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

PRESENTATION OUTLINE  Macro-economic Trends  Gateway to Africa  Sectoral Opportunities

 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 Key Messages

Q1Q2Q3Q Q1Q2Q3Q Q1Q2Q3Q Q1Q2Q3Q Q1Q2Q3Q Q1Q2Q3Q Q1Q2Q3Q Q1Q2Q3Q Q1Q2Q3 % change on year earlier% change on previous quarter, annualised Real growth in Gross Domestic Product (GDP) Growth has averaged 4% per annum in the past four years and is projected to increase to 5% for the coming four years. South Africa has experienced 85 months of continuous growth. Economic Growth Macro-economic Trends

Economic Structure South Africa’s economy has diversified away from primary commodities Source: SARB Contribution to National GDP December % share Primary sector (Agriculture and Mining) Secondary sector (incl Manufacturing) Tertiary sector

Focus Areas of the Strategy  Increased macro-economic stability  Increased investment in economic infrastructure  Sector investment strategies  Development of skilled labour  Strengthening the 2 nd economy  Improvement in state organisation and capacity Gearing for Growth Macro-economic Trends

 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 The Gateway into Africa

STRATEGIC GEOGRAPHIC POSITION TO GLOBAL SHIPPING ROUTES OUR LOCATION

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

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 Agro-processing

Business Opportunities 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 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 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 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 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 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 Capital Equipment Competitive Advantage  Access to steel, aluminium  Competitive costs  Engineering technology

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

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

THANK YOU

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