective IDZ operator companies must apply for permits to develop p sourcing goods and services from

South African customs territory and duty-free imports of raw materials and inputs for export

must apply for permits to develop and operate an IDZ



Section 12i Tax Allowance

Tax deductions of up to R 900m depending on status viz. preferred or qualifying projects.

Training allowance/ deduction of

Valid until December 2015

Capital investment > R 200m

Training allowance/ deduction of up to R30m or R36 000 per employee.

Critical Infrastructure F d

Infrastructure projects intended The minimum qualifying Fund

p jto service IDZ, shall qualify for a grant of 30% of the qualifying infrastructure development cost

q y ginfrastructure development cost is R15m

The Location Film & Television production Incentive

To encourage and attract large budget films and television productions that will contribute towards SA economic development

Foreign owned qualifying productions

and international profile and increase foreign direct investment



BPO & O I BPO & O Investment Incentive

The BPO&O Investment Incentive comprises an Investment Grant and a Training Support Grant towards costs of company-specific training. The incentive is offered t l l d f i i t

Local and foreign investors establishing projects that aim primarily to serve offshore clients

to local and foreign investors

Competitiveness I t

Grants are to be used for the Clothing and Textile companies and Improvement Programme

following interventions:World-class manufacturingprinciples.TrainingLabour relations and employee

clusters

Labour relations and employeewellness programmesProduct relatedSupply chain integrationIndustrial engineering C titi i tCompetitiveness improvementBottom line business processes



P d ti I ti Cl hi fProduction Incentive (PI)

Aims to help the industry upgrade its processes, products and people.

Clothing manufacturersTextiles manufacturersCut, Make and Trim (CMT) operatorsFootwear manufacturersLeather goods manufacturers andLeather goods manufacturers andLeather processors (specifically forleather goods and footwearindustries).

Automotive I t t S h

A taxable cash grant of 20 percent Motor vehicle Investment Scheme (AIS

of the value of qualifyinginvestment in productive assets

assemblers/manufactures.

Motor component manufacturers

C t t C t t D t ilD t ilContact Contact DetailsDetails

Ms Seema SardhaMs Seema Sardha

Consul EconomicConsul Economic

Consulate General of the Republic of South Consulate General of the Republic of South AfricaAfricaAfricaAfrica

Tel: +91 22 2351 3725Tel: +91 22 2351 3725

Fax: +91 22 2352 1158Fax: +91 22 2352 1158Fax: +91 22 2352 1158Fax: +91 22 2352 1158

EE--mail: [email protected]: [email protected]

WebsiteWebsite: : www.thedti.gov.zawww.thedti.gov.za

Thank YouThank You

south africa’s trade & investment … africa’s trade & investment south africa’s...

Documents