Located at the southern tip of the continent of Africa, South Africa has considerable advantages as a location for doing business. It boasts a strategic location, a favorable regulatory environment, a sophisticated financial structure, a well-developed transportation system, an established manufacturing base, and a sophisticated information technology structure. 

Given South Africa's value proposition outlined in my last article, there are numerous opportunities for marketing and selling consumer and business-to-business products in multiple sectors and in multiple industries. Let us review the global players that have taken advantage of opportunities offered by South Africa:

In November 2010, the Airbus A400M military transport aircraft began its manufacturing operations in South Africa, which is a testament to the fact that South African manufacturers can hold their own with the best in the world when it comes to high-end engineering.

Mercedes-Benz South Africa made a $281-million investment in its East London plant ahead of its manufacture of the next generation C-Class, which will hit global markets in 2014.

Toyota South Africa was established in 1961. For the past 30 years Toyota has sold more vehicles than any other car manufacturer in South Africa and currently holds a market share of about 23%. It has sold more than three million vehicles since its formation and has an annual production capacity of more than 200,000 vehicles.

Vehicle manufacturers such as BMW, Ford, Volkswagen, Daimler-Chrysler and Toyota have production plants in the country. Automotive component manufacturers including Arvin Exhaust, Bloxwitch, Corning and Senior Flexonics have all established production bases in the country.

ABB South Africa, a subsidiary of global power and automation technology group ABB, plans to add business to its process automation portfolio for customers in the mining sector.

Brazilian firm WEG has acquired a 51% stake in South Africa's Zest Electric Group as part of its African expansion strategy. During the 30 years that Zest has represented WEG in southern Africa, it has become the market leader in the supply of electric motors throughout Africa.

Leading telecommunication brands like Siemens, Alcatel-Lucent, SBC Communications, Telekom Malaysia, Cell C and Vodacom have made significant investments in the country. In a bid to exploit South Africa's abundant sunshine and reduce reliance on electricity, Vodacom has launched a low-cost solar-powered mobile phone with the unique ability to charge on the go.

Global retailers entering South Africa include operators such as Pick n Pay, Edgars, Woolworths, ShopRite, PEP Stores and Walmart.

Future Prospects in Select Groups of Industries 

In the electronics industry, investment opportunities lie in developing access control systems and security equipment, automotive electronic subsystems, systems and software in the banking and financial services sectors, silicon processing for fiber optics, integrated circuits, and solar cells. There are also significant opportunities for the export of hardware and associated services as well as software and peripherals. 

There is strong growth in private security industry technology, such as closed-circuit television and digital surveillance equipment, sophisticated access control systems (smart card technology), and IT systems. Many cities have introduced surveillance cameras, and businesses are increasingly updating systems with the latest technology. Home security is another key area. 

The agricultural sector is a mainstay in South Africa's economy and holds many opportunities with both large commercial and emerging farmers in areas such as capital investment, training, equipment and services supply. One of the main areas of growth is the demand from small and medium-sized companies for high-end computer systems. This is set to become a major target for IT companies in the near future. The South African government is also expected to be a major purchaser of software. 

South Africa has always had a well-developed food and beverage industry, partly because of the country's major agricultural activity and partly because of its relatively sophisticated food requirements. A number of multinational companies have formed partnerships with local food companies, and new opportunities have opened up. For example, Nestlé is building two new multimillion-rand factories in Babelegi, a small town in the North West Province, where it will manufacture some of the products it currently imports. 

A September 2007 study by Euromonitor International found that as a growing number of women enter the work place, South Africans are finding it harder to find the time to prepare meals at home. Demand for fast-food restaurants to serve time-strapped families is increasing. With an expanding consumer base and a growing disposable income, South African consumers are prepared to pay premium prices for well recognized international brands.

 

 

 

( linda )21 Dec,2011

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