1. TRANSPORT INVESTORS CONFERENCE 2011 Investing into South Africa

2. South Africa at a glance Indicator 19942009 Total Population 38,283,22349,320,150 % of Total Population under 15 years 37%31% Adult Literacy Rate (1990) 76.2 %88.8% Internet Users 100,0004,420,300 Mobile Telephone Subscriptions 340,00046,436,000 GDP per capita (constant 2005 prices) R 27,400.12R 37,261.16 FDI (net inflows % of GDP) 0%2% Gross Fixed Capital Formation (% of GDP) 15%23% Source: World Bank Development Indicators 2010

3. South African Economy 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 200 Million consumers Africa is the next big story after China and India Subject Descriptor200520102015 GDP (constant prices)5.2772.7844.5 GDP per capita (constant prices)33,506.9836,730.2942,280.50 Investment (%GDP)17.95821.69820.855 Import volume of goods and services growth (%)10.8794.5846.3 Export volume of goods and services growth (%)8.5685.0366.452 Population (million people)46.88849.91252.979 Source: IMF: World Economic Outlook, April 2011

4. Achieving sustained and balanced growth Further, ‘consistently prudent macroeconomic policies have succeeded in reducing the fiscal deficit, stabilising debt levels, and lowering inflation and interest rates’ and the country ‘stands out among its peers due to its democratic and transparent institutions and entrenched political stability…’ Economic advantages which create a positive environment Increased investment in infrastructure Abundant mineral & natural resources A tested and reliable legal system A relatively large labour force Established industrial & financial infrastructure Standard and Poor’s, August 2010

5.  Rapid recovery from recession: 4.8% growth in Q1 14% growth in manufacturing improving fiscal position Improved growth prospects in Africa and Asia low interest rates Platform on which improved economic performance can be built South African Economy…  Complemented by investment in social, municipal and economic infrastructure Economic growth 2005-20072011-2014 5%4-5% = Employment growth of 140 000 in past 6 months Employment elasticity Increase to 0.8% relative to GDP growth = Proviso: Gross fixed capital formation growth of 10% p.a. - investment would thus rise to 25% by 2014. Reachable economic goals

6. Macroeconomic interventions to accelerate growth and ensure social inclusion  Higher public sector investment  Reduce the cost of doing business  Expand public works & micro-credit programmes  Improve state capacity to provide economic services  Strengthen social and municipal infrastructure Growth in 2011 expected 3,8%  Broad framework of further steps needed to raise the rate of investment, employment and economic growth  Proceeds from premise that positive developments in Africa and BRICS will lead to economic development. Macro-Economic Policy

7. Cape Town was named the top tourist destination in the world in the 2011 Traveler’s Choice Destinations awards. South Africa is the only African country that is a member of the G20 South Africa is also a member on the UN Security Council OR Tambo airport is the best airport in Africa, according to the World Airport Awards 2010/11. It was also in the top 3 most improved airports in the world for the same period South Africa’s Real GDP growth will accelerate from 2.8% in 2010 to 3.7% in 2011 and 4.8% in 2012, helped by stronger external demand and looser fiscal policy. South Africa- global perspective Source: SouthAfrica.info; Economist Intelligence Unit

8. Stellenbosch University was the first African university in the world to design and launch a microsatellite The Western Deep Level mines are the world’s deepest mines at approaching 4km. South Africa houses one of the three largest telescopes in the world at Sutherland in the Karoo. SA has 45 million active cell phones (population 49 million) – ranking in the top 5 globally in terms of cell phone coverage. South Africa sold $1.8 billion worth of cars to the US in 2010, putting us ahead of Sweden and Italy as suppliers to the US market. Car sales are projected to grow 10% in 2011 to 460,000 South Africa - global perspective Source: SouthAfrica.info

9. South Africa's total road network is about 754 000 kilometers, of which over 70 000km are paved or surfaced roads. South Africa has an extensive rail network – the 10 th lengthiest in the world – connecting with networks in the sub-Saharan region. More than 50 airlines, making around 230 000 aircraft landing, and carrying about 33m passengers a year, move through South Africa’s 10 principal airports. The Port of Ngqura is being developed off the coast of Port Elizabeth in the Eastern Cape and is set to be the deepest container terminal in Africa. South Africa - global perspective Source: South Africa Geared for Growth, 2010

10. Of 14 emerging markets; Australia, Canada, Russia, Mexico, China, Poland, Spain, India, Korea, Brazil, SA, Colombia Chile & Argentina South Africa is: 2 nd most sophisticated financial market 2 nd lowest effective business tax rate 4 th ranked for ease of accessing capital 4 th ranked i.t.o. the cost of capital 6 th ranked for infrastructure 7 th for FDI as a % of GDP (2008) 8 th ranked i.t.o labour productivity Source: Brazil National Confederation of Industry. Competition Brazil 2010: A Comparison of selected countries South Africa – emerging market perspective

11. In 2011, at 5.5%, South African interest rates are at a 30-year low. The JSE Securities Exchange one of the world’s top 20 exchanges. 1 st for the regulation of securities exchange, strength of auditing & reporting standards by Global Competitiveness Report 2010. 1 st out of 60 countries in the Economist’s House Price index for the period 1997 – 2009. The South African Rand was the 2 nd best performing currency against the US Dollar between 2007 and 2011, in Bloomberg’s Currency Scorecard. Economic Achievements Source: SouthAfrica.info

12. The South African stock market rose 16.09% in 2010, ranking 8th out of the G20 nations and ahead of all of the G7 countries 34 th out of 183 countries in the World Bank Ease of Doing Business 2011 2 nd in the ease of getting credit 2 nd for good practice in protecting both borrowers and lenders 10 th in investor protection 54 th out of 139 countries in the World Economic Forum’s Global Competitiveness Index. 9 th in financial market development 27 th in the protection of intellectual property Economic Achievements

13. 54 th out of 173 countries in the Transparency International Corruption Perception Index 2010 South Africa is a world leader in coal-based synthesis and gas-to-liquid technologies. It is among the lowest-cost producers of ethylene and propylene in the world, thanks to abundant access to low-grade coal and leading-edge process technology. Sasol has flown the world’s first passenger aircraft using the company’s own-developed and internationally approved 100% synthetic jet fuel. Sasol took to the skies with the world’s first fully synthetic jet fuel flight on Tuesday, 21st of September 2010. Economic Achievements

14. Africa is becoming more attractive... Source: Ernst & Young’s 2011 Africa attractiveness survey

15. Investing in Africa: an improving environment The operating environment is improving visibly and rapidly … 54 countries, 35 democracies (compared to only 8 in 1991) Many countries have improved their business environment: restored macro-economic stability greater predictability & increased reliability of policy & regulatory framework increased transparency and improved decision-making privatisation initiatives reduced corruption investment protection & promotion intra and inter-regional initiatives High returns on investment

16. TRIPARTITE FREE TRADE AREA (T-FTA) SADC,COMESA AND EAC (Economic Benefits) T – FTA will create a sizeable regional market with a GDP of $ 624 billion and a population of approximately 700 million people An African common market without internal borders will unleash the economic growth and potential of Africa Developmental Integration leading to cross border infrastructure development to strengthen regional supply capacity North – South Corridor – Cape to Cairo to facilitate trade and reduce cost of doing business

17. Trade Agreements in Africa Source: Ernst & Young’s 2011 Africa attractiveness survey

18. Trade Corridors in Africa Source: Ernst & Young’s 2011 Africa attractiveness survey

19. Africa’s Main Transport Corridors North/South Corridor Dares-Salam To Durban

20. Trans-African Highways

21. Traffic Flows in Southern Africa

22. BRICS (Economic Benefits) Combined GDP of BRICS countries is over $ 9 trillion BRICS will account for 60 % of global growth in 3 years time according to the IMF BRICS-Africa trade is expected to show dramatic gains by 2015, increasing threefold from USD150 billion in 2010 to an incredible USD340 billion. BRIC’s share of Africa’s total trade is expected to increase from one-fifth in 2010 to one-third in five years BRIC’s foreign direct investment (FDI)in Africa is expected to soar to more than USD150 billion by 2015.

23. South African Economy: New Growth Path Vision: Create jobs And to 15 % in the next 10 years 5 million reduce unemployment

24. 24 Industrial Policy Action Plan II Key pillar of the New Growth Path IPAP: value-added sectors with high employment and growth multipliers

25. Industrial Policy Action Plan II 1.Macro-economic policies which support more competitive and stable real exchange and interest rates 2.Industrial financing channelled to more labour-intensive and value-adding sectors 3.Leveraging procurement to raise domestic production and employment in a range of sectors 4.Developmental trade policies such as tariffs and standards deployed in a selective and strategic manner 5.Competition and regulation policies: competitive input costs for productive investments and affordable goods and services for poor and working-class households 6.Skills, technology and innovation policies better aligned to sectoral priorities 7.Deploying these policies in general and in relation to more ambitious sector strategies, as set out in detailed Cross-cutting and Sector KAPs

26. INVESTMENT ENVIRONMENT &OPPORTUNITIES

27. Financial Times data on inward investment shows that South Africa is: 1 st country for R&D inward investment in Africa 1 st country for environmental technology inward investment in Africa 1 st country for ICT & Electronics inward investment in Africa 1 st country for financial services inward investment in Africa 1 st country for creative industries inward investment in Africa 1 st country for transport equipment inward investment in Africa 1 st country for life sciences inward investment in Africa South African – Global Economic Powerhouse

28. South African Trade Agreements South Africa – European Union (EU) Trade, Development and Co-operation Agreement (TDCA) Southern African Development Community (SADC) FTA Southern African Customs Union (SACU) – India Preferential Trade Agreement (PTA) Southern African Customs Union (SACU) - European Free Trade Association (EFTA) FTA Africa Growth and Opportunity Act (AGOA) SACU – Southern Common Market (Mercosur) Preferential Trade Agreement

29. South African Exports 2010 – top 10 R a n k 2010 Country Name Proportion % Total Growth 2009 - 2010 1China11.48%20.28% 2United States10.08%25.26% 3Japan9.08%36.42% 4Germany8.34%31.49% 5United Kingdom5.13%4.20% 6India4.36%24.23% 7Netherlands3.35%-7.15% 8Switzerland3.28%-21.29% 9Zimbabwe2.93%12.53% 10Mozambique2.68%5.53% South African Imports 2010 – top 10 R a n k 2010 Country Name Proportion % Total Growth 2009 - 2010 1China16.89%14.22% 2Germany5.45%11.35% 3United States0.93%7.14% 4Japan17.01%5.34% 5Saudi Arabia-11.01%4.12% 6Iran4.04%4.00% 7United Kingdom2.30%3.81% 8India33.92%3.58% 9France1.58%2.93% 10Nigeria3.10%2.80% South Africa’s leading trade partners Source: Quantec, 2011

30. Investment in South Africa – top 10 2003 - 2010 RankCountryProportion % 1United States17.21% 2Australia13.60% 3UK11.52% 4Germany7.26% 5India6.03% 6Japan5.00% 7Canada4.59% 8Ireland4.59% 9Norway4.06% 10Switzerland3.91% South Africa’s leading investment partners Investment from South Africa – top 10 2003 - 2010 RankCountryProportion % 1Qatar18.60% 2China14.95% 3Ghana14.00% 4Nigeria8.33% 5Canada4.78% 6Mozambique4.64% 7Indonesia4.15% 8United States3.46% 9Seychelles2.70% 10Iran2.56% Source: The Financial Times Ltd, 2011 (www.fdiintelligence.com

31. RankSector Proportion % 2003 - 2010 1Coal, Oil and Natural Gas25.13% 2Metals20.75% 3Automotive OEM8.15% 4Alternative/Renewable energy7.53% 5Communications7.32% 6Hotels & Tourism5.49% 7Real Estate3.00% 8Chemicals2.89% 9Building & Construction Materials2.78% 10Transportation1.89% South Africa’s FDI Composition Source: The Financial Times Ltd, 2011 (www.fdiintelligence.com

32. 32 STRATEGIC GEOGRAPHIC POSITION TO GLOBAL SHIPPING ROUTES

33. South – South Trade Important to the BRICS countries Important to T-FTA - SADC, COMESA and EAC Vulnerability of the Suez Canal Political instability Somali pirates Strategic Location on Shipping Routes

34. 34 Made by SA industrial capabilities Dubai Burj Al Arab

35. Industry & Service Area Customs Secured Area Services Enterprises One Stop Center IDZ An IDZ is located adjacent to a port allowing importation of raw materials, plant machinery & equipment; and the export of finished products; IDZ’s are considered part of the Customs Territory of South Africa. Coega EL RCB JIA Customs Territory of South Africa Customs Controlled Area Industrial Development Zone

36. 36 New Deepwater Port Of Ngqura Inner Basin 16.5 m below CD Entrance Channel 18m 175,000 DWT Bulk Carriers 80,000 DWT Bulk Carriers 9 000 TEU Cellular Containership

37. East London IDZ Multi-Level Car Terminal Containerisation Dry Dock & Ship Repair Grain Elevator

38. 38 Johannesburg International Airport IDZ

39. Richards Bay Idz

40. 40 Aerospace Aviation Village NewAerosud Supplier Park Factory Expansion Future Aviation Cluster Development on State Land

41. SectorSub-sector Agro-processingFisheries and Aquaculture, Floriculture, Fruit and Vegetable Processing Plants, Juices, Meat Processing, Wine Production, Confectionery, Indigenous teas and Natural Fibres. AutomotivesInteriors, Engine Parts/Components, Electronic, Drive Train Components, Body Parts, Aluminum Components and Diesel particulate filters. Chemicals and Allied Industries Titanium Beneficiation Initiative, Fluoro chemicals Expansion Initiative, Polypropylene Conversion. Restructuring of State Owned Chemical Enterprises. Business Process Outsourcing & IT Enabled Services  Call Centres, Back Office Processing and Shared Corporate Services.  Enterprise solutions viz. fleet management, knowledge management, asset management solutions. Electro TechnicalManufacturing of: automotive electronics, microchips and telecommunication equipment. Tourism Hotels and self-catering holiday resorts, Adventure-, Eco-, Sport- Conference- and cultural tourism, gaming, infrastructure development, leisure complexes and world class golf courses, harbour & waterfront developments, transfrontier conservation areas, cruise liners & transportation. Investment Opportunities Source: DTI/TISA

42. SectorSub-sector Clothing, Textiles, Leather and Footwear Manufacturing of Industrial Textiles using Polyester Production of other natural fibre textiles such as flax Wool and mohair production – downstream opportunities for yarns, knitwear and fabric. Footwear – manufacturing of leather uppers. Mining and metal based industries Aluminum smelter capacity, Capital equipment: machine tool manufacturing and petrochemical equipment, downstream processing and value-adding of iron, carbon steel, aluminum, platinum group metals and gold, ferro-alloys, gold and stainless steel. Aerospace, Rail and Marine Aerospace: Rotor and fixed wing aviation equipment and services, Helicopters and aircraft components, Aviation training services for African airlines, IDZ at Johannesburg International Airport, warehousing for aircraft parts. Rail: Rolling stock and services for the domestic market, estimated R7 billion Gautrain which includes infrastructure development and rolling stock, Rail infrastructure of the African continent through NEPAD and Rehabilitation of low density rail line. Marine: Development of boat yards and wet docks/floating docks, Joint ventures with local shipyards, manufacture of boats, yachts, catamarans and fleet racing boats, custom-made vessels (tugs) and training schools. Investment Opportunities Source: DTI/TISA

43. Investment Opportunities SectorSub-sector Capital EquipmentRe-capitalisation of: Forgings & Castings Boilers Tool dies & moulds Expansion & export development Pumps, valves, material handling & straddle crane carriers Mechanised mining New investments in: Turbine assembly Production of turbine components Machine tool manufacturing Film Film studios and post production facilities. Co-production ventures. Distribution infrastructure

44. Incentives IncentiveBenefitMain Conditions 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

45. Incentives IncentiveBenefitMain 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

46. South Africa’s investment environment South Africa today is one of the most sophisticated and promising emerging markets globally, mainly because of … Political & economic stability with sound macro-economic management Competitive sectors/industries Favourable cost of doing business Skills availability World class financial system Excellent transport & logistical infrastructure Abundant natural resources