Post on 20-Jan-2016
SOUTH AFRICAOPEN FOR BUSINESS
BUSINESS BUSINESS
OPPORTUNITIESOPPORTUNITIES
Tumelo Nkoane
11 July 2007
emita
PRESENTATION
OUTLINE
Macro-economic Trends
Gateway to Africa
Sectoral Opportunities
South Africa has a stable macro economic environment, a
strong fiscal position and a range of growing sectors – from
this platform SA is gearing for accelerated growth
SA is a springboard for companies wanting to do business
in Africa
Key Messages
-2.0
0
2.0
4.0
6.0
8.0
1998
Q1 Q2 Q3 Q4
1999
Q1 Q2 Q3 Q4
2000
Q1 Q2 Q3 Q4
2001
Q1 Q2 Q3 Q4
2002
Q1 Q2 Q3 Q4
2003
Q1 Q2 Q3 Q4
2004
Q1 Q2 Q3 Q4
2005
Q1 Q2 Q3 Q4
2006
Q1 Q2 Q3
% change on year earlier % change on previous quarter, annualised
Real growth in Gross Domestic Product (GDP)
Growth has averaged 4% per annum in the past four years and is projected to
increase to 5% for the coming four years.
South Africa has experienced 85 months of continuous growth.
Economic Growth
Macro-economic Trends
5
The economy is beginning to generate additional jobs although challenges remain in this regard.
Job Creation
Source: Statistics Pack - Presidency
8000
10000
12000
14000
Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar
2002 2003 2004 2005 2006 2001
Unemployed (official) Broad
Employed Unemployed
Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar
2002 2003 2004 2005 20062001
0%
15%
30%
45%
Macro-economic Trends
6
Government is in a very strong fiscal position
Fiscal Situation
Source: Statistics Pack - Presidency
% o
f G
DP
93|94 94|95 95|96 96|97 97|98 98|99 99|00 00|01 01|02 02|03 03|04 04|05 05|06-10
-8
-6
-4
-2
0
Budget deficit
Macro-economic Trends
7
Inflation
Inflation has stabilised below the 6% target.
Source: Statistics Pack - Presidency
%
Inflation CPI
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20060
2
4
6
8
10
12
14
December
Macro-economic Trends
8
After an initial drop associated with a rise in the value of the currency, exports are
beginning to grow again.
Exports
Source: Statistics Pack - Presidency
Exports
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
September
% o
f G
DP
0
5
10
15
20
25
30
35
40
Macro-economic Trends
Economic Structure
South Africa’s economy has diversified away from primary commodities
Source: SARB
Contribution to National GDP
1946 1956 1966 1976 1986 1996 20060
10
20
30
40
50
60
70
December
% s
hare
Primary sector (Agriculture and Mining)
Secondary sector (incl Manufacturing)
Tertiary sector
Focus Areas of the Strategy
Increased macro-economic stability
Increased investment in economic infrastructure
Sector investment strategies
Development of skilled labour
Strengthening the 2nd economy
Improvement in state organisation and capacity
Gearing for Growth
Macro-economic Trends
6% of Africa’s Population
18% of Africa’s GDP
45% of Africa’s mineral production
50% of Africa’s purchasing power
Dynamic force in SADC
Driving force in NEPAD Extensive road & rail infrastructure which connects with Sub-Saharan Africa
Telecoms infrastructure with world-class connectivity and uptime
The Gateway into Africa
STRATEGIC GEOGRAPHIC POSITION TO GLOBAL SHIPPING ROUTES
OUR LOCATION
Business Processing and Outsourcing & IT Enabled Services Call Centres
Back Office Processing
Shared Corporate Services
Enterprise solutions in e.g. fleet management, knowledge management & asset management
Value Proposition
SA offers high quality, low cost destination for BPO in stable investment environment supported by world class infrastructure
Cultural and product affinity with the UK and Europe
Public sector commitment made long-term commitment to this sector, so strong investor support & sustainable reduction in costs over the next few years
Business Opportunities
Business Opportunities
Tourism
Hotels & self-catering holiday resorts
Adventure, eco-, sport-, conference & cultural tourism
Infrastructure development
Leisure complexes & world class golf courses
Harbour & waterfront developments
Transfrontier conservation
Competitive Advantage
SA’s fastest growing industry
2010 Football World Cup
Business Opportunities
Agro-processing
Industry Opportunity
Fisheries & aquaculture Freshwater aquaculture & mariculture e.g African catfish; oysters, abalone
Meat Processing Processing exotic/indigenous meats e.g venison; ostrich & crocodileFruit & vegetable processing
Export of deciduous & subtropical fruits; processing indigenous fruit, baby vegetables, nuts (pastachio, cashew, macademia); juices
Indigenous teas Processing & exporting of rooibos & honeybush
Indigenous herbs Processing for medicinal & cosmetic products
Wine production Production of wines for export & local markets
ConfectionaryManufacturing & exporting of confectionary e.g baking products, sweets, chocolates
Natural fibres
Processing of natural fibres from e.g. cotton, hemp, sisal, kenaf & pinable for specialised paper industry
Business Opportunities
Automotives & components Vehicle interiors e.g. natural fibre interior
Engine parts/components
Electronic drive chain components
Body parts e.g. lights, painted plastic components, airbags, glass wire products,
Aluminium components
Wheels (steel & aluminium)
Catalytic converters
Plastic tool & die manufacturing
Competitive Advantages
Access to aluminium & steel
Removal of tariffs into EU
Competitive tooling costs
Business Opportunities
Chemical & allied Industries
Industry Opportunity
Organic chemicals Propylene oxide, food acids (citric, lactic, etc), sorbates & flavourants
Inorganic chemicals Titanium derivatives, flurochemicals, phosphates, aluminium fluoride
Pharmaceuticals R&D, clinical trials, active pharmaceutical ingredients, botanical extracts
Other Titanium benefication (pigment), fluro-chemical production for agriculture, steel
Competitive Advantage
Abundant mineral feedstock for inorganic chemical manufacturing
Abundance of agricultural raw materials (sugar, molasses, essential oils – lavender; khakhi-bush; lemon grass)
Business Opportunities
Clothing, textile & footwear
Large-scale manufacturing of industrial textiles using polyester
Wool & mohair production – downstream opportunities for yarns, knitwear & fabric
Manufacturing of leather uppers
Competitive Advantage
World’s largest producer of mohair
Raw materials to produce any type of leather footwear – bovine; ostrich; crocodile; game leather
Business Opportunities
Electro-technical industries Manufacturing automotive electronics
Manufacture PC boards for automotive sector
Upgrading existing microchip manufacturing
Upgrading existing telecoms equipment
Power line communications (PLC)
Niche software engineering
Opportunities in defence related electronics
Expansion in pre-payment metering technologies
Partnering for infrastructure (utilities) related projects in Africa
Competitive Edge
Leading the world in prepayment technology and standards
Piloting new innovations
Business Opportunities
Mining & metal-based industries
Downstream processing & value adding of iron, carbon steel, aluminium & platinum group metals
Aluminium smelting
Casting & forgings
Ferro-alloys
Stainless steel production e.g. stainless steel wire
Manganese metal production & castings
Gold chain manufacturing & handmade jewellery
Comparative Advantage
Large aluminium & steel resources
World’s largest deposits of platinum group metals
Business Opportunities
Aerospace Aviation related services, including maintenance, repair and overhaul
Rotary and fixed wing components
Aviation training services
Specialised manufacturing of avionics, including health usage monitoring systems
Satellite related services (including tracking and control and applications development)
Rail
Production of infrastructure (tracks, signalling, electrification)
Manufacturing of rolling stock & components
Manufacturing of mining rail equipment
Maintenance (infrastructure & rolling stock) R&D
Marine
Manufacturing & assembly of engines & gearbox
Manufacturing of mechanical components
R&D
Business Opportunities
Capital Equipment
Industry Opportunity
Re-capitalisation Boilers & heat exchangers; Tool dies & moulds; Petrochemical equipment
Expansion & exportPumps & valves; material handling equipment & straddle crane carries; mechanised mining equipment
New investments Turbine assembly; turbine components; machine tool manufacturing
Competitive Advantage
Access to steel, aluminium
Competitive costs
Engineering technology
Business Opportunities
Film
Film studio production
Co-production ventures
Distribution infrastructure
Servicing foreign productions
Comparative Advantages
Co-production treaty with UK
Film rebate scheme
Conclusion
South Africa offers compelling business opportunities, with stable macro-economic environment, strong fiscal position and a clear growth strategy based on building on comparative advantages and removing constraints
THANK YOUTHANK YOU
CONTACT USCONTACT US
SOUTH AFRICAN HIGH COMMISSION
TRAFALGAR SQUARE
WC2N 5DP
LONDON
PH. 020 7451 7237
FAX. 020 7839 0634
EMAIL. london@thedti.gov.za