julius okiror, economist vietnam delegation 26...

Julius Okiror, Economist

Vietnam Delegation 26 June 2015 An inspiring place to do business

Presentation overview

• Overview of Wesgro

• The Western Cape Economy

• Trade and Investment between Western Cape & Vietnam

• Questions and Answers

An inspiring place to do business


Wesgro business structure

• Established by Law:

– Western Cape Investment and Trade

Promotion Law Act 3 of 1996

– Western Cape Investment and Trade

Promotion Agency Amendment Act,

2013

• Compliance in terms of Treasury

Regulations/ PFMA/ MFMA

• Reports to:

– MEC for Agriculture, Economic

Development and Tourism - MEC

Winde

– Office of the Mayor – Lance Greyling

• Financed by:

– Western Cape Government

– Department of Economic Development

and Tourism

- Department of Agriculture

– City of Cape Town

Item Source Number

Population Stats SA – Mid-2014 Estimate 54 Million WC: 5.3 Million

Real GDP (2014) Stats SA ZAR 3trn WC: ZAR 299bn

(2013)

Inflation (CPI) Statistics SA – March 2015 4.0%

Prime Rate South African Reserve Bank – May 15th 2015 9.25%

Literacy Rate (ages 15+) Human Development Report 2013 93%

Company Tax SARS - 2014/15 28%

Unemployment Statistics SA – 4th Quarter 2014 24.3%

VAT SARS - 2014/15 14%

Inequality (Gini Index) Human Development Report 2014 0.658 (118th)

South Africa by numbers


Western Cape infrastructure & connectivity


• The province boasts 3 export-oriented ports

• Cape Town is a prominent stop on some of the world’s major shipping routes

• Sophisticated road infrastructure linking Cape Town to other major South Africa centres and beyond

• The province has world class IT infrastructure linked to the world via submarine cables and satellite

• Cape Town airport has direct international flights to 13 destinations

The Western Cape as an attractive business destination

• Strategic position as a springboard into Africa – access to Southern African Customs Union (SACU) and the Southern African

Development Community (SADC), soon to be AFTZ

• The City of Cape Town first city introduce incentives for investors in Atlantis Industrial Area- include an electricity tariff subsidy and

exemptions from building plan scrutiny fees, land use application fees and fast-tracking of Environmental Impact Assessments.

• Cape Town airport the 2nd busiest airport in South Africa & 3rd busiest in Africa.

• Cape Town is the 2nd largest financial centre in the country.

• 4 Universities and 2 Business Schools (UCT 1st in Africa & UCT-GSB: Best in Africa); UCT’s MBA is ranked 60th globally by

Financial Times.

• 2014 World Design Capital was Cape Town

• Cape Town is considered one of the top 10 film production centres in the World

• Saldanha Bay IDZ – Oil & Gas maintenance hub


Western Cape GDP by sector


Source: Quantec, 2014

2002 – 70.2%

Services sector: 2007 – 71.9%

2013 – 73.6%

Agriculture,forestry and

fishing

Mining andquarrying

ManufacturingElectricity and

waterConstruction

Wholesale & retailtrade; hotels &

restaurants

Transport andcommunication

Finance, realestate and

business services

Community, socialand other

personal services

Generalgovernment

services

2002 5.0% 0.3% 18.8% 2.5% 3.2% 15.9% 9.8% 26.3% 7.5% 10.7%

2007 4.0% 0.3% 17.5% 2.4% 4.0% 16.1% 10.5% 28.6% 7.1% 9.7%

2013 4.1% 0.3% 15.8% 2.0% 4.2% 16.1% 10.2% 29.8% 6.8% 10.8%

0%

5%

10%

15%

20%

25%

30%

35%

% S

hare

WESTERN CAPE REAL GDP BY SECTOR, 2002-2013

Western Cape GDP by manufacturing & services sector

An inspiring place to do business Source: Quantec, 2014

[CATEGORY NAME]

[PERCENTAGE]

[CATEGORY NAME]

[PERCENTAGE]

[CATEGORY NAME]

[PERCENTAGE]

Wood, paper, publishing &

printing 10%

Furniture&other manufacturing

8%

Textiles, clothing &

leather goods 7%

Transport equipment

6% Other non-metal mineral

products 3%

Electrical machinery & apparatus

2%

Radio, TV, instruments,

watches 1%

MANUFACTURING SECTOR CONTRIBUTION TO THE WESTERN CAPE, 2013

[CATEGORY NAME]

[PERCENTAGE]

[CATEGORY NAME]

[PERCENTAGE]

[CATEGORY NAME]

[PERCENTAGE]

General government

14%

Transport and storage

7%

Community, social and personal services

7%

Communication

6%

Catering and accommodatio

n services 2%

SERVICE SECTOR CONTRIBUTION TO WESTERN CAPE GDP, 2013

RANK TOP 10 EXPORTS VALUE 2013

(ZARbn)

% GROWTH

2012-2013

1 Oils petroleum, bituminous, distillates,

except crude 8.39 -5.32

2 Grape wines 7.80 33.26

3 Citrus fruit, fresh or dried 6.58 22.70

4 Apples, pears and quinces, fresh 5.59 53.52

5 Grapes, fresh or dried 4.02 22.27

6 Hot-rolled products, iron/steel,

width>600mm, not clad 3.11 7.47

7 Liquid, gas centrifuges, filtering, purifying

machines 2.01 -6.23

8 Maize (corn) 1.83 44801.31

9 Fruit, nut, edible plant parts nes,

prepared/preserved 1.60 16.90

10 Liqueur, spirits and undenatured ethyl

alcohol <80% 1.28 66.28

TOTAL EXPORTS 74.87 16.06

Western Cape global export and import products


RANK TOP 10 IMPORTS VALUE 2013

(ZARbn)

% GROWTH

2012-2013

1 Petroleum oils, oils from bituminous

minerals, crude 66.39 -16.76

2 Oils petroleum, bituminous, distillates,

except crude 33.36 9.42

3 Diodes, transistors, semi-conductors, etc 3.69 1948.99

4 Liqueur, spirits and undenatured ethyl

alcohol <80% 2.83 38.63

5 Prepared or preserved fish, fish eggs,

caviar 1.67 9.60

6 Medicaments, therapeutic, prophylactic

use, in dosage 1.67 73.87

7 Footwear nes, with outer sole, upper

rubber or plastic 1.35 -0.98

8 Footwear with uppers of textile materials 1.27 9.51

9 Electric generating sets and rotary

converters 1.07 3550.16

10 Machines nes having individual functions 1.03 -3.16

TOTAL IMPORTS 186.57 3.99


Western Cape global trade markets, 2013



TOP 10 WESTERN CAPE EXPORT MARKETS, 2013

RANK IMPORTERS VALUE 2013

(ZARbn)

% SHARE

2013

%

GROWTH

2012-2013

1 Netherlands 6.74 9.00 -0.91

2 United Kingdom 6.66 8.89 25.04

3 Germany 3.85 5.14 25.33

4 Mozambique 3.78 5.05 148.62

5 United States 3.49 4.65 4.38

6 Singapore 2.70 3.61 9.17

7 Japan 2.65 3.53 117.68

8 Angola 2.54 3.40 11.83

9 Kenya 2.29 3.05 64.53

10 China 2.12 2.84 49.39

TOTAL EXPORTS 74.87 100.0% 16.06%

TOP 10 WESTERN CAPE IMPORT MARKETS, 2013

RANK EXPORTERS VALUE 2013

(ZARbn)

% SHARE

2013

%

GROWTH

2012-2013

1 Saudi Arabia 37.67 20.19 -0.32

2 China 28.01 15.01 39.27

3 India 16.37 8.77 75.28

4 Nigeria 13.59 7.28 -20.73

5 Germany 8.10 4.34 65.45

6 Singapore 7.54 4.04 75.42

7 United Kingdom 6.58 3.53 21.31

8 Italy 5.24 2.81 38.49

9 United States 4.71 2.52 13.80

10 Netherlands 4.64 2.48 -11.23

TOTAL IMPORTS 186.57 100.0% 3.99%


Western Cape trade with Vietnam



2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Exports (ZARm) 119.6 125.6 90.4 143.7 213.2 163.6 362.6 242.2 206.7 336.8

Imports (ZARm) 102.9 142.1 162.9 234.0 420.3 327.8 362.3 552.1 740.5 591.1

Trade balance (ZARm) 16.7 -16.5 -72.5 -90.3 -207.1 -164.2 0.3 -309.9 -533.7 -254.4

-600

-400

-200

0

200

400

600

800

1,000

Val

ue (

ZA

Rm

) WESTERN CAPE TRADE WITH VIETNAM, 2004-2013

RANK TOP 10 EXPORTS VALUE 2013

(ZARm)

% GROWTH

2012-2013

1 Crustaceans 136.8 885.17%

2 Ferrous waste or scrap, ingots or iron or

steel 76.5 -26.64%

3 Grapes, fresh or dried 28.9 151.41%

4 Enzymes, prepared enzymes, nes 25.3 -19.39%

5 Citrus fruit, fresh or dried 21.5 155.79%

6 Wood in the rough or roughly squared 8.8 -14.10%

7 Apples, pears and quinces, fresh 8.8 52.27%

8 Fish, frozen, whole 7.3 63.49%

9 Composition leather, in slabs, sheets or

strips 6.6 48.99%

10 Grape wines(including fortified), alcoholic

grape must 6.0 41.63%

TOTAL EXPORTS 336.8 62.89%

Western Cape trade with Vietnam, 2013


RANK TOP 10 IMPORTS VALUE 2013

(ZARm)

% GROWTH

2012-2013

1 Rice 82.3 -24.08%

2 Footwear with uppers of textile materials 68.5 -24.30%

3 Coal, briquettes, ovoids etc, made from

coal 55.6 -56.28%

4 Pepper (Piper), crushed or ground

Capsicum, Pimenta 46.4 118.13%

5 Footwear with uppers of leather 44.7 -34.75%

6 Footwear nes, with outer sole, upper

rubber or plastic 33.8 -53.39%

7 Footwear nes, sole not leather, rubber or

plastic 21.8 -27.56%

8 Baked bread, pastry, wafers, rice paper,

biscuits, etc 20.1 -26.92%

9 Trunks, suit-cases, camera cases,

handbags, etc 19.1 -17.38%

10 Other furniture and parts thereof 17.7 30.15%

TOTAL IMPORTS 591.1 -20.17%

Source: Quantec, 2015 Crustaceans accounts for 40% & Ferrous waste or scrap iron & steel accounts for 22%

Top source markets & sectors of FDI into the Western Cape

An inspiring place to do business Source: FDI Intelligence, 2014

UK United States Netherlands Germany France China Switzerland India Denmark Spain

%Projects 25.12% 23.22% 7.58% 6.16% 4.74% 2.84% 2.84% 2.37% 1.90% 1.90%

%Capex 15.50% 19.53% 5.51% 6.36% 5.64% 0.96% 0.88% 1.69% 0.45% 0.58%

0%

5%

10%

15%

20%

25%

30%

% S

hare

BREAKDOWN OF FDI BY SOURCE MARKET, 2003- JUNE 2014

Software & ITservices

BusinessServices

FinancialServices

Communications

Transportation ChemicalsAlternative/Renewable energy

ElectronicComponents

ConsumerProducts

Coal, Oil andNatural Gas

%Projects 18.01% 17.54% 8.06% 6.64% 5.69% 3.79% 3.32% 3.32% 2.84% 2.84%

%Capex 4.61% 3.36% 2.59% 14.11% 4.12% 0.80% 13.28% 0.53% 2.06% 22.56%

0%

5%

10%

15%

20%

25%

% S

hare

BREAKDOWN OF FDI BY SECTOR, 2003-JUNE 2014

Breakdown of FDI from Vietnam to South Africa


VIETNAM FDI TO SOUTH AFRICA, 2003- APRIL 2015

DATE INVESTING

COMPANY

SOURCE

CITY

DESTINATION

STATE INDUSTRY SECTOR SUB-SECTOR

CAPEX

(ZARm)

May-09 Nam Viet Joint Stock

Company (NAVIFICO) Ho Chi Minh KwaZulu-Natal Wood Products

Furniture, homeware & related products

(Wood Products) 144.47

Feb-04

Vietnam National

Garment & Textile

Corp. (Vinatex)

Ha Noi Not Specified Textiles Clothing & clothing accessories 19.92

Oct-03 Vietnam News Agency

(VNA) Not Specified Gauteng

Paper, Printing &

Packaging Printing & related activities 992.43

Total 1 156.82

• Nam Viet JSC (Navifico) establish a South Africa based wood furniture manufacturing plant near Pietermaritzburg. The company supplies

furniture to Ghana and Angola and plans to expand its coverage of the African market.

• (Vinatex) (Ha Noi, Vietnam) invested in South Africa in the Textiles sector in a Sales, Marketing & Support project.

• Vietnam News Agency (VNA) (Vietnam) invested in the city of Pretoria, South Africa in the Paper, Printing & Packaging sector in a

Manufacturing project.

Source: FDI intelligence, 2015

Selected Investment Opportunities


RENEWABLE ENERGY

• Suppliers of parts and components for wind turbines and photo voltaics;

• Service and maintain wind and solar farms

AGRIBUSINESS

• Aquaculture: Development of open water aquaculture farms

• Essential Oils: Oil extraction and processing

ICT

• Software and IT services sector

• Multiple ICT incubators & accelerators in operation

• Government core focus area

BPO

• Government & private sector outsourcing

• Growth from new ventures

Hotels & Real Estate

• Construction of 3 to 5 star hotels- growing tourism

• Develop prime beachfront property

Metals & Niche Engineering

• Metals conversion and steel fabrication

• Manufacture automotive components, Engineering services

Specific Investment Opportunities


Extract of Investment Projects currently available in

the Western Cape

**Please note that Investment Projects operate as a going concern and thus projects listed in the

Investment Project extract may no longer be available upon request, due to fulfilment/acquisition of

investment targets. Wesgro is committed to updating the Investment Projects status on a regular basis.

Mega Projects


Sector Investment Size ($) Project Overview

Real Estate – Infrastructure &

Development (Multi-Sectoral

Possibilities)

$13.00billion Greenfield Project. A mega infrastructure project is

planned for the Western Cape. Partners are being

identified to support multiple components

including: Finance, Construction, Logistics etc

Renewable Energy $500.0m Greenfield Project: 5 Project Opportunities

available in Wind Energy. Company seeks equity

partner.

Key Investment Projects



Bio-waste $40.0m Greenfield Project. Project involves recycling of

agricultural waste into plastic. JV opportunity.

Energy Efficiency $10.0m Greenfield Project. Project focuses on heating

technology for hot water systems. JV Opportunity.

Real Estate – Hotel & Hospitality $26.18m Brownfield Hotel Opportunity. 5-Star Hotel in Cape

Town CBD. 61 keys

Real Estate – Hotel & Hospitality $21.0m Brownfield Opportunity. Includes Hotel and lifestyle

estate with opportunity for 45 additional properties, golf

course + numerous other add-ons including vineyards.

Real Estate – Hotel & Hospitality $12.5m Brownfield Hotel opportunity. Consists of a 65 key

hotel, 12 villas and a health spa. Opportunity to add

additional 20 rooms.

Real Estate – Hotel & Hospitality $5.4m Brownfield Hotel Opportunity. 4-Star Hotel in Cape

Town CBD, 33 Keys + Bar/Restaurant/Conference

Facilities. All zoning and licensing approved for

operation of hotel.

Key Investment Projects (continued)



Real Estate – Hotel & Hospitality $5.4m Brownfield Hotel Opportunity. 5-Star Luxury Hotel in

Cape Winelands, 35 Keys + opportunity to add an

additional 15 rooms (plans approved)

Agribusiness $3.0m Brownfield Project. Opportunity exists to acquire 30%

of a sauce manufacturing facility in the Western Cape.

Agribusiness $2.0m Brownfield Project. Opportunity exists to buy into

business concerned with the manufacturing of

neutroceuticals and fuel generated from Algae.

Company is in pilot phase and seeks to raise capital

to complete feasibility

Real Estate - Agriculture $7.0m Brownfield Farming opportunity, 398Ha

Real Estate - Agriculture $4.7m Brownfield Multi-focus Farm, 99Ha

Real Estate - Agriculture $3.5m Brownfield Wine Farm, Zoning has been granted to

turn Manor House into Boutique Hotel

Key Investment Projects (continued)


Sector Investment Size ($)

Project Overview

ICT $15m

ICT e-commerce and website development platform

seeks equity stakeholder. Business supported by

Microsoft BizSpark Premium and Samsung

ICT $2.5m

Brownfield Opportunity. A South African software

development firm is seeking an equity investor, for the

sale of a 25% stake in the business.

ICT $2.5m

Brownfield Opportunity. A South African software

developer is seeking an equity partner to fund a software-

based platform business focused on the agriculture and

agro-processing sectors. The company won the IBM

SmartCamp Africa pitching competition.

Film & Media $4.0m

Brownfield Opportunity. A South African animated media

business, which has successfully launched three major

animated movies, is seeking $4 million in order to develop

4 production scripts for additional movies

Point of Contact for Potential Investors:


Wesgro invites any potential investors or interested parties in the projects

outlined to contact the Wesgro Investment Promotion Team:

Mr Salman Kajie: Head: Investment Promotion Team [Acting]

[email protected]

Mr. James Milne: Investment Promotion Manager: ICT & Special Projects

[email protected]

mailto:[email protected]

mailto:[email protected]

Foreign subsidiaries in the Western Cape


Thank you | Dankie | Enkosi

julius okiror, economist vietnam delegation 26...

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