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SOUTH AFRICA OPEN FOR BUSINESS

SOUTH AFRICA OPEN FOR BUSINESS. BUSINESS OPPORTUNITIES. Tumelo Nkoane 11 July 2007 emita. PRESENTATION OUTLINE. Macro-economic Trends Gateway to Africa Sectoral Opportunities. Key Messages.

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SOUTH AFRICA OPEN FOR BUSINESS

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  1. SOUTH AFRICA OPEN FOR BUSINESS BUSINESS OPPORTUNITIES Tumelo Nkoane 11 July 2007 emita

  2. PRESENTATION OUTLINE • Macro-economic Trends • Gateway to Africa • Sectoral Opportunities

  3. Key Messages • 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

  4. 8.0 6.0 4.0 2.0 0 -2.0 Q1 Q2 Q3 1998 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 1999 2000 2001 2002 2003 2004 2005 2006 % change on previous quarter, annualised % change on year earlier Economic Growth Growth has averaged 4% per annum in the past four years and is projected to increase to 5% for the coming four years. Real growth in Gross Domestic Product (GDP) South Africa has experienced 85 months of continuous growth. Macro-economic Trends

  5. Macro-economic Trends

  6. Macro-economic Trends

  7. Macro-economic Trends

  8. Macro-economic Trends

  9. 70 60 50 40 30 20 10 0 1946 1956 1966 1976 1986 1996 2006 Economic Structure South Africa’s economy has diversified away from primary commodities Contribution to National GDP Tertiary sector Secondary sector (incl Manufacturing) % share Primary sector (Agriculture and Mining) December Source: SARB

  10. Gearing for Growth • 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 Macro-economic Trends

  11. The Gateway into Africa • 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

  12. OUR LOCATION STRATEGIC GEOGRAPHIC POSITION TO GLOBAL SHIPPING ROUTES

  13. 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

  14. 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

  15. Agro-processing Business Opportunities

  16. 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

  17. Chemical & allied Industries • 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

  18. 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

  19. 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

  20. 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

  21. 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

  22. Capital Equipment • Competitive Advantage • Access to steel, aluminium • Competitive costs • Engineering technology Business Opportunities

  23. Film • Film studio production • Co-production ventures • Distribution infrastructure • Servicing foreign productions Comparative Advantages • Co-production treaty with UK • Film rebate scheme Business Opportunities

  24. 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

  25. THANK YOU

  26. CONTACT US SOUTH AFRICAN HIGH COMMISSION TRAFALGAR SQUARE WC2N 5DP LONDON PH. 020 7451 7237 FAX. 020 7839 0634 EMAIL. london@thedti.gov.za

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