jsw contry risk management

8/7/2019 Jsw Contry Risk Management

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COUNTRY RISK MANAGEMENT.SOUTHAFRICA.za

SOUTH AFRICA

Presented By : RESHMA DHULAP.

RUPALI HOWAL.Guided By: Prof : S.B.Choughule.


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JSW IN SOUTH AFRICA.

JSW Energy Ltd, a unit of Indias third largest steelmaker,

has acquired a part of a company that owns shares in South

African Coal Mining Holdings Ltd.

JSW Energy acquired a 49.8% stake in Royal Bafokeng

Capital (Proprietary) Ltd from Strider Holdings

(Proprietary) Ltd and has the option of buying the

remaining 50.2% from Royal Bafokeng VenturesProprietary Ltd.


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INTRODUCTION OF JSW.

Established in 1982.

O.P. Jindal is the founder of Jindal Group.

JSW Steel Ltd. is one among the largest Indian Steel

Companies in India today with capacity of 7.8MT.

Jindal Steel is amongst the largest corporate groups in

India. Jindal Group is presently a US $5 billion

conglomerate and ranks fourth amongst the top Indian

Business Houses in terms of assets.

Jindal Steel is one of the largest steel producers in India

with 12 plants in India and 2 in USA.


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INVESTMENT AND TRADE WITH SA.INVESTMENT AND TRADE WITH SA. FDI : Indian companies currently executing project worth over US $ 2FDI : Indian companies currently executing project worth over US $ 2

billion in SA.billion in SA.

Bilateral Trade :Bilateral Trade :

Source: Department of Commerce, Govt. of India.

A challenge to boost bilateral trade to US $ 10 billion by 2012.

Figures in Million. US $. 2008-2009 (estimates)

India's Exports 1,980.28

India's Imports 5,513.58

Total Trade 7,493.87


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SOUTH AFRICA : A DESTINATION FOR

INVESTMENT.KEY FACTS

South Africa is located at the southernmost

region of Africa.

Area: 12,19, 090 square kilometres.

Currency : One Rand (R) = 6.445 Indian Rs.

or 1 Rupee. = 0.16 ZAR

Largest city: Johannesburg

Coastline : 2,954 KM (India 7016 KM).

CAPITALS :

Pretoria (administrative)

Cape Town (legislative)

Bloemfontein (judicial)


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SOUTH AFRICA : COUNTRY PROFILE .

Population (2009): 50.1 million

Major Religion : Christianity- 79.7%, Islam- 1.5%, Hindu- 1.3%.

Languages : 11 official languages including English, Afrikaans,

Sesotho, Setswana, Xhosa and Zulu.

Literacy : Rank 107, 88% (India-149,66%) (United NationsDevelopment Programme Report 2009)

Life expectancy: 50 years (men), 53 years (women).

Internet domain: .za

International dialling code: +27


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POLITICAL GROUNDy Though regional stability is low, South Africa is a stronghold of

political and societal progress.y There has been a political shift in South Africa due to the forced

exit of the former president in the wake of a corruption scandal.

y Aggressive fiscal spending is combating economic conditions,

and the South African central bank has cut interest rates

aggressively.

South African President MR. Jacob Zuma.

Invited the Indian industry

to invest in South Africa.

Mr Zumas said in Mumbai that

South Africa is open for business

and he encouraged new investment

from India.


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ECONOMIC GROUND

y Real GDP growth rate (2009): -1.9% ; 2010 :2.6% (Forecast).

y GDP (purchasing power parity): $488.6 billion (2009 est.).

y GDP - composition by sector :

Agriculture: 7 % .

Industry: 32.1%.

Services: 64.4% (2009 est.).

y GDP (official exchange rate): $277.4 billion (2009 est.).

y Prime overdraft lending rate of banks (April 2010): 10% .

y GDP - per capita (PPP): $10,000 (2009 est.).

y Consumer inflation rate (March 2010): 5.1% y/y .

y Producer inflation rate (March 2010): 3.7% y/y .

y Unemployment (fourth quarter 2009): 24.3% .


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on .

South Africa has a largely industrialized economy with a largservices sector.

Gross domestic product (GDP) per capita is high relative to othe

African nations (USD 5693) but there is a great deal of incom

disparity as half the country lives in poverty. Inflation was high in 2008 at 11.5% but

Price increases slowed considerably with the

global economic slowdown.

One of continent's biggest economies. Poverty widespread, hig

crime rate associated with high unemployment. Economy move

into recession in May 2009.


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FOREIGN TRADE

Export commodities : gold, diamonds, platinum, other metals and

minerals, machinery and equipment.

Exports - major partners : US 11.9%, Japan 11.1%, Germany 8%, UK

7.7%, China 6.6%, Netherlands 4.5% (2009).

Total exports :$67.93 billion in 2009.

Import commodities : machinery and equipment, chemicals,

petroleum products, scientific instruments, foodstuffs.

Imports - major partners : Germany 10.9%, China 10%, Spain 8.2%,

US 7.2%, Japan 6.1%, UK 4.5%, Saudi Arabia 4.2% (2009).

Total Imports : $70.24 billion in 2009.

Global competitiveness ranking :45 (2009/2010).

Economic freedom index :63.8 (2009).


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SOCIAL CONDITION.

Doing business in South Africa is made more difficult by its

segregated and unequal society and economy.

Both the high crime rate in South Africa and the AIDS epidemic pose

serious societal problems and have interfered with prospects for

growth and investment. The predominantly poor, black majority population lives in poverty in

the midst of great wealth.

As a result, businesses cite the lack of a trained workforce and

prevalence of violent crime as significant obstacles to doing business.These factors raise costs and increase the difficulty of conducting

business ethically.

Coal mines have a railway load and barge facility which reduces the

cost of production and transportation of the coking coal.


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TECHNICAL GROUND.

South Africas scientists and infrastructure are world-class and thecountry is rapidly positioning itself among the global leaders in

innovation, science and technology (S&T). National Biotechnology strategy(NBS) , which was launched in 2001,

sets the agenda for the development of South Africas biotechnologyindustry.

South Africa continues to promote high-technology investment in

space science to ensure that local researchers and students are able toparticipate in international astronomy.

Advanced Manufacturing Technology Strategy(AMTS) guides effortsin the manufacturing sector, including the aerospace industry.

National Nanotechnology Strategy recognises the needs of local

industry and focuses on the essential building blocks of nanoscience,namely synthesis, characterisation and fabrication.

South Africa devotes 10.5% of its R&D expenditure to Informationand Communication Technology (ICT).South African researchershave the advantage of using massive computing power in their questfor new knowledge and applications.


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INTERNATIONAL RANKINGS

Ranked-54(INDIA-51) out of 139 countries in the Global

Competitiveness Report 2010. It is the highest-ranked Sub-

Saharan country.

Ranked -34(IND

IA-133) out of 183 countries and 2 of 46Sub-Saharan countries in the World Banks Doing Business

Report 2010 Report.

Ranked 5 out of 48 countries in Ibrahim Index of African

Governance. Scored 12/16 for Rule of Law in Freedom in the World

2008.

South Africa was ranked-55(INDIA-84) out of 180

countries in Corruption Perceptions Index 2009.


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SOUTH AFRICA A GATEWAY TO THE

AFRICAN CONTINENT.

South Africa is the economic powerhouse of the African continent,

with a GDP of $ 277 bn, accounting for 30 % of entire GDP of Africa.

The country leads the continent in industrial output, mineral

production and generates 50% electricity consumed in Africa.

US, Japan and China are the major destinations for South Africas

exports and together account for close to 30% of its total overseas

shipments.


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ANALYSIS

Political Risk : Low.

Economics Risk : Moderate.

Socio-Cultural Risk : Moderate.

Technological Risk : Low.

Logistics Risk : Low.

Scale: Low, Moderate, High, Very High.

Since there is no high risk is anyarea. Country is good for

investment.


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jsw contry risk management

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