посольство юар icc presentation 23 feb 2017 changed

Economic Cooperation

between South Africa and

UkraineAmbassador CA Basson

23 February 2017

Ukrainian ICC

Ukrainian League for Industrialists

and Entrepreneurs

LLC Stanley Group

Content

1. South African Embassy Mandate

2. South Africa, Southern Africa & Africa

3. Economic Facts and Trends

4. Competitiveness and Doing Business

5. Economic Success Stories

6. South Africa-Ukraine Trade

7. Investment Opportunities

8. Major Investment Programmes

9. Investment Incentives & Support

10.B-BBEE


Mandate:

Engage in economic diplomacy to increase

value added South African exports and attract FDI

to priority sectors as identified in the Industrial

Policy Action Plan (IPAP)

Opportunities in IPAP:• Metals Cluster

• Automotive

• Agro Industries

• Green Industries

• Chemicals, Pharma & Plastics

• Advanced manufacturing


Support to Ukrainian companies:

• Ukrainian companies interested in IPAP

• South African strategic imports

• Guidance on South African economic sectors

• Ukrainian companies responsible for their

own marketing, identifying business partners

and due diligence.

2. South Africa, SADC, Africa

• SADC FTA signed in August 2008 –

market of 250 million consumers

• Future FTA with SADC,COMESA &

EAC with a market of 800 million

consumers

• Africa with population of over 900

million and growing economy


•Area 1,219, 090 km2

•Population 52m (2013)

•11 Official languages with English the business language

•Total GDP : 2014 (US$ 350.6bn )

•GDP 2014 per capita: (US$ 12 105)

•Real GDP Growth: 1.5% (2014 Est)

•Inflation (CPI): 4.0 % (annual 2014 average)

•Main Exports; minerals & mineral products, precious

metals & metal products, chemical & food products,

automotives & components.

•Main trading partners: China, USA, Japan ,Germany &

the UK.


•South Africa positioned as a manufacturing centre of excellence

•Diversified Industrial sectors

•Open economy

•Sound business case for investment and profit

•Gateway to Africa and markets of more than 900 Million consumers

•Africa is the next big story after China and India

South Africa Ukraine

2004 2015 2015

GDP (Billions) US$ 171 US$ 324 US$ 87

Merchandise exports US$ 35.2 US$ 97.9 US$ 35,4

GDP Growth 4.6% 1,3% -9,9

3. Economy - GDP

Export Country

2015

Rand

(millions)

1. China 73,602

2. United States 66,564

3. Japan 46,224

4. Germany 53,742

5. United Kingdom 38,778

6. India 39,912

7. Netherlands 23,149

8. Switzerland 11,480

Import Country 2015

Rand

(millions)

1. China 185,223

2. Germany 119.526

3. United States 67,133

4. Japan 38,845

5. Saudi Arabia 28,133

6. India 49,979

7. United Kingdom 31.613

8. Iran 83,979

3. Economy - Trade

3. Economy – Fiscal position

• Budget balance at -4 % (2014)

• Decline to 3.5% by 2015

• Current Account : -5.4% of GDP

• Balance of Payment: +0.3%

• Foreign reserves: US$ 48 bn

• Capital Formation: 17.8% of GDP

4. Competitiveness & Doing Business

• Vast mineral resources:• No.1 for PGM, Chrome, Manganese

• No.3 for Gold, Coal &

• Corporate Tax rate of 28%

• Well developed legal system bases on sound constitution

• Well developed & independent public institution (legal, economic

etc)

• Prime Interest Rates at 9.25%

• Gateway to Sub-Saharan Africa

• JSE top 20 of global exchanges

• Well developed infrastructure:

• 3 of Africa’s busiest International airports (JNB, CTN, DBN)

• Africa’s largest container Port in Durban

• Mobile telecoms subscription at over 90%

• Well developed rail & road infrastructure

• Over 45 000 MW electrical generation capacity & network

Night View of Johannesburg

M1 Highway from Johannesburg

Cape Town

• Preferential Export market access:• EU (FTA and TDCA)

• SADC

• USA- AGOA (Africa Growth Opportunity Act)

• Future Trilateral Free Trade Area (SADC-EAC-COMESA)

• Preferential trade with India & Mercusor

• Special Export Zones (SEZ)• Coega Port & Industrial Zone (heavy industries)

• East London Industrial Zone (Automotive Cluster)

• Richardbay Industrial Zone (Bulk metal industries)

• Saldahna Bay Industrial Zone (Oil, Gas, Steel)

4. Competitiveness & Doing Business

Coega SEZ

Saldahna SEZ

• Successful automotive cluster• 272 000 exports from BMW (3 series), Mercedes Benz (C-Class), Toyota

pick up, VW Polo, Ford Pick up, Nissan Pickup

• Exports to USA (C-class, 3-er) UK (Polo, Toyota pickup, Ford Pickup,

Japan (C-class), Australia (Toyota, C-Class), GM

• 14% of Global Catalytic convertor supply

• 40-70% local content

5. Success Stories

• Coal & Gas to Liquid Technologies• Sasol Fischer-Tropsch Process

• Deep Mining Technologies• Some of deepest mines in the world (3 km)

• Mobile solutions & technologies• Mobile banking & transactions

5. Success Stories

• Bilateral trade has recovered from 2009

Source: www.thedti.gov.za

0

500

1000

1500

2000

2500

ZAR -

Mill

Название оси

SA - Ukraine Ukraine - SA

6. South Africa- Ukraine Trade

• SA exports dominated by commodities

Source: www.thedti.gov.za

Minerals75%

Vegetable Products11%

Transport Equipment

10%

Prepared Food Products

1%

Other3%

SA Exports to Ukraine

6. South Africa- Ukraine Trade

Imports fromSouth Africa

Imports from South Africa

• US$ 52 406 000

(SARS figures for period

Jan – Sept 2016)

• US$ 93 013 000

(Ukrstats figures for

period Jan – Oct 2016)

Monetary Value


SARS figures (Ukrstats figures in

brackets):

• US$ 37 943 000 – Manganese ores

and concentrates

• US$ 452 000 – Iron and Steel

• US$ 454 000 – Chromium ores and

concentrates

Sectors/products (1)


• US$ 1 237 000 – Ferro Chromium (US$

4 166 000)

• US$ 4 848 000 – Citrus fruit (US$ 8

563 000)

• US$ 977 000 - Anthracite (US$

26 213 000)

• US$ 3 255 000 – Bituminous coal

• US$ 529 000 – Pharmaceutical

products, mainly veterinary



• (US$ 722 600 – Pharmaceuticals)

• US$ 216 000 - Wines (US$

583 200)

• (US$ 37 213 000 – Fuel, Oil

Petrochemicals)

• (US$ 4 278 000 – Hides)



• (US$ 3 965 000 – Land vehicles:

(US$ 1 574 000 – Pearls,

gemstones, precious stones)

• (US$ 2 272 400 – Nuclear

reactors, boilers)


Exports to South Africa


• US$ 37 400 000

(SARS figures for the period Jan

– Sept 2016)

• (US$ 35 696 000

(Ukrstats figures for the period

Jan – Oct 2016)

Monetary Value


• US$ 9 557 000 – Floating dock

• (US$ 9 587 700 – Floating dock)

• US$ 3 852 000 – Mainly parts and

accessories of printers, copying

machines and facsimile machines, as

well as kneading, crushing and

grinding machines



• US$ 1 513 000 – Dried peas,

shelled, whether not skilled or split

• US$ 15 587 000 - Mainly wheat

and buckwheat

• (US$ 20 053 000 – Grains)



• US$ 656 000 - Refined sugar,

chemically pure sucrose

• (US$ 911 000 – Sugars)

• US$ 1 340 000 - Mainly electric

heat resistors

• US$ 383 000 – Parts of aeroplanes or

helicopters



• (US$ 11 200 – Aircraft components)

• US$ 649 000 – Preparations of

cereals, flour, starch or milk

• US$ 217 000 – Mainly long-life milk,

condense milk and custard

• (US$ 230 600 – Milk, dairy products,

eggs and honey)



• US$ 731 000 – Sanitary towels,

napkin liners for babies, etc.

• (US$ 2 001 200 – Vegetables)

• (US$ 105 330 – Coffee, tea)

• US$ 711 800 – Ready-made grain

products


• Metals Cluster• Steel Profiles, Construction steel, Piping,

• Locomotives & wagons, Industrial components

• Automotive• Component and systems manufacturing

• Trucks, busses, tractors and special vehicles

• Agro Industries• High value intensive agriculture

• Food processing for export markets

• Green Industries• Solar panels and PV cells

• Wind turbines

• Chemicals, Pharma & Plastics• Polypropelene articles & components

• Pharmaceuticals (APIs)

7. Opportunities (Industrial Plan)

• Advanced Manufacturing• Nuclear components

• Aerospace and defence components and systems

• Titanium metal products

• Nanotechnologies

• Business Process Services• Back Office Operations (Financial, medical, legal etc)

• Call Centers

• Remote & Offshore support services

7. Opportunities (Industrial Plan)

• Economic Infrastructure• Euro 30 billion for Rail infrastructure & rolling stock (2012-2017)

• Euro 300 billion for Nuclear Power plants (2017 – 2030)

• Euro 10 billion for sea port expansions

• Telecoms

• Automotive Cluster• Euro 200 million Mercedez Benz recap (2013)

• Euro 100 million Nissan expansion

• Euro 100 million VW expansion & localisation

• Other• Euro 100 million renewable energy programme

8. Major Investment Programme

Incentive Benefit Main Conditions

Section 12i Tax

Allowance

Tax deductions of up to R 900m

depending on status viz.

preferred or qualifying projects.

Training allowance/ deduction of

up to R30m or R36 000 per

employee.

Valid until December 2015

Capital investment > R 200m

Critical Infrastructure Fund

Infrastructure projects intended

to service IDZ, shall qualify for a

grant of 30% of the qualifying

infrastructure development cost

The minimum qualifying infrastructure

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 and international

profile and increase foreign

direct investment

Foreign owned qualifying productions

9. Investment Support & Incentives


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

to local and foreign investors

Local and foreign investors establishing projects that aim

primarily to serve offshore clients

Competitiveness Improvement Programme

Grants are to be used for the

following interventions:

World-class manufacturing

principles.

Training

Labour relations and employee

wellness programmes

Product related

Supply chain integration

Industrial engineering

Competitiveness improvement

Bottom line business processes

Clothing and Textile companies and clusters



Production Incentive (PI)

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

Clothing manufacturers

Textiles manufacturers

Cut, Make and Trim (CMT) operators

Footwear manufacturers

Leather goods manufacturers and

Leather processors (specifically for

leather goods and footwear

industries).

Automotive Investment Scheme

(AIS

A taxable cash grant of 20 percent

of the value of qualifying

investment in productive assets

Motor vehicle assemblers/manufactures.

Motor component manufacturers

Manufacturing Competitiveness Enhancement Programme (MCEP)

The MCEP comprises two sub-programmes:

• The Production Incentive (PI) i.e. 7% to 5% of the manufacturing value added.

Industrial Financing Loan Facilities viz:

• Pre-/Post-Dispatch Working Capital

• Industrial Policy Niche Projects Fund

The MCEP is available to South

African-registered entities engaged

in manufacturing Standard

Industrial Classification (SIC 3),

engineering services that support

manufacturing, and conformity

assessment agencies (SIC 88220)

servicing the manufacturing sector.



The Enterprise

Investment Program

(EIP)

The EIP (manufacturing) is a cash

grant for locally based

manufacturers who wish to

establish a new production

facility, expand an existing facility

or upgrade an existing facility in

the clothing and textiles sectors

the EIP will be used to stimulate

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.

Foreign Investment Grant

To compensate qualifying foreign

investors for the cost of moving

qualifying new machinery and

equipment from abroad to SA.

Foreign investors only

Industrial

Development Zone Exemption from VAT when

sourcing goods and services from

South African customs territory

and duty-free imports of raw

materials and inputs for export

Prospective IDZ operator companies

must apply for permits to develop

and operate an IDZ


10. B-BBEE

THANK YOU

Contact Details

South African Embassy to Ukraine

9/2 Velyka Vasylkivska Str

Kiev, Ukraine

Tel: +38044 289 8840

fax: +38044 289 7206

email: [email protected]

mailto:[email protected]

посольство юар icc presentation 23 feb 2017 changed

Economy & Finance