22907 Export 08/2013

Advertorial

China’s return to Africa

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he China Sourcing Fair will be back in South Africa during 2013 to bring you a comprehensive array of quality products and suppliers from Greater China. Prepare for cost-effective sourcing at the Gallagher Convention Centre, Johannesburg from 7 to 9 November. Whether you’re a buyer in this region or nearby markets, visit the biggest event of its kind in South Africa and meet a big group of export-oriented and competitive suppliers who can offer customised designs, reasonable price points and flexible delivery terms. The biggest China-products exhibition in South Africa boasts vetted and approved manufacturers, many of whom supply well-known international brands. Grab the chance to meet them right in your own backyard!

China sees Africa as important economic partner

Atte Whole ntion Trader sale s, Displa rs and Retai y more le variety rs: innova and co tive, attract of s iv in you t-efficient pr e r store oduct China ...Source at s Sourci ng Fai the r.

Draw more customers to your store with new trends. Boost your competitive edge with affordable products from the co-located shows, including: ·· Electronics ·· Garments and textiles ·· Fashion accessories ·· Home wares ·· Gifts and premiums ·· Hardware and building materials ·· Solar energy and energy-saving products

Pre-register online now for your FREE entry badge to the China Sourcing Fair, South Africa-2013. It takes only two minutes: www.chinasourcingfair.com/southafrica/gse. u

China and Africa, as developing economies in the process of industrialisation and urbanisation, have growing demands for products and technologies and are subsequently investing more in each other. Together these factors will facilitate the continued rapid development of trade between China and Africa. While China is the largest developing country, Africa is the continent with the greatest number of developing countries. China-Africa trade and economic cooperation has not only played a significant role in promoting their respective progress, but has also helped to win the attention and support of the international community to Africa’s development. Currently, China is one of Africa’s most important trade and economic partners. South Africa’s 2011 imports from China rose 23% over the previous year, to nearly US$12 billion. The Fair is well timed to help businesses tap into the growing demand for Chinamade products in sub-Saharan Africa’s fast-rising economy. “Africa’s trade with China is booming,” reiterates Tommy Wong, President of Global Sources Exhibitions. “The expansion of the China Sourcing Fairs in Johannesburg is representative of this growth. “In total, the three-day event attracted 7 006 professional buyers, a 20% growth compared to the same period last year. These buyers were mainly from southern Africa. They saw the trade show as a fantastic sourcing platform that ensured they find suitable suppliers and new products,” adds Wong.

export & import SA // AUGUST 2013

Mammoth proportions: More than 7 000 buyers attended the 3rd annual China Sourcing Fair during 2012

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Editor’s Comment

Your issue is my issue . . . mostly Publisher:

Ken Nortje [email protected]

Editor:

Jodi Newton [email protected]

Advertising:

Debbie Poggiolini [email protected]

Sales manager:

Sophia Nel [email protected]

Jodi Newton, export & import SA Editor

It is refreshing to see an organisation, an industry’s ‘official body’, work hard at making a difference to not only its paying members on golf days and luncheons, but to all, for the greater sector’s benefit, the country’s gain ultimately. That’s what it’s all about, surely.

Production: Johan Malherbe, Meinardt Tydeman, Jenny van Lelyveld, Patrick Letsoela Layout:

Jenny van Lelyveld

Dispatch:

Willie Molefe

Aware of the urgency to find ways in which to make supply chains in this country more competitive in global market places, the South African Shippers’ Council (SASC) earlier this year began a nationwide survey of cargo owners and logistics service providers to ascertain what the most ‘pressing supply chain issues’ in South Africa are, thus highlighting the key issues of concern that need to be addressed on behalf of the cargo owners and/or logistics service providers. The results are in.

Circulation/Subscriptions: [email protected] Subscription rates: Local R340,00 Africa R370,00 Overseas R2 050,00 Published:

The majority of respondents to SASC’s survey were of the manufacturing, mining, agriculture, and transport and logistics sectors. Matters identified in the survey as serious concerns of this country’s operators included the control of the supply chain by corporate heavyweights to the exclusion of new players and the discriminatory pricing policies and strategies of Transnet Freight Rail (TFR). Near to 80% of respondents named the increasing number of toll roads and e-tolling, and infrastructure quality in South Africa, as there foremost concerns. The complete outcomes of SASC’s survey will be revealed in the September issue of export & import Southern Africa.

Monthly

Address: Malnor (Pty) Limited 2 Hermitage Terrace, Richmond, 2092 Private Bag X20, Auckland Park, 2006 Tel: 011 726 3081/2, Fax: 011 726 3017 e-mail: [email protected] www.malnormags.co.za www.exportsa.co.za

Gerrit Prinsloo, Director and Transport and Logistics Specialist at SizweNtsalubaGobodo commented recently that while transport business owners will undoubtedly be faced with the short-term challenge of incorporating the additional cost of e-toll tariffs into their pricing models, they already are and will continue to reap the benefits of increased efficiencies in the transport sector due to the increased road capacity.

BEE compliant

“Because transportation costs increase when the transporter has to budget for inefficiencies due to traffic congestion, the additional capacity on our roads is therefore already benefitting transporters through providing access to increased efficiencies,” says Prinsloo. “So in effect once toll tariffs are implemented, only then are businesses going to start paying for the increases in travel costs which will have already been absorbed by the increased efficiencies provided by the new national road system.” Prinsloo explains that the increased traffic management intelligence from billing data as well as potential data becoming available from the e-toll system will in fact allow transport business owners to streamline their operating models and routes. However despite certain advantages, he adds that business owners still face the grim challenge of having to incorporate the additional cost passed on by transporters into their pricing models without hurting the bottom line or compromising their service levels.

23045 Export 08/2013

“Once SANRAL has announced the finalised E-toll tariffs, businesses will have to move quickly to compare the various advantages and disadvantages inherent in changing their current behaviours. Potential changes to routes, travel times and the location of distribution facilities all need to be taken into consideration, and ways will need to be found to strategically absorb these additional costs into their pricing models. Ultimately businesses need to start thinking smart about travel and transport,” he concludes.

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Have a read of page 4 in this issue and the e-toll censuring of Chris Barry, the Managing Director of Heavy Commercial Vehicle Underwriting Managers. Chris isn’t nearly as confident in government’s clouded e-toll quest. He also shares my alarm at some very strange developments on our roads, the drivers.

Enjoy the issue. Jodi

export & import SA // AUGUST 2013

Officially endorsed by Wesgro and the Exporters Clubs of South Africa – Eastern Cape and Western Cape

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contents

August 2013 // Volume 11 Number 8 ort & Imp w Export Africa is no re u n s r e e h B t Sou le online. port availab Export & Im at to visit thern Africa o.za Sou portsa.c x www.e

Advertorial Time to source as China returns to SA Guest’s Editorial A final word on those e-tolls . . .

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Official Bodies IATTO introduces truly global professional designation for exporters and importers

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Export Agri complex a push for our perishables trade

12 Education Series

Jim Merrington’s introductory guide to international trading

16 Rail Freight

John Batwell’s round-up of developments from across Africa

20 Ports

Bavarian automaker’s dual port export model is working

21 Advertorial

OLG’s Logistics and Supply Chain Management courses

Regulars 2 Editor’s Comment – Your issue is my issue . . . mostly

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 xport & import International – Breaking trade e news from around the globe

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Country Profiles – Paraguay and Senegal

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 rade News – One stop shops, freighter T acquisitions, the citrus debacle, and much more.

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 our complete events calendar – Y 2013’s exhibitions and conferences

export & import SA // AUGUST 2013

On the Cover Page 10

Leading example: Kintetsu World Express projects, boost for KZN

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Guest’s Editorial

Results of The 9th State of Logistics™ survey for South Africa 2012 revealed that logistics costs as a percentage of total GDP have risen by 0,7% to 12,6% in 2011 and are estimated to have risen further to 12,8% in 2012. The impact of e-tolling on the logistics sector alone is huge.

Not yet OUTA it

Written for export & import SA magazine by Chris Barry, Managing Director Heavy Commercial Vehicle Underwriting Managers (Pty) Limited © HCV

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o my mind one of the most damning things about the etolling to our business is that the majority of our clients will suffer. It’s that simple. While I appreciate this is a vested interest, what is not common knowledge is the fact that it’s the corporate transporters that are in a position to add on the e-tolls as they occur – so in fact they are cost neutral – “cost comes cost added”. The majority of my clients are not as fortunate – and if there is a recoupment of revenue it is long after the event and trickles down . . . but at the end of the day I have no doubt that these types of costs (e-tolls, tolls) are purely an additional burden on the small, already-struggling, players. As a hobby I would love to inform our president of some “give me” job creation opportunities but for a government that wants to build SMEs this is a classic example of confusion for me because small transporters are a fantastic SME opportunity. Unfortunately these operators generally get hammered by costs like tolling! Anyway, back to the point. We support OUTA not only because of trucks NOT being exempted by costs, but because as I believe OUTA themselves are simply asking to have transparency of the costing and funding of transport infrastructure. I believe they are purely asking obvious questions in that there is no argument

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over the user pays principle BUT when the paying road users have been milked to death, where is the transparency from government who were given a fantastic transport grid in the 1990s and now a LOT of the secondary route network is fast deteriorating or collapsed?

On another point: Do you remember the trick of learner drivers getting a C licence (rigid) instead of a B? Cynics suggest that it is purely for learners to avoid parallel parking and the similar disciplines in the driving test.

This is not right. I highlight the absurdity of government thinking. Recently there was press comment on a cable car network in the Drakensberg. Great idea! Fantastic! If it is viable or not is irrelevant because this project currently will be scuppered! Why? The Oliviershoek pass would be the “funnel” for tourist busses but it is impassable! This is a typical example! Great “vision” but you can’t get to the site even if the tourists wanted to because of the roads. This project will fail. Furthermore, as I am a proponent that we have not unlocked our tourism potential, this collapsed road has all but caused the hotels and other tourist facilities to disappear along this road. A sad case indeed. Realistically we cannot have all the national roads in pristine condition. Saying that, however, road users shouldn’t then be expected to pay ridiculous fees when the rest of the country’s roads vary between good and very bad. I think it is fair to say that, overall, our roads are deteriorating.

Somebody asked me recently: what is this “new car” “L” sign on the back window to highlight? Is this a similar trick? I am not alone in observing that often these cars have a single driver’s L sign (placed mostly on new cars). The giveaway is the lack of driving skills! I know I am generalising but there seems to be a lack of policing if our hunch is right! I quote the Automobile Association (AA) that road accidents cost this country around R157 billion a year! If the government were to restore credibility on e-tolling, road safety or any such plan, the quickest way to do this in my opinion would be to release: (a) A plausible, achievable (inter) national transport plan covering road, rail all the modes. (b) Clear standards on road behaviour, enforcement (c) Plans for public-private partnerships to do roadworthiness and licensing tests. In other words; walk the public through the plans. I am sure the government would be surprised at how much buy-in they might get instead of shooting the messengers such as OUTA. u

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Official Bodies

IATTO introduces truly global professional designation for exporters and importers

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o you hold an ITRISA Diploma in International Trade Management – or a SAFTO IEX Diploma in Export Management issued pre1998? If you do, you could be eligible for the global professional designation that has just been introduced by the International Association of Trade Training Organisations (IATTO) for those involved in export or import. The World Trade Professional (WTP) designation is available to individuals who hold an IATTO-certified qualification, have a minimum of two years related work experience, and who commit to a Continuing Professional Development (CPD) programme and a specific Code of Conduct. Those qualifying for the new designation will be entitled to use the letters ‘WTP’ after their names to identify their global professional status.

With IATTO’s membership spanning all the major trading nations of the world and many minor ones as well, the designation has attracted interest around the world. It will be officially launched at the Association’s upcoming annual forum in Thessaloniki, Greece, in September. Around 300 international delegates are expected to attend the event. The WTP is the culmination of many years of collaborative research and debate conducted by IATTO. IATTO was founded in 1974 as the ‘International Association of Institutes of Export’ (IAIE) at a gathering in France attended by the UK, Chile, Finland, Western Germany, Italy, Sweden, Japan, Australia, Hungary, the International Trade Centre (Geneva) and the World Trade Centre movement. The concept of an international association of entities responsible for education and training in international trade was triggered by the growing conviction that such a body could play

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Delegates at the 2012 IATTO Forum hosted by the Marketingi Instituut in Tallinn, Estonia

an important part in increasing the efficiency of trade and commerce between the various nations of the world. South Africa, then represented by the SA Institute of Export, applied to join the IAIE in the mid-1980s having discovered its existence while researching the activities of Institutes of Export in Europe at the behest of the Department of Trade and Industry. The IEX was only granted institutional membership status in 1991, however, when the country’s unpopular apartheid policy was perceived to be on the wane. By 1994, South Africa was not only represented on the Board of the IAIE, but was heavily involved in its efforts to develop an international accreditation system. Not surprisingly, the IEX’s threeyear export diploma programme was closely aligned to the new global minimum standards and, when the IEX’s management team left SAFTO to establish ITRISA in 1996, they made sure that the global standards were also incorporated in ITRISA’s three-year ‘Diploma in International Trade Management’. When SAFTO collapsed in early 1998, the IEX lost its accredited provider status; ITRISA, however, by the end of 1998, had taken its place in the international arena. From 1998 to 2004, ITRISA chaired the IATTO Board and has since 2004 remained at the helm of IATTO’s Accreditation and Certification System. At the annual conference in 1994 hosted by the South African Institute of Export in Cape Town, IAIE members voted to change the name of the body to the International Association of Trade Training Organisations (IATTO). The motion was supported because the operations of many members extended beyond exports, to imports and international business operations; and in addition, the Association’s membership body had grown to include a number of colleges and universities which were not recognised Institutes of

Export. Furthermore, a number of members offered short training courses rather than lengthy education programmes. In 2000, in the Hague, Netherlands, accreditation once more came under the spotlight, partly because of the immense workload burdening the Accreditation Committee, a group of volunteer members tasked with the evaluation of member programmes against specified criteria, and partly because of the considerable expense incurred in its operation. On the one hand, the Secretariat was required to despatch heavy packs of applications around the world to the various Accreditation Committee members; on the other, members were obliged to have their study material, assessment tools and promotional materials translated into English prior to submitting them to the Committee with their accreditation applications. A new accreditation formula was presented to, and unanimously accepted by IATTO members at the IATTO AGM held in Istanbul, Turkey, in 2001. The new system placed the emphasis on the accreditation of providers rather than programmes/qualifications; delegated the responsibility for monitoring and supporting accredited providers to appointed IATTO agents in various countries; and introduced IATTO ‘qualification levels’. The system has now evolved to incorporate the certification of national programmes and the introduction of the globally recognised professional designation, the World Trade Professional (WTP), for individuals. South Africans are at an advantage because of South Africa’s contribution over the years to the international system. Eligible individuals are encouraged to contact their alma mater ([email protected]) or the international Association at [email protected] for more information. u

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22960 Export 08/2013

Export The recent opening of a 4 200 m2 agriculture facility and fresh produce distribution centre at the Dube TradePort in KwaZulu-Natal completes the first major phase of the Dube AgriZone development – creating South Africa’s most technologically advanced farming area – which is likely to have a significant impact on South Africa’s agriculture produce and exports thereof. Dube AgriZone is now home to the largest climate-controlled growing area under glass in Africa Opening the new facilities at the Dube TradePort: Mr Michael Mabuyakhulu, MEC for Economic Development and Tourism said KwaZulu-Natal’s agricultural sector should embrace advanced farming methods in order to ensure competitiveness and to meet and exceed future produce demands

Nudging KZN fresh produce, SA’s agriculture exports

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he facilities will stage, process, package and distribute fresh produce grown both within Dube AgriZone and on behalf of farmers in the agricultural environs surrounding Dube TradePort. The new agricultural facility aims to produce more than three million plantlets a year, expanding to five million in future, and is set for the export of young plants across the world and the supply of material for local farmers, whilst the highcare fresh produce value adding distribution centre is the first of its kind in KwaZulu-Natal and few in South Africa. The developments aim at ultimately advancing farming methods here in order to ensure competitiveness and to meet and exceed future produce demands, say officials. Dube AgriZone is home to the largest climate-controlled growing area under glass in Africa and has been especially developed to promote agricultural products with a short shelf-life and which may require being flown immediately to a range of market destinations. Farmwise Marketing (Pty) Limited delivers the vital expertise in utilising a series of ripening rooms to ripen pre-harvested produce, so ensuring rapid and timely responses to the demands of the market. The company is responsible for the ripening, processing, packaging and distribution of fresh produce from both Dube AgriZone and farmers in the surrounding areas. Dube TradePort Corporation Chief Executive Officer, Ms Saxen van Coller,

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said: “The intensity of business competition and the ever more discerning requirements of consumers around the world demands an ability to speedily deliver product to market and to meet exacting specifications.” The Farmwise Packhouse and Distribution Centre, which employs the highest standards of hygiene and which has created some 100 new employment opportunities, has already secured a number of local markets. “This certainly gives us a competitive advantage and allows us to better serve our clients across the country, explains Raymond de Costa, Managing Director of Farmwise. “The variable cold storage facility available here has enabled us to become a staging facility for a number of our suppliers across the country. The facility is also certified under Global Gap and HACCP and that, along with our close proximity to King Shaka International Airport, has enabled our operations to be of further benefit to our clients, who may now take advantage of the vast opportunities for export from our packhouse, value adding and distribution centre.” Frikkie van Niekerk, Produce Technologist: Woolworths added: “Its such a privilege for Woolworths to be associated with such a world-class facility, through the great supply base that we have got; we currently have three suppliers (that are based within the Dube AgriZone) Farmwise, Qutom farms and Carmel Nurseries. I can truly vouch that the crops that come out here are the cream of the crop in this country.”

Dube AgriLab has an Intellectual Property Agreement with the Sugar Cane Research Institute (SCRI) and is working in close cooperation with the SCRI to ensure good crops and high yields for the benefit of KwaZulu-Natal cane farmers. It is also collaborating with roleplayers in the banana industry. Mr Michael Mabuyakhulu, MEC for Economic Development and Tourism emphasised that the aim is to eventually expand such collaborations. “It (the laboratory) has the ability to produce plant tissue material locally, instead of having to import plant stock. This facility has the ability to develop and refine protocols in-house and the capacity to produce most plant types.” Mr Mabuyakhulu envisaged that Dube AgriLab would be “perfectly positioned” to undertake complex research and development work within the next five years and said he believed that Dube AgriZone, with its additional new facilities, provided a model agricultural environment and supply chain system. “This will go a long way towards positioning KwaZulu-Natal at the very forefront of cutting-edge, future farming methodologies and techniques in South Africa,” he added. The laboratory is willing to consider requests from local professional growers and farmers, which would enable Dube AgriLab to maximise its capacity, potentially expanding to produce up to five million plantlets per annum. u

export & import SA // AUGUST 2013

19470 Export 08/2011

On the Cover

The KwaZulu-Natal province looks set to benefit from KWE’s recent completion of a new warehousing facility for a leading producer of biopolymers

Opening new doors for KWE, KZN: the tank farm’s completion is likely to see several new service opportunities open in terms of liquid storage and handling in KwaZulu-Natal

Kintetsu World Express developments, company progression “. . . aimed to design a building that would accommodate all LTSA’s requirements as well as other strategic initiatives that KWE was embarking on.”

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n line with several strategic initiatives underway by the company currently, integrated global logistics company Kintetsu World Express (KWE) has implemented a new facility in Mobeni, KwaZulu-Natal during April which will accommodate its tender project with biopolymer producer LignoTech South Africa (LTSA). KWE secured a two-year agreement with LTSA in October 2010 to provide warehouse storage and handling services for the company, notes KWE’s General Manager: Warehousing, Kevin Higgins. “The original contract comprised a period of two years with completion set for 2012,” explains Higgins. “However, towards the end of 2011 LTSA approached KWE and requested warehouse capacity to accommodate

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a storage volume of 9 500 tons of cargo, an undercover loading and offloading area and the availability of at least six container docking bays at any given time.” A facility of these specifications had to be within close proximity to both the Durban port and Umkomaas in KwaZulu-Natal, where the company manufactures and transports its goods. Needless to say, the development had to adhere to a clearly defined budget too. Higgins adds that, when LTSA approached KWE with the specifications, its warehouse facility in Jacobs was 8 300 m² with the ability to accommodate only 6 500 tons of LTSA cargo, rendering it unable to accommodate the volume of 9 500 tons of cargo. KWE’s contract with Jacobs was valid

until July 2013, requiring it to source a tenant to take occupation of its old facility and source a new one. To ensure a facility large enough to accommodate LTSA’s specifications, Higgins managed to source a development project in Mobeni, comprising the redevelopment of a portion of the Seardel Textiles property in that area. “While an original concept was already in place, we aimed to design a building that would accommodate all LTSA’s requirements as well as other strategic initiatives that KWE was embarking on,” says Higgins. Higgins points out that the company not only needed to ensure that LTSA’s needs were taken care of but also ensure that all of its infrastructure

export & import SA // AUGUST 2013

On the Cover

requirements were met with the necessary parameters and fell within the tight budget constraints.

service opportunities in terms of offering liquid storage and handling services as well,” he concludes.

and the like, and provides services tailored to suit specific needs of customers.

“After several design meetings we agreed to keep the budget within scope and managed to negotiate a mutual agreement, whereby we fell within the budget allocation of LTSA, KWE as well as the facility developer.

Founded in 1996, KWE South Africa was the first local subsidiary established in South Africa by a Japanese forwarder. The company is engaged in air freight, sea freight and logistics businesses, and has nine bases and six warehouses in the four major centres (Johannesburg, Durban, Cape Town and Port Elizabeth). The company has seen its logistics business expanding mainly for aircraft and related parts, electronic parts, automotive parts, industrial materials

KWE South Africa operates warehouses at two locations in Durban. Following an increase in volumes at the Durban Warehouse, the company recently relocated the warehouse together with the office and expanded the facilities (warehouse size increased to about twice as large as the previous one). The relocated Durban branch office and warehouse are conveniently located 8 kilometres away from the Port of Durban and only some 12 kilometres south west of the city centre.

“We presented the solution to LTSA and they were impressed by the design and the pricing model, so in addition to handling LTSA’s dry products they required that we also handle their liquid products,” he says. In consultation with LTSA, KWE was granted permission to construct a tank farm on the warehouse site – still within the parameters of a strict budget. “Following a thorough research programme we managed to source a manufacturing company that could manufacture the tank according to the specifications, which comprise two 500 m3 stainless steel tanks, a weighbridge, agitators and a heating facility,” Higgins notes.

Contact the KWE team: Tel : 27 11 573 5700 Fax: 27 11 397 2072 E-mail: [email protected] Visit www.kwe.co.za

The tank farm also required pumps and associated piping for the offloading and loading of road tankers, flexi tanks and iso tanks, a raised pump suction about 1 metre above tank flow, a flow meter and other auxiliary equipment needed for a complex facility of this type. Higgins notes that KWE also managed to source a weighbridge service provider and after negotiations with suppliers managed to adhere to the budget parameters. “After much negotiation with LTSA, we finally extended contracts in July 2012. The new warehouse facility in Mobeni was fully operational by April this year, while the tank farm is now nearing completion. This process is extremely complex and we have had to work with many different local municipalities to get approval for the tanks and operation thereof,” Higgins points out. “We are extremely proud of our achievement on the new development and believe that this has opened other

export & import SA // AUGUST 2013

Proud of the team’s hard work: KWE’s General Manager: Warehousing, Kevin Higgins, goes through the controls to the new facility

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Education Series

Global trade: the what’s, why’s and who’s Part 1 of 4 Written for export & import SA magazine by *Jim Merrington, Exit (www.exit.bz)

into those that make things and those “ The world is divided that make things happen ” GDP and international trade

International trade is growing faster than the global Gross Domestic Product (GDP). What does that mean? Ultimately, all the economic regions of the world add to the global GDP, but what is happening in the manufacturing industry worldwide is that if a local manufacturer is not getting into exports and thus creating imports for another economic region, then their commercial value as a local business is not increasing as much as if they exported and by the trends that are showing, they could go out of business. To put it another way: let’s say that the average rate of GDP growth in an economic region is 3% per annum (P/A) and the average rate of international trade growth in that same economic region is 4% P/A. To break this down, let’s say imports increased by 1% and exports increased by 3%. What would that tell us? It would mean that 1% of the GDP growth is coming from the domestic economic activity and 2% of the GDP growth is coming from those that are exporting. All this would tell us that growth is coming from international trade, and more manufacturers are now exporting. This means that the international trade ‘profession’ is continually becoming more important with many companies

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now making more money on the international markets than their local markets. Simply put: it’s just like having some extra knowledge to cover; like having to fix your own car, whereas, with some guidance, anybody could replace a part to get the car going. A Japanese car is sold in every country in the world. If the Japanese company tried to make the best car for Japan only, then they would not have had the worldwide revenue to stay competitive in the car manufacturing industry, and ultimately failing. The Japanese people would not have bought an out-of-date techno car just to support their local manufacturer. You either stay in the top half in the world business game or you may be on your way out of the market. When you begin to operate internationally you also start to reap the benefits of international finance, knowledge, skills labour, markets (buying power) and costing. In poor countries the food bill is an individual’s major cost whereas in wealthy countries food is their minor cost, so those wealthy countries can take big markups on food, like eating out or going for takeaways. The poor countries can manufacture anything that the wealthy countries want to spend their money on; they don’t even need to have the

resources . . . the trader just needs to ship that product in. Sweden produced the SAAB car. The SAAB company began manufacturing airplanes in 1945 and brought out their first car in 1949. SAAB was the first car manufacturer to introduce a turbo charger, but, because of strong competition in the international trade game, SAAB has closes its doors, now history. Despite making a good car, the company didn’t ‘have’ the international presence to stay in the game. People living in Sweden don’t even have to buy the SAAB. Poorer countries, in order to survive, are forced to work with exporting. The wealthier countries, with large unemployment figures, could absorb those people if the manufacturers started to play professionally in the international trade market. What made Johannesburg the financial strong house of South Africa was its gold mining industry. Men and women flocked from around the country to get a job in JHB, but the mines could only employ a certain amount of people. The men, too ashamed to go home and tell their wives that they could not get a job on the mines to page 14

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22908 Export 08/2013

Education Series from page 12: Global trade: the what’s, why’s and who’s

offered themselves as cheap labour to the manufacturing industry. That’s exactly why JHB grew; cheap labour makes for producing cheaper products. More and more of what you see on the shelf in your local store is being produced by an international trader – either a local manufacturer involved in exports or a distributor involved with imports, thus forming this global village of trade. The largest organisation in the world to help you into this arena is the Chamber of Commerce. At the end of this series, you will see why. International trade today accounts for about 60% of the value of everything produced in the world. In 1960 that figure was only just above 20% and economists forecast that the percentage of international trade will reach just below 80% by 2030, which should be almost at its maximum if you take the 80/20 rule (Pareto Principle) into account. For the young people working today, 2030 is not far off, considering that it takes us on average about ten years to become competent in an industry.

. . . we first need to “learn more on how

What I’m getting at here is that any organisation that does not get into international trade will be a small company, or non-existent, by 2030. How old will you be in 2030? We generally take 20 years to grow up, and then the next 20 years we use to learn how things work and the last 20 years we work for money. A small business only makes small money and as such cannot afford to employ graduates, an MBA. Today we need good educated expensive people to keep our business in the business game.

international trade works and how to best use all the modern tools available to us . . .

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someone else giving you a big smile while taking your money. International trade is the ‘making things happen’ part of the game, and an industry all its own.

To manufacture something in one country brilliantly doesn’t require the same knowledge that is needed to make that thing land up in a store and get sold in another country. The knowledge of international trade is a profession on its own, and as with any profession, it becomes more ‘professional’ over time. Professional would be classified as to how the top 20% of people do something, making good money from something and able to afford good staff – like the top 20% of soccer players in the world: if your club can’t afford them then you need a brilliant trainer. Let’s take a look at some more trade terms.

You may have to be a very bright person to build a bridge, but you don’t need to be as bright to drive over the bridge. You just need to be careful: a bridge isn’t the best place to lose control of your car, motor bike or truck and trailer! Over the years I have visited several companies that used to manufacture but today they only sell the product internationally. They have completely outsourced the manufacturing part and are now a much more financially stable company.

When you look at the things around you: cars, houses or an airline jet flying over you, all these things are built with knowledge. To use or operate those things requires a different knowledge. You could get the most brilliant engineer that could have built an airline jet but the same engineer may not necessarily be able to fly the thing! You could be the best kitchen designer in the world but might not be able to cook.

You may have to be a very bright person to stay ahead in the competition of manufacturing products, but you don’t need quite the same intellect to move cargo over the international trade bridge. Moving products and payments is not a competition, you just need to be careful and know what you are doing. An international trade bridge is the wrong place to lose control of products and payments (PP).

The world is divided into those that make things and those that make things happen. The project manager at the aeroplane factory makes things happen. In the fast food sector there is somebody flipping the burger and

Products continue to develop and are shown up as an improved model. Trade, however, is a skill, like a medical surgeon possesses a skill to operate. Sure, the tools we are using medically continually advance but the skill is the same it was more than a generation ago. Doctors just needed to learn more about the human body. The same applies to international trade: we just need to learn more on how international trade works and how to best use all the modern tools available to us. For example those people whom are now trading internationally, over Skype.

GDP of the World

International Trade over 70 years

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Trade Principle:

The basic principle in any form of trade is “Know your sellers and find your buyers”. This means that you need to know a good supplier, with the best reliable quality for the price range, or you must have a business in place that knows how to find good suppliers. You need to find buyers; these are the people that can afford to pay you. Most people are open to a bargain or a perceived bargain as it is not much work to resell a bargain, but not many buyers can work on market competitive mark-ups, only the true buyers can do that.

Products and Payments:

In order to make things happen, every business today is involved with a network of businesses. If one of the suppliers to the end producer fails in their quality of their product (like the good restaurant got in some bad meat from a supplier) to make up the end product for the seller, then that deal could be at a loss and if the importer is not paid by a local buyer (like the person eating in the restaurant whose credit card did not work) then the importer may not be able to pay the exporter (the supplier of the meat), so good

export & import SA // AUGUST 2013

Education Series products for the buyer and good payments for the seller are the main things to look at. Now with just these two words, Products and Payments stretched across this international trade bridge from one country to another country would go through international trade type risks that start with the letter C. In the local market we only have one C but with the international market we have two additional Cs – making a total of 3Cs to understand with international trade risks.

Companies and Chambers of Commerce

When you observe people watching sport, you can see that many of those people become very emotional. Why is that? In the words of Joseph Cubby: “Games is a serious business and business is a serious game, one is measured in points and the other in profits”. We all become emotional when someone messes up our profits. A good referee (CoC ) just adds importance to any game. The CoC works at all levels with businesses and authorities locally,

nationally and internationally (ICC). So, in essence, all the CoCs are like a Business Buddy Body (BBB), keeping professionalism in the game of business. You only need to belong to one CoC in the world to get worldwide credibility. It is far safer to deal with a foreigner if they are members of the CoC in their own country. In part two of this series we’ll take a look at Arbitration. u

About the author: Jim Merrington started working in the port of Cape Town in 1975 as a cargo controller. By 1980, he had moved to the Port of Durban on a promotion as a senior cargo inspector and promoted to manager during the mid-80s. By 1990 he had moved over to “the shipping company” as a ships operator. In the mid-90’s Jim began teaching shipping as a hobby for training companies and, by 2000,  had bought a training franchise which he ran part time. In 2003 Jim’s ‘hobby’ and love of teaching became his full time ‘obsession’. 

23044 Export 08/2013

The local market “C” are the Companies – Not company to consumer but company to company. With international trade it is more difficult to know where the good or bad companies are. For one thing, a bad company is not going to belong to the Chamber of Commerce. As a worldwide rule, the Chamber of Commerce (CoC) runs on one rule, “if the company is caught out, they get kicked out”. Bad business people don’t like to get the lights thrown onto themselves, and to get “black listed” by the CoC would be a difficult one to recover from.

Before we get into the other two Cs let’s just deal with this word “Companies” and the role of the CoC. If you wanted to minimise your risks in business, then the CoC is the first place to start. The CoC is like a worldwide government for businesses with a head office in Paris (ICC) and branches all over the world which facilitate business in a standard way, with good standards. It would be like appointing a referee between business transactions. The first CoC opened during 1599 in France. There are two things that spread fast around the world: one is bad news and the other is good ideas. Today, the CoC is a worldwide non-profit organisation (good idea), run by boards (another good idea).

export & import SA // AUGUST 2013

15

Rail Freight

Regional rail round-up Written for export & import SA by JM Batwell South Africa

Swaziland

Delay in Transnet procuring Chinese electric units

Delay in start of construction

In July it was reported that South Africa’s Public Protector Thuli Madonsela had been pulled into a probe as to why Transnet Freight Rail’s procurement of electric locomotives from China South Rail’s (CSR) Zhuzhou Electric Locomotive Company had been delayed. The argument was that CSR indicated at the time of securing the R2,6 billion contract that it had a prototype unit already up and running which would only require engineering adjustment for Transnet’s purposes. The initial prototype locomotive, class 20E, was due on South African shores by January 2014. However, an engineer in charge of the prototype design and assembly in China had indicated that this deadline was unachievable since no existing prototype was available and work was still not completed on the specific designs for the South African order. The motive power contract was signed with an emphasis on the deal being pursued in line with South Africa’s commitment to doing business with Brics bloc partner countries. The delay in landing a prototype unit in South Africa was thought to be as much as six months into 2014. The original deal saw CSR producing 10 units and the remaining 85 units of the order being assembled in South Africa by Transnet Engineering (TE). A CSR Zhuzhou Company director denied in the local print media that there was any such delay in getting out the prototype timeously – in fact, photos of the prototype unit on the factory floor were seen in August.

Angola CFL U20Cs in South Africa

During the first week of July, four CF (Luanda) diesel units of the General Electric U20C type were accounted for at Africa Rail & Traction Services’ (AR&TS) workshops in west Pretoria. Two of the 1967-built locos were in the shops – Nos. 104/111. Nos. 105/125 were sitting behind the workshops whilst AR&TS awaited payment from the owners prior to undertaking their rehabilitation. CF (Luanda) runs from Luanda, Angola’s capital on the Atlantic seaboard, to Malange – a distance of 424 km – whilst a branch line comes off at Zenza heading 55 km to Dondo.

One of four Angolan U20C model diesel locos sent to African Rail & Traction Services’ workshops, Pretoria, is seen awaiting despatch in July (Image: J Batwell collection)

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Swaziland is confident it can raise the R9 billion it needs to fund its share of the construction of the new rail line between Lothair in Mpumalanga and Sidvokodvo before construction starts next year, Swaziland’s Public Works and Transport Minister Nthuthuko Dlamini announced in July. The new line will remove general freight cargo from the export coal line, which will boost coal export capacity by 15 million metric tons a year according to Transnet. It is now projected that construction will only begin to take place in the third quarter of 2014. An environmental impact study and the relocation of people in Swaziland are issues still requiring attention.

Zambia/Tanzania Copper movement

During April and May, the Tazara system reportedly moved more than 15 700 tons of copper to the port of Dar es Salaam in Tanzania. The Zambian consignors were Konkola Copper Mines (KCM) and Impala Warehousing and Logistics. Zambia Railways Limited (ZRL) operated seven trains loaded with a cumulative total of 7 440 tons of copper from Impala’s warehouse in Ndola and eight trains carrying 8 293 tons of copper from the Kitwe and Chingola plants of KCM. These were handed over to Tazara for onward conveyance to Dar es Salaam. Tazara acting managing director Ronald Phiri says collaboration between Tazara and ZRL is working well. His records show that a total of 39 068 tons of freight was moved by Tazara between April and May 2013, of which 40% (15 733 tons) was copper and the rest other commodities such as maize, fertiliser, fuel, cement and “mixed goods”. These positive results were achieved despite disruption lasting nearly two weeks following an accident in April. However, according to Phiri, Tazara’s situation is precarious due largely to the shortage of diesel locomotives and wagons and the inability to generate sufficient revenue to fund operations.

Tazara management is concertedly trying to improve rail tonnages on the Kapiri Mposhi-Dar es Salaam run (Image: J Batwell collection)

export & import SA // AUGUST 2013

Rail Freight Democratic Republic of Congo RRL motive power heads north to SNCC

RRL Grindrod in South Africa last year bought a batch of 62,5 ton locos built by GM-Clyde (GL18C) for very light axle-load (10,4 ton) rural branch-line use in Australia’s Queensland. The former QR National locomotives are off to Société Nationale des Chemins de fer Congolais (SNCC – the state railway in the Democratic Republic of Congo – DRC) as part of a leasing/sales package funded by the World Bank. Fitted with 1 000 hp EMD 8-645 engines, they are likely to be used on shunting and trip work. For main line use, RRL is supplying ex-Queensland 2600 series locos which are being renumbered SNCC 2201 upwards. Pre-despatch to Lubumbashi, RRL tested the diesel units in Welkom. Nine locos were moved from South Africa in a single train to the DRC in late May – these included three ex-Australian electric units.

infrastructure challenges that have delayed companies meeting their export targets.

Kenya Nairobi-Mombasa line repaired

Rift Valley Railways (RVR), the concessionaire operating the 2 352 km Kenya-Uganda metre-gauge railway, has recently completed a ten-month project to repair a 73 km stretch of the 530 km Mombasa – Nairobi main line. Nevertheless, the Kenyan government is dissatisfied with RVR’s performance in the country overall. RVR’s executive vice-chairman Mr Brown Ondego says the repairs, carried out by several small Kenyan contractors, included laying 10 000 sleepers to improve track geometry and safety. The US$19,8 million investment in rebuilding this stretch of railway is a significant milestone as this line had been ailing for lack of investment for over a decade prior to the concession.

Uganda Tests on revitalised line

RVR expected to begin test operations on its northern Uganda branch from Tororo near the Kenyan border to Pakwach on the northern shore of Lake Albert by the end of July, 18 years after services were suspended. A US$2 million rehabilitation project carried out by Kato Contractors, Uganda, had been nearing completion and RVR Group CEO Mr Darlan De David said that he expected trial runs to begin on 31 July. The works have included removal of anthills, restoration of washed-out sections damaged by flooding, and the installation of new culverts. The final task was the reinstatement of five level crossings on the western section of the line between Lolim and Pakwach. The line is expected to carry freight from neighbouring countries including the Democratic Republic of Congo and South Sudan to Nairobi and Mombasa in Kenya. u Three GM-Clyde (GL18C) diesel locos out of RRL Grindrod, Pretoria, head for the Democratic Republic of Congo on lease (Image: J Batwell collection)

Mozambique Train movements halted by Rio Tinto

In late June, Rio Tinto suspended using the vital Sena Line that it and other mining companies operating in Mozambique rely on to export coal in the wake of threats made by former rebels to sabotage the network. Renamo, which fought a 15-year civil war with the governing Frelimo party, was blamed for several attacks in the central Sofala province, after it had threatened to disrupt the Sena Line and roads in the area. The single-track line had not actually been targeted, but it is the only rail network available to mining companies operating in the north-western province of Tete to transport their coal to the Indian Ocean port of Beira. Rio Tinto stopped train movements in order to assess the situation. Rio produces thermal and coking coal from its Benga mine in the Moatize basin and has been transporting eight to nine trains of coal per week, each ferrying 2 500 tons. Vale, the Brazilian company that is the other main coal producer in Tete, continued using the track but had increased security. Renamo information chief Jeronimo Malagueta was detained at the time. Locals feel aggrieved that they have seen little or no benefit from the country’s natural resources boom. The threats by Renamo are the latest setback to coal miners operating in Mozambique as they have faced massive

export & import SA // AUGUST 2013

Test operations on northern Uganda’s branch railway from Tororo to Pakwach were scheduled to get under way at the end of July (Image: J Batwell collection)

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export & import International

New reefership design

The Netherlands – What has been described as a “radically new reefer ship design” will be unveiled during September at the Cool Logistics Global 2013 conference in Rotterdam. The concept is believed to combine a horizontal pallet handling system with lo-lo features for containerised deck cargo, record handling speeds are expected be achieved in ports. According to the designers, Reefer Intel, the new ship will be able to compete on costs both with existing reefer carriers and container lines. Meanwhile, China’s Yantian International Container Terminals recently welcomed the goliath 18 000 20-foot-equivalentunit Maersk Mc-Kinney Møller Triple E vessel.

Stop on NZ dairy imports serious

New Zealand – China and Russia have stopped importing some New Zealand dairy products following a botulism scare in that country. A CBC report said hundreds of tons of infant formula other products sold in seven countries could be tainted after tests found bacteria in whey protein concentrate that could cause botulism. Dairy and other agricultural exports power the country’s economy, and China is its single biggest export market.

Mozambique and Thailand strengthen ties

Mozambique – Mozambique and Thailand have agreed to a series of measures to strengthen bilateral cooperation. The accords cover technical cooperation, diplomatic visa exemptions, hydrocarbon development, economic cooperation and tourism. Currently, trade between the two countries stands at US$180 million a year. Thailand has two major stakes already in Mozambique’s developing economy. The Thai state oil company PTT holds an 8,5% share in the Rovuma Area 1 exploration zone, off the coast of the northern Mozambican province of Cabo Delgado. The area contains at least

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80 trillion cubic feet of natural gas. Meanwhile, a Thai company has bid in the tender for the construction of a new deep-water port at Macuse in Zambezia province. In recent years, Mozambique has imported an average of about 200 000 tons of Thai rice annually.

Kia growth

Slovakia – Kia Motors in that country recorded a 6% year-on-year increase in output – producing 158 900 cars at its Zilina facility during the first half of 2013. The plant is now operating at full production capacity for the first time. Kia Motors Slovakia says it has produced more than 253 200 gasoline and diesel engines for the first six months of 2013, a 6,7% increase over the same period last year. The majority of cars, says the company, were exported to Russia (24%), the UK (14%), Germany (9%), France (5%) and Italy (5%). Almost 1% of output is sold in Slovakia.

Yahoo for DHL

Hong Kong – International express delivery company DHL has been awarded the Yahoo! Emotive Brand Award in Hong Kong recently. This brings the total number of external honours won by DHL Express since January 2013 to 163 in more than 48 markets. On another note, DHL recently appointed Marc Bernitt as Head of Customs Management for DHL Freight.

Air freight update

Geneva – The International Air Transport Association (IATA) released June figures showing a 1,2% year-on-year expansion in global air freight demand. Although weak, this is an improvement when compared to the 0,9% year-on-year demand growth recorded in May and the 0,1% growth realised over the first half of the year. From May to June, global freight volumes increased by 0,8%. African airlines recorded relatively slower growth in June, up 2,4% on June 2012. This lags the year

to date trend of 4,3%, which is the second best of all regions.

Red dot for Linde

Aschaffenburg – Linde’s R14 – R20 reach forklift trucks were awarded the internationally renowned “red dot design award” in Essen, Germany. A high-ranking panel of judges from around the world was impressed by the truck design with its dynamic shape and eye-catching colours in black and classic Linde red. The judges’ decision to present Linde with this award demonstrates the high value they place on the visual development of the truck from a traditional work machine to a customised, highly agile and powerful high-tech industrial truck: “The R-series reach forklift trucks are designed as a sophisticated work space and provide an exceptional level of quality.”

Sustainability blueprint for Africa?

Apapa, Nigeria – Five new eco-friendly rubbertyred gantry cranes (RTGs) will soon be delivered to APM Terminals Apapa as part of a US$135 million terminal upgrade, said a Green Port report. Another five will be delivered in November enabling the terminal to convert from the use of reach stackers to a more efficient and safer RTG system. The ten advanced eco-RTGs are being manufactured by Konecranes in China and are equipped with a laser stacking profiling system which reduces the risk of loaded containers being knocked off of stacks. APMT says that these RTGs will be among the first in the world to offer this type of technology.

Mzuzu-Nkhata Bay Road rehabilitation begins

Malawi – The MzuzuNkhata Bay Road Rehabilitation Project in Malawi was launched in July. The project involves widening of the 46-kilometre road between the northern city of Mzuzu and Nkhata Bay district, from the current 4,2 metres to 6,7 metres and construction of an asphaltconcrete surface with 1,5-m sealed shoulders. The African Development Fund has financed the project.

export & import SA // AUGUST 2013

23015 Export 08/2013

Ports

Automaker’s dual port export model

Total BMW vehicles exported will more than double from 33 000 to almost 70 000 vehicles per year

I

“increases the total number of vehicles exported through Transnet channels in Durban by almost 20 000 vehicles or 60%”

n an effort to facilitate its expanded export programme, BMW South Africa has implemented a dual port export model as part of an integrated southern African supply chain. Historically, the Bavarian automotive manufacturer has exported only from the Durban port via Transnet, but as a result of increased production, the company has sought out an additional port to facilitate its export logistics. BMW 3 Series sedans are now exported from Maputo in Mozambique. “BMW South Africa has increased its production output with the introduction of a third shift which was implemented towards the end of last year (export & import SA Volume). Our overall annual production figure will increase from around 50 000 units per year to more than 80 000 units in 2013,” says Bodo Donauer, Managing Director of BMW South Africa. “At the same time, the total number of BMW vehicles exported from South Africa will more than double from around 33 000 to almost 70 000 vehicles per year. In line with this increase in volumes, we have had to look carefully at our export logistics and, in this regard, using Maputo in conjunction with our existing export supply chain in Durban makes sound business sense.”

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The Bavarian automaker will export some 14 000 vehicles or 20% of export volume via port in Maputo, Mozambique

Approximately 20% or around 14 000 vehicles per year will be exported using the Maputo car terminal in Mozambique. At the same time, BMW South Africa remains committed to working closely with Transnet and will be increasing the total number of BMW vehicles exported through Durban by almost 20 000 vehicles; an increase of more than 60%. Grindrod Freight Services, which currently handles road freight logistics for BMW South Africa, serves as the private operator of the concession for the Maputo car terminal and has been instrumental in cementing the deal. “We have aligned our service offering of road freight logistics, clearing and forwarding and terminal services with the customs requirements of South Africa and Mozambique to provide an integrated process from the BMW Vehicle Distribution Centre in Rosslyn to on-board the vessel in Maputo,” says Walter Grindrod, Executive, Group Business Development, Grindrod Freight Services. “We have run trials to test the system and are confident the export route is sound. Going forward, we expect two shipments per month to take place with these export vehicles destined for markets in Japan and other parts of the East.”

Given the country’s location with respect to the large automotive markets of the world, transport and logistics services have always been a challenge for South African automotive manufacturers. To combat these challenges, BMW South Africa has made investments and implemented plans in order to ensure sustainable, long-term logistics services for its expanding exports programme, to improve existing supply-chain corridors and validate any potential new ones within southern Africa. “To play on a world stage, we need to ensure we are competitive in all elements of the manufacturing process including supply chain and logistics. This means we have to develop topquality and productive ports which operate at high levels of efficiency at competitive prices to ensure a stable logistics environment. The decision to use Maputo is the first step in ensuring the development of a robust, well thought out and competitive logistics network, which includes access via multiple SADC ports and can easily incorporate sea, rail and road freight. The idea of a southern African development community is the ultimate vision for the type of supply chain needed to fully service South African manufacturers,” Donauer concludes. u

export & import SA // AUGUST 2013

Advertorial

OLG’s Logistics and Supply Chain Management offering

T

he Open Learning Group (OLG) has developed a complete education and training development path for the Logistics and Supply Chain Management related industries. Individuals can now study, with OLG, from NQF Level 2 and articulate all the way up to a B-degree on NQF Level 7, in this field of study. “By having focused our programme offering, we are in a position to align ourselves more closely with the industry and its representative bodies,” explains OLG’s Academic Head, Dr Deon van der Merwe.

“Our aim is to assist specifically with education and training experience for individuals who are either entering the scarce skills sectors or already employed in the relevant sectors. Programmes are conveniently available either via the short learning programme route, the skills programme route, or the full qualification route and will therefore speak to the specific needs of individuals and the specific employer’s workplace skills plan requirements,” states van der Merwe. Very few institutions offer qualifications in this field – especially through distance learning education which is becoming an increasingly popular mode of learning as it provides flexibility for the individual who is employed on a full-time basis. The adoption of distance learning support tools, such as

OLG’s Academic Head, Dr Deon van der Merwe

interactive whiteboards and online teaching and learning systems, simplify the journey for the individual and ensure easy access to tutorials, learning material and interaction with fellow students and lecturers. OLG uses the SMARTBoard and has installed several of these hi-tech learning tools across southern Africa. u

22956 Export 08/2013

“Our proactive approach allows us to stay abreast of new developments within the industry and to offer solutions to the ever-changing training needs. Employers who make use of our education and training solutions not only invest in their employees’ futures but also contribute to the level of professionalism for their own and related industries.”

The Department of Labour recently publicised a list of industries with skills shortages. The list includes logistics and supply chain management related industries.

export & import SA // AUGUST 2013

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Credit Guarantee country profile

Republic of Paraguay

Credit Guarantee Insurance Corporation of Africa Limited Credit Guarantee House, 31 Dover Street, Randburg, 2194, PO Box 125, Randburg, 2125, Tel: 011 889 7000, Fax: 011 886 1027, Email: [email protected]

“Paraguay will produce a record 9 million tons of soybeans this season, an all-time high . . .” Credit Guarantee experience Cover granted on an open basis

Recent political highlights

•• Vice-President Federico Franco assumed the presidency in June 2012, when Congress controversially impeached left-wing President Fernando Lugo over his handling of a deadly land dispute, a move that several regional governments denounced as a “legislative coup” by the conservative assembly. •• Horacio Cartes won the presidential election in April 2013 and will take office on 15 August 2013. Mr Cartes is a millionaire cigarette and soft drink magnate.

Country rating 3C

S/T business cycle indicator

•• Paraguay will hold the rotating chair of Mercosur at the end of this year after Venezuela – this will mark the full active comeback of the country to the regional block. Paraguay remains suspended because of the removal and impeachment of Fernando Lugo in June 2012.

Recent economic highlights

•• Paraguay’s central bank raised its 2013 economic growth forecast to 13% from 10,5%. In the first quarter of 2013 (1Q’13) the economy expanded 14,8% compared with the same period last year. This was driven mainly by a sharp rebound in agriculture, beef production and construction activity. Annual inflation

S/T political Debt recovery indicator

this year is expected to reach 5% from 4% last year and 4,9% in 2011. •• Paraguay will produce a record 9 million tons of soybeans this season, an all-time high that officials of the exporter’s chamber say will likely be repeated in the next crop year as well. Good crop weather combined with a 5% to 6% increase in planting area account for the rising output in the world’s fourth largest soybean exporter. •• Paraguay’s senate has voiced support for a 10% export levy on unprocessed grains and oilseeds. The government said the decision to reject the export levy and promote the alternative taxes is the result of discussions with farmers’

Researched and compiled by Hlolohelo Pule, economic services – Credit Guarantee Insurance

Suggested use of a collection agent

Country rating key – political risks: 1 = low, 2 = medium, 3 = high Commercial risks: A = low, B = medium, C = high

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export & import SA // AUGUST 2013

Credit Guarantee country profile Strap

associations and estimates the alternative taxes could represent $300 million for the Treasury. So far all other sectors have had to pay an export levy while the agricultural sector was exempt. •• Paraguayan beef exports for the first five months of 2013 have increased 37% year-on-year. Hong Kong has become the fourth largest destination for Paraguayan beef, with shipments to Hong Kong for the 1Q’13 increasing five-fold on the previous year. According to Animal Quality and Health National Service (Senacsa), Paraguayan livestock achieved a historical record in revenues of $1,078 million in 2012. Livestock exports increased 66% in the 1Q’13 totalling 82 000 tons (54% increase in revenue). In the same period last year, the quantity sold abroad was around 49 300 tons. •• Argentina and Brazil share electricity from two dams located in Paraguay. For years Paraguay has claimed the partnership agreements over the dams are unfair and wants the terms revised to its satisfaction. Both Argentina and Brazil claim Paraguay still owes them money spent on building the projects. Paraguay rejects the claims that it owes Brazil $31 billion and Argentina $15 billion. •• The Inter-American Development Bank (IDB) approved a $100 million loan to expand and increase efficiency of commodity transportation through the

Paraguay-Paraná Waterway. The project will enhance transport integration among Brazil, Paraguay, Argentina and Uruguay. IDB resources will help finance the purchase of state-of-the-art push boats and barges that will be used to transport 3,25 million metric tons per year of iron ore from Corumbá, Brazil, to Argentina or Uruguay via the waterway. As many as 260 direct jobs are expected to be created in Paraguay. IDB financing is expected to be complemented by commercial bank participation and financing from another development finance institution.  •• The Paraguayan Finance Ministry approved 44 private investment projects during the first quarter of this year. These investments totalled more than $122 million. •• According to the Heritage Index, Paraguay’s economy is the 80th freest in the 2013 Index. Paraguay

is ranked 15th out of 29 countries in the South and Central America/ Caribbean region and its overall score is above the world average.

Latest trade developments

•• Major exports: soybeans, feed, cotton, meat, edible oils, wood and leather •• Major imports: road vehicles and parts, consumer goods, tobacco, petroleum products, electrical machinery, tractors, chemicals •• Main trading partners: Uruguay, Argentina, Brazil, Russia, China and USA  •• SA exports to Paraguay totalled R28 million in 2010, R31 million in 2011, R67 million in 2012 and R31 million in January to May 2013 •• SA imports from Paraguay totalled R38 million in 2010, R50 million in 2011, R38,9 million in 2012 and R20,5 million in January to May 2013

SA EXPORTS TO PARAGUAY (TOP 5) 2011

2012

Prepared foodstuffs, beverages, spirits, vinegar, tobacco and tobacco substitutes

R22 800 360

Plastics and articles thereof

Plastics and articles thereof

R2 379 746

Prepared foodstuffs, beverages, spirits, vinegar, tobacco and tobacco substitutes

Products of the chemical or allied industries

R1 706 120

Pearls, precious and semi-precious stones, precious metals, imitation jewellery and coins

R7 692 804

Base metals and articles of base metals

R2 986 308

Base metals and articles of base metals

R1 616 783

Mineral products

R1 471 102

Export & import SA // AUGUST 2013

Products of the chemical or allied industries

R34 807 369

R16 864 300

R2 015 157

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Credit Guarantee country profile

Republic of Senegal

Credit Guarantee Insurance Corporation of Africa Limited Credit Guarantee House, 31 Dover Street, Randburg, 2194, PO Box 125, Randburg, 2125, Tel: 011 889 7000, Fax: 011 886 1027, Email: [email protected]

“. . . mining will propel growth in Senegal from 3,7% to approximately 4% this year.” Credit Guarantee experience Cover offered on an open basis

Recent political highlights

• Both President Macky Sall and Prime Minister Abdoul Mbaye entered into office on 2 April 2012. The country is recognised as one of Africa’s model democracies and stable economies in the region. • A new court comprising of African judges opened up in Senegal at the beginning of 2013. The mandate of the special court is to investigate former Chadian president Hissene Habre, who was accused of being responsible for the murders of more than 40 000 people. The trial which will be conducted within an African Union mandate is expected to begin after a 15-month investigation. A recent development in the case against Hissene Habre is his arrest by the Senegalese police on 30 June 2013; he has been under house arrest in Senegal since 2005. • Conflict in Mali remains a risk to political stability in Senegal and France recently pledged €700 000 to help

Country rating 3C

S/T business cycle indicator

4% in 2013 up from 3,5% in 2012 with inflation set to remain below 2%. The Senegalese government is targeting growth of 7% a year by 2015. The president and the government are aiming to speed up economic reforms and remove barriers to business in order to stimulate growth and investment.

boost the country’s anti-terrorism security capacity. Armed jihadists who are fighting against Mali’s government had threatened spillover attacks in Senegal in response to the country sending troops to assist in Mali and also for providing military bases for French troops.

Recent economic highlights

• Senegal has a population of 13 300 410 and a 39,3% literacy rate. The services sector makes up the largest share of total economic activity. The telecom and tourism industries dominate services and the agriculture sector contributes to providing employment and food to the populace. The informal sector contributes approximately 60% to GDP. The country is a member of WAEMU and as a result, the central regional bank, Banque Centrale des Etats de l’Afrique de l’Ouest (the Central Bank of West African States, BCEAO) is in control of all monetary policy decisions. • The International Monetary Fund (IMF) projects that growth will increase to

S/T political Debt recovery indicator

Senegal: Real GDP growth (annual percentage change)

Source: IMF • Some of the contributing factors to the expected uptick in growth this year include improvement in agriculture, more efficient electricity supply and

Researched and compiled by Nthabiseng Ntuli, economic

Suggested use of a collection agent

services – Credit Guarantee Insurance

Country rating key – political risks: 1 = low, 2 = medium, 3 = high Commercial risks: A = low, B = medium, C = high

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export & import SA // AUGUST 2013

Credit Guarantee country profile

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resumption of growth in neighbouring Mali. The IMF has also predicted that mining will propel growth in Senegal from 3,7% to approximately 4% this year. Standard & Poor’s recently revised Senegal’s sovereign credit rating outlook from negative to stable due to their opinion that the government will cut the fiscal deficit and successfully carry out reforms and investment which is set to propel growth. The ratings agency expects general government debt to increase from 36% of GDP in 2012 to 44% in 2016 due to the deteriorating current account and fiscal deficits. Furthermore interest payments are also expected to increase from just less than 7% of total revenues in 2012 to approximately 9% in 2016 putting pressure on government debt which is largely external in nature and denominated in foreign currency. On his visit to Senegal during June 2013 the President of the United States committed to US government and private sector support for food security efforts in the country. The US has pledged to increase its assistance to Senegal for seeds and agricultural technology by $47 million; the private sector will also invest $134 million in agriculture. The country still relies heavily on donor assistance. The IMF reported that the government will possibly issue a $500 million tenyear eurobond in 2013 which will assist the country in closing its financing gap. Senegal is among the few African countries that have ventured into eurobonds issuing its first $200 million five-year eurobond in 2009. The country has forecasted that it will earn $30 million in mining taxes on mining revenues during 2013. The revenue tax was introduced after Macky Sall came into power in a bid to

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increase mining revenues and to boost mining’s contribution to the budget. Senegal aims to be West Africa’s hub for Islamic finance but the country has yet to adjust its policies to comply with Islam’s ban on interest. Approximately 95% of the population is Muslim, which is an advantage in terms of market potential for Islamic compliant bonds. In the World Bank’s Doing Business 2013 report, Senegal is ranked 166th out of 185 countries which is a decline compared to its 2012 ranking of 162. The government is currently in the process of reforming its tax and customs codes in order to improve the private sector and the business environment. The World Bank approved a $20 million credit towards funding basic education in the country. It will mainly fund education for students in primary grades and also focus on improving mathematics and science access for poor children. The French Finance Minister announced that France would provide $78 million in grants for Senegal. France is Senegal’s largest investor and owns approximately one-fifth of all companies in the country. The government approved The National Strategy for Economic and Social

Development (SNDES) for 2013 to 2017 during November 2012 which is a framework setting out government strategy in the areas of growth, productivity and wealth creation; human capital and sustainable development; and government, institutions, peace and security. • Some of the challenges to development include inefficiencies in financial management and poor development within the private sector, especially related to SMEs. Impediments to business include difficulty in accessing finance and the limited market in which goods and services can be sold.

Latest trade developments

• Major exports from Senegal: fish, groundnuts (peanuts), petroleum products, phosphates, cotton • Major imports to Senegal: food and beverages, capital goods, fuels • Main trading partners of Senegal: Mali, France, India, China, Italy, UK, Nigeria • SA exports to Senegal totalled R614 million in 2010, R692 million in 2011, R832 million in 2012 and R287 million in January to May 2013 • SA imports from Senegal totalled R5 million in 2010, R9 million in 2011, R11 million in 2012 and R9,4 million in January to May 2013

SA EXPORTS TO SENEGAL (TOP 5) 2011

2012

Mineral products

R234 574 163

Mineral products

R299 726 221

Machinery and mechanical appliances

R99 375 142

Machinery and mechanical appliances

R130 465 133

Base metals and articles of base metal

R88 444 926

Plastics and articles thereof; rubber and articles thereof

R120 907 827

Plastics and articles thereof; rubber and articles thereof

R81 020 907

Vegetable products

R86 404 679

Vegetable products

R75 076 378

Vehicles, aircraft, vessels and associated transport equipment

R77 621 600

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Trade News Ten-year transformation strategy makes supply chain specialist the preferred choice

NCP Chlorchem renews chlorine contract with Cargo Carriers

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CP Chlorchem will continue its eight-year relationship with logistics and supply chain specialists Cargo Carriers, via a further extension of the contract to transport chlorine from NCP Chlorchem’s Chloorkop plant in Kempton Park to its warehouse in Atlantis in the Western Cape. NCP Chlorchem is SA’s major supplier of chlorine to municipal water-purification plants and the public swimming-pool maintenance market.

Safety first

Given the potential hazards of transporting chlorine, Cargo Carriers’ record on safety is of major importance. The company’s vehicles are fitted with cranes to facilitate safe loading and offloading of chlorine drums from vehicle to storage area – and all vehicles are fitted with safety kits to contain the risk in the unlikely event of an en-route spill. The company also maintains relationships with clean-up services nationwide, as further insurance against any emergency. Drivers have to meet strict requirements with regard to product knowledge, safety procedures and crane operation, with NCP Chlorchem facilitating training and skills update on a regular basis.

chemicals. And that is backed by their track record – in eight years, there has not been a single hazardous en route incident in the transport of our cargo.”

Pinpoint planning allows cost reduction

After safety aspects, the second-most important factor in being awarded the contract was Cargo Carriers’ ability to reduce clients’ costs through superior logistics, says the company’s Marketing Director Andre Jansen van Vuuren. “We have spent ten years strategically transforming from bulk hauliers into full-service logistics and supply-chain management specialists. We have upgraded our fleet, improved our B-BBEE rating from level 7 to level 4, achieved and maintained compliance with the relevant Safety, Health, Environment and Quality (SHEQ) standards and developed an industry-leading owner/driver programme.” Most importantly, the company has installed world-class logistics software to manage

cost-effective planning, scheduling and prioritising of loads. In addition, on-board technology monitors driver performance and enables tracking and tracing of cargo throughout the delivery process. “Cargo Carriers are always seeking new avenues in order to reduce client costs,” says Gerhard Painter. “In fact, with the renewed contract, they have managed to lower our costs – through innovation and the latest technology.” The result of this ten-year strategy has been steadily increasing growth – in the past year, Cargo Carriers has also received, renewed or extended contracts from some of its major customers. Cargo Carriers boasts “a full-service approach to client relationships” – and judging by their growing client list, they deliver efficient, cost-effective supply-chain management, without compromising safety. As Andre Jansen van Vuuren puts it, “We must be doing something right . . .” u

For further information, visit cargocarriers.co.za

“Off the cuff, I’d say the biggest factor in renewing the contract with Cargo Carriers is their safety record,” says Gerhard Painter, Supply Chain Manager at NCP. “They have a reputation as one of the top five hauliers of dangerous goods in South Africa; and are known for their ability to negotiate and mitigate the risks of potentially hazardous

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Trade News

Conversion from steel to aluminium beverage cans

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he South African beverage market will soon see aluminium cans introduced in addition to the traditional tin-plated steel beverage cans currently on the market. “Globally, 85% of all beverage cans are made from this material,” says Erik Smuts, Managing Director of Nampak Bevcan. The new aluminium can lines will be capable of running eight can sizes and produce cans at speeds of up to 3 000 cans per minute, as opposed to the 1 600 steel cans currently produced per minute.

The benefits of aluminium as opposed to steel are that due to the ability to hedge aluminium, it could be a far more stable commodity; the material cost is transparent whereas steel is more volatile with price fluctuations. Aluminium also weighs 60% less than steel resulting in reduced transportation costs. The conversion to aluminium will also result in a significantly improved carbon footprint status. Approximately 10% less energy will be used in the manufacturing process. The value of used aluminium cans is much higher than that of tin-plated steel

Springs, Gauteng: Aluminium cans will be introduced as the beverage packaging of choice, replacing most of the traditional tin-plated steel beverage can production

cans. It is estimated that between R100 million and R200 million a year would flow into the scrap metals and recycling industry, allowing an additional 2 000 to 3 000 people a source of income from collecting and selling used cans. u

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“The decision to move to aluminiumbodied cans was a natural progression due to the inherent advantages the conversion will hold for the economy, the beverage industry, consumers and the environment,” adds Smuts.

The expansion at the Bevcan Springs Nuffield plant has already had a positive impact in the Ekurhuleni Metropolis, with more than 40 new jobs being created with the first aluminium line installation, while two more existing tinplate lines will be converted to aluminium.

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Trade News

City Deep’s closure would be logistical nightmare

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ith South Africa’s sea ports already experiencing significant capacity strains, closure of the Johannesburg inland port as a result of the South Africa Revenue Services’ (SARS) proposed Customs Control Bill, which was recently approved for submission to parliament by Cabinet, is likely to have negative ramifications for the logistics industry.

“The implementation of Penny Henley, this new Bill will directly Logistics Manager at impact thousands of jobs Blue Strata and would further cause constraints to the Durban port, which has recently been stricken by its own

congestion issues,” says Penny Henley, Logistics Manager at Blue Strata, South Africa’s only integrated end-to-end import and working capital specialist. Closure of the City Deep inland port, which is the largest in Africa and the fifth-largest in the world, would result in severe disruption and further escalate the cost of doing business in the country, which is one of the biggest impediments to the growth of import and export businesses in South Africa. Furthermore, this would have a direct impact on the profit margins of struggling small businesses in these industries. “We would also likely experience a logistical nightmare with increased vessel waiting times, cargo and road truck delays that would result in extended

Services trade database under way

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in services in regional trade agreements; members’ applied measures affecting trade in services; and services statistics. The first version of the database has just been launched, as part of the WTO’s Integrated Trade Intelligence Portal I-TIP Services portal.

The data are presented in four modules covering: members’ commitments under the WTO’s General Agreement on Trade in Services (GATS); commitments on trade

Policy makers, researchers, trade negotiators, and the general public can access the database for free. Policy transparency is a public good and a shared objective of both institutions. The World Bank makes trade data publicly available under the Open Data Initiative, as does the WTO with the I-TIP.

he WTO and the World Bank have agreed to jointly develop and maintain a database on trade in services, an area that is becoming increasingly important and yet for which little information is publicly available. The joint database covers various sectors in more than 100 countries, such as financial, transportation, tourism, retail, telecommunications, and business services, including law and accounting.

berthing times as well as increased charges for storage,” says Henley. Henley adds that the Bill further requires that all imported goods should be cleared and released at the first point of entry. “Despite the massive job losses that may be suffered by clearing and forwarding agents in Johannesburg, we would also likely experience capacity issues and inefficiencies due to the Durban port being highly congested. “While we wait for a decision on whether the Customs Control Bill will be passed or not, we hope that government will present the logistics industry with a comprehensive strategy on how the challenges associated with the closure of the City Deep inland port will be dealt with,” concludes Henley. u Transparency is particularly important in the dynamic area of trade in services because the regulatory framework is complex and little information is publicly available. Cross-border trade in services makes up one-fifth of all world trade, even without considering international transactions through foreign affiliates and the temporary movement of people. This WTO-World Bank arrangement exploits synergies between both institutions. Among other things, the joint database combines WTO data, including those on legal commitments, trade policy reviews (TPRs) or trade monitoring reports with World Bank data on applied policies from the Services Trade Restrictions Database, which went public last year. Both institutions will work hard to make sure the joint database stays up to date and expands to cover more sectors and countries. u

Credit Guarantee announces new MD, board changes

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ollowing the announcement during June (export & import SA) that Credit Guarantee Managing Director Mike Truter has reached mandatory retirement after nearly three decades of distinguished service; the company has announced his successor as well other appointments to the company’s board.

Guarantee. Peter Todd, previous Managing Director of Mutual and Federal has resigned from M&F and consequently resigned as Chairman of Credit Guarantee; Raimund Snyders, new CEO of Mutual and Federal, has been appointed Chairman of Credit Guarantee’s board of directors.

Charles Nortje has taken up the position as new Managing Director of Credit

Edward Paul, who is Executive: Risk and Actuarial at Mutual and Federal, has been

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appointed nonexecutive director to Credit Guarantee’s board.

export & import SA magazine wishes the new board members all the very best. u

Among the appointments at Credit Guarantee: Charles Nortje as the company’s new Managing Director

export & import SA // AUGUST 2013

Trade News

Dube TradePort looks to introduce new freighter service

Government to assist with new citrus export destinations

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Big plans: in addition to the recent start on construction of the company’s multimillion rand warehousing facility Dube TradeZone, Dube TradePort Corporation plans to introduce three freighter aircraft over the next year

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ube TradePort Corporation has said it aims to introduce three freighter aircraft during the current financial year in an effort to increase direct air connectivity from Durban. It is envisaged that two freighters will fly into Africa and one to Europe for the benefit of especially KwaZulu-Natalbased business, affording such enterprises the opportunity to enter global supply chains and access foreign markets.

TransAfrica’s maiden voyage

players within the transport industry deliberate around topics of growth and development.   The exhibition component of TransAfrica 2013 will include a showcase of leading names from all four transport disciplines — road, rail, air and sea, as well as special emphasis on cargo systems and pipeline transport systems. A three-day conference will feature senior experts from leading transport operators and recognised

South Africa is the world’s biggest exporter of oranges and the largest shipper of grapefruit. However, South Africa’s citrus exports to the European Union (EU) are struggling due to citrus black spot, a fungal disease that affects the external appearance of the fruit, and which occurs in citrus plants throughout subtropical climates, causing a reduction in both fruit quantity and quality. u

authorities – including various government bodies, financiers and renowned consultants.   The event is said to have received full support from the Department of Transport. Diamond Sponsor of TransAfrica 2013 Transnet will showcase South Africa’s progressive vision of transport system development.   For further information, visit www.transafricaexpo.co.za

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Described as an “unrivalled business-tobusiness exhibition and conference” by its organisers, TransAfrica will debut at the Expo Centre, Nasrec, Johannesburg from 1 to 4 October 2013.   The new Transport, Infrastructure & Investment Expo, explains event organisers Umthombo Exhibitions, Events and Promotions, will see leaders and market

Dube TradePort Corporation is currently rolling out its African Strategy, which involves the development and nurturing of sound business relationships with key provincial drivers of business and tourism. Route planning is being undertaken in conjunction with the Durban Chamber of Commerce and Industry (corporate and business travel), Trade & Investment KwaZulu-Natal (trade and commercial linkages),Tourism KwaZulu-Natal (leisure travel and tourism/hospitality packaging) and the Board of Airline Representatives (Foreign Carriers Association). u

he government has made a commitment to help South Africa’s citrus farmers forge trade links with the country’s BRICS partners, particularly China and India, Agriculture, Forestry and Fisheries Minister Tina JoematPettersson said recently at the Citrus Growers’ Association and AgriSA in Johannesburg.

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Trade News

Transnet’s ‘one-stop’-shop Transnet officially launched its Enterprise Development Hub in Johannesburg . The Hub, the first of which will be at the company’s Carlton Centre head office, will be a one-stop shop for entrepreneurs and potential suppliers to Transnet. Services on offer include business development, business registration,

procurement advisory services, tax registration and compliance, financial support and guidance on black economic empowerment requirements. The plan is to roll out the concept across the country.

The Hub operates five days a week with ten staff and is a partnership with the South African Revenue Service, Gauteng Enterprise Propeller, BEE Verification Agency, National Youth Development Agency, Small Enterprise Development Agency and the Department of Trade and Industry’s Companies Intellectual Property Commission. Transnet provides the bulk of the funding while the partners provide advice and expertise on their respective areas. u

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Although the Hub will primarily target potential suppliers to Transnet, budding entrepreneurs will also receive advice on a broad range of opportunities. Speaking at the launch, Public Enterprises Minister Mr Malusi Gigaba said statistics show that while small businesses in developed countries contribute around 50% to the economy, South Africa’s small businesses contribute a disappointing 30% to Public Enterprises Minister Mr Malusi Gigaba with Transnet Group Chief Executive, Mr Brian Molefe Gross Domestic Product.

“Our aim is to increase the participation of small businesses in the mainstream economy, as they have been identified as being key to unlocking economic growth. More than 12 million South Africans rely directly on small businesses for their livelihood. Small enterprises in South Africa employ between 60% and 70% of the employable population,” said Minister Gigaba.

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Trade News

Eastern Cape businesses into China

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12 franchises in South Africa and exports its products to more than 20 countries around the world. Every year the company’s international franchisees resurface thousands of bathroom fixture items (baths, basins, tiles) in hotels, resorts, and private dwellings.

Founded in Port Elizabeth in the mid-1970s by the late Ivor Benn when he bought a struggling bath resurfacing business, MendA-Bath International is one of seven Eastern Cape companies placed by ECDC on a 30-month permanent trade fair in Ningbo, China. The other companies are Oceanwise (cob fish), Gaehlercorr Industries (abalone), Superfecta Berries (bluerries), Momentos of Africa (mohair products) as well as Carara Agroprocessing (cherry peppers) and Makana Meadery (honey beer).

“Our product is popular because we can save money for a customer and this should make our product attractive to China. Furthermore, Ningbo is the largest seaport in China and the second largest in the world. It therefore forms a major part of China’s import and export market. The port city of Ningbo also presents vast opportunities for the Eastern Cape as it could serve as a channel for Eastern Cape products to larger markets within China and the rest of the world,” says Mend-A-Bath International director Ian Moore.

Since the official opening of the trade fair in April, the companies have received numerous trade enquiries about their products. Mend-A-Bath International has

In Grahamstown, Mike Duxbury, the managing director of one of the largest pickled cherry peppers processors in South Africa, Carara Agroprocessing, says “access

to the massive Chinese consumer market offers fantastic opportunities for Eastern Cape agroprocessing ventures as it could serve as a channel for its products to larger markets within China and the rest of the world.” Between January and July 2012, a total of $500 million worth of imported agroprocessed products went through the Harbour of Ningbo alone. The product ranges included wine, milk, fruit and seafood. Ningbo citizens alone consumed 5 415 tons of imported foods during this period. “Being placed on a 30-month trade fair in China opens immense opportunities for our business. Opportunities offered by the Chinese market are significant and we intend to grow in the region,” Duxbury adds. ECDC market access unit’s business advisor Zodwa Kepeyi adds that the corporation is hoping for long-term contracts from not only Ningbo, but other cities in China too. u

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acked by development financier, the Eastern Cape Development Corporation (ECDC), Mend-A-Bath International, a leading bathroom fixture resurfacing products exporter is pursuing export opportunities in China in a bid for a share of the lucrative and large Asian consumer market.

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Trade News

Shortage of supply chain management skills leads to new degree qualification

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s South African businesses continue to expand their footprint into Africa to tap into the continent’s expanding consumer market and growing middle class, so the shortage of managers with suitable high-level skills in export and supply chain management is becoming increasingly apparent.

The importance of addressing this need, particularly within the African context, is borne out by the likes of McKinsey Consulting’s ‘Rise of the African Consumer’ report. Among other things, the researchers noted that: “. . . building an efficient and well-managed distribution network can have an enormous impact on financial performance” of a business. The report further emphasised that creating a strong route to market, while challenging given Africa’s fragmented retail environment, “if done well can create competitive advantage”. Similarly, a key component of the 2013 SAPICS (Association for Operations Management of Southern Africa) Conference, held in June, was around an identified skills shortage in supply chain management and the finding – as determined by industry managers themselves – that operational ability is not

in short supply, but that management skills within the supply chain are sorely lacking. The IMM Graduate School of Marketing (IMM GSM) has identified this industry need and now offers a Bachelor of Commerce (BCom) degree in Marketing and Management Science. This has a special emphasis on training students in the science of managing the supply chain in order to support the marketing function through the optimal delivery of goods and services to customers. “This qualification combines the marketing function with the critical supply chain functions of distribution, logistics and project management, with a strong focus on practical and relevant business research,” says Peter Bezuidenhoudt, CEO of the IMM Group. “It is an ideal qualification for supply chain management professionals who wish to capitalise on the IMM GSM’s proven track record of distance learning programmes for working adults.” The BCom degree in Marketing and Management Science is at Level 7 of the NQF and takes a minimum of three years to complete. It is complemented by a Higher Certificate in Export Management (Level 5 on the NQF) and a Diploma in Export Management (Level 6 on the NQF).

The IMM Graduate School of Marketing (IMM GSM) has identified the industry need

SAPICS has come out in support of the new degree. “We are very excited to have an association with IMM GSM and support the new BCom supply chain qualification,” says Liezl Smith, Director and outgoing President of SAPICS. “There is still a gap in the supply chain link between the marketing function and the fulfilment side. We believe that, if collaboration and understanding can be fostered between those functions, it will bridge that gap.” She said SAPICS would provide best practice supply chain knowledge to the IMM GSM which, in turn, would give supply chain managers insight into the marketing function. Registration for the degree, diploma and certificate programmes occurs twice per year. u

Africa must produce value The next phase for Africa should be industrialisation, by Africa producing value added products. This was said by the Minister of Trade and Industry, Dr Rob Davies, speaking at the South AfricaEuropean Union (SA-EU) business forum in Pretoria today. Davies added that Africa needed to locate itself where there is growth. “Industrialisation is where the economic growth is,” said Davies. He said that South Africa’s exports have shown growing trade deficits, as compared to the 2008 trade level. According to him, there is a growing interest for Africa as an ideal investment destination and the dti is facilitating the investment process providing guidance to potential investors. Davies added that South Africa needs to invest in competitive infrastructures to attract foreign direct investments.

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The EU Commissioner of Trade, Mr Karel De Gucht encouraged the continuation of the business forums and engagements between South Africa and the EU. This, according to De Gucht will reinforce the approach of the trading partnership. “The European Union remains a strong investment destination which still receives the highest share of FDI in the world year on year. South African companies, such as Steinhoff (in the furniture retailing sector) and Aspen (in the pharmaceutical sector) have been active on our market. Also, investing in South Africa is not a quick, fly-by-night operation, but requires long-term sustainable partnerships. This is what many EU companies operating in South Africa are in for. Some of them have massively invested in the social development of the country,” said Commissioner De Gucht.

De Gucht emphasised that Africa’s economic growth depends on empowering the youth with skills that match business demand. “The EU is concerned about increasing youth unemployment in Africa, and we are going to work with Africa to address this challenge,” added De Gutcht. According to De Gucht the EU has partnered with the Industrial Development Corporation (IDC) in various projects that are aligned with the Industrial Policy Action Plan including the Solar project in Upington. The Chief Executive Officer of Business Unity South Africa, Mr Xolani Qubeka said the EU is one of the oldest trading partners and he encouraged South Africa to put more effort on producing value added products.

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Trade News

Avis Fleet Services invests in new financial management system Vehicle leasing and fleet management solutions provider Avis Fleet Services (AFS) has invested in Sage ERP X3 as its future financial platform.

Keith Fenner, senior vice president for sales at Sage ERP Africa and Middle East

“This strategic investment is part of our company’s future growth and expansion strategy and the need to provide sustainable IT platforms,” says Mike Re, Chief Information Officer.

The investment will help the company move from highly manual financial processes and transactions towards a more streamlined and automated system for procurement, accounting, invoicing and the payment of suppliers and staff. “Further to this,” says Michelle Erasmus, Chief Financial Officer at Avis Fleet

Services, “the solution will allow for realtime financial reporting and intelligent dashboard information, which will – for example – enable us to effectively manage the payment of suppliers and address any possible problem areas.

national requirements as it reduces costs, saves time, offers full interoperability amongst various sites or teams and improves the overall customer experience. “Sage ERP X3 is available on all leading platforms in the market and is perfectly suited to the operations of a fleet management services company through the fully featured integrated web-based modules,” he says.

AFS provides fleet management and leasing services to a number of corporate and government customers, together with value-added services such as: fleet accident management, fuel card provision and management, intelligent fuel management, traffic fine management and ad hoc vehicle rental. All financial functions are managed and controlled at their head office in Isando and regions have the ability to capture payments and query or view financial transactions. All accounting, with the exception of specific regional offices, is performed at the head office.

“Sage ERP X3 provides a flexible and scalable platform to standardise your processes and business rules on a single database, allowing you to adopt best practice in delivering services internally and externally by having control of key operations. Organisations can undertake continuous improvement and development, while they maintain data integrity, reduce manual processes, and get real-time reporting,” says Fenner.

Keith Fenner, senior vice president for sales at Sage ERP Africa and Middle East, explains that the solution is one for organisations with international and multi-

Implementation of the new solution will commence in August and the system will go live early 2014. u

China invests in South African wine Perfect Wines of South Africa was established as a joint venture between Hein Koegelenberg from Leopard’s Leap and La Motte and Perfect China in 2011.

the total annual South African wine exports to China,” Perfect China, Perfect Wines of South Africa and Val de Vie said in a joint statement on recently.

“The L’Huguenot brand was born out of this joint venture and has already been responsible for the export of 2,8 million bottles of wine to China in 2011 and 2012 – amounting to about 25% of

Perfect China distributes L’Huguenot throughout the Far East with a sales team of over a million agents and 5 000 depots to markets including Malaysia, Thailand, Singapore and Vietnam. u

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Yangzhou-based Perfect China has made the Asian country’s first investment in South Africa’s wine industry, acquiring the Val de Vie estate in the Western Cape in a deal expected to boost exports of South African wine to the Far East. Perfect China, through its 51% shareholding in Perfect Wines of South Africa, purchased the 25-hectare wine farm between Paarl and Franschhoek that includes 21 hectares of vineyards, a manor house and wine cellar.

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2013 event calendar *Highly Recommended Exporters Club Western Cape Meeting ‘New Export Business Initiatives created by Provincial Government’ Hotel School, Grainger Bay, South Africa 21 August /www.ecwc.co.za

2nd African Ports Evolution Forum

CTICC, Cape Town, South Africa 26 to 28 August/www.portsevolution.com

Certificate in Mature Demand and Supply Planning University of Pretoria, Pretoria, South Africa 2 to 4 September/www.ceatup.com

Electra Mining Botswana

Gaborone Fair Grounds, Gaborone, Botswana 3 to 5 September/www.electramining.co.bw

*AGM of the Exporters Club Western Cape

Atlantic Imbizo Conference Centre, V&A, Cape Town, South Africa 5 September/www.ecwc.co.za

*SAPICS Regional Conference in Cape Town Erinvale Estate, Somerset West, Cape Town, South Africa 18 September/www.sapics.org

The International Food and Drink Event Africa (IFEA) Sandton Convention Centre, South Africa 18 to 20 September/www.ifea.co.za

25th Annual Logistics Achiever Awards Johannesburg, South Africa 19 September

*South African Association of Freight Forwarders (SAAFF) congress Hilton Hotel Sandton, South Africa 8 to 9 October/www.saaff.org.za

Western Cape Exporter of the Year Awards Venue TBC 10 October/www.ecwc.co.za

*The Wine Farmers and Fruit Growers Exhibition

Sandringham Estate, Stellenbosch, South Africa 15 to 17 October

14th Annual Global Export Finance Conference

Consumer Goods Council SA Summit 2013

Global Pharmaceutical Distribution 2013

OR Tambo Southern Sun, Gauteng, South Africa 15 to 18 October/www.freighttraining.co.za

Barcelona, Spain 23 to 24 September/www.euromoneyseminars.com Amsterdam, The Netherlands 23 to 25 September/www.distributioneurope.com

The Forum, Johannesburg, South Africa 15 to 16 October/ www.cgcsa2013.co.za

*5th Cool Logistics Global

*CILTSA’s “Meet the Gurus” Global Supply Chain Update 2013

SS Rotterdam, Rotterdam, Netherlands 24 to 26 September/www.coollogisticsconference.com

The Mount Nelson Hotel, Cape Town, South Africa – 22 October/www.ciltsa.org.za The Maslow Hotel, Sandton, South Africa – 24 October/www.ciltsa.org.za

NEVA 2013 (Shipping/Ports)

St Petersburg, Russia 24 to 27 September/www.transtec-neva.com

African Airport Evolution Forum 2013

*APICS Annual Conference: USA

*Durban Exporter of the Year Awards

The 11th Annual Cold Chain GDP & Temperature Management Logistics Global Forum

Nairobi, Kenya 28 to 30 October/www.hypenica.com

Orlando, USA 29 September to 1 October/www.apics.org

KwaZulu-Natal, South Africa (Venue TBC) 30 October

*Gauteng Exporter of the Year Awards

Hyatt Regency McCormick Place, Chicago, USA 30 September to 4 October/ www.coldchainpharma.com

Global

SAE 2013 Commercial Vehicle Engineering Congress

Bangkok, Thailand 15 to 17 August/www.logiwareasia.com

INMEX India (Maritime)

Johannesburg, South Africa 22 November/www.jcci.co.za

LogiWare Asia (Logistics and Warehousing)

Rosemont, Illinois, USA 1 to 3 October

‘Bombay’ Exhibition Centre, Mumbai, India 8 to 10 October/ www.inmexindia.com

Breakbulk South America Congress

Renaissance Sao Paulo Hotel, Sao Paulo, Brazil 2 to 5 September/www.breakbulk.com

The Freight Summit (TFS)/Annual CIFFN meeting

Asia Fruit Logistica

Shangri-La in Bangkok, Thailand 13 October/www.thefreightsummit.com

Asia World-Expo Centre, Hong Kong 4 to 6 September/www.asiafruitlogistica.com

*FIATA World Congress 2013

ProPack Vietnam 2013

Singapore 15 to 19 October/www.fiata.com

Vietnam 11 to 14 September/www.vietfood.merebo.com

*CSCMP’s Annual Global Conference 2013

2nd Black Sea Ports and Shipping

Colorado Convention Center, Denver, Colorado, USA 20 to 23 October/www.cscmp.org

The Marmara Taksim Hotel, Istanbul, Turkey 11 to 12 September/www.transportevents.com

*JOC Inland Distribution Conference

Sheraton Kansas City Hotel at Crown Center, Kansas City, Missouri, USA 17 to 19 September/www.joc.com/events

Asian Logistics and Maritime Conference (ALMC) Hong Kong Convention and Exhibition Centre, Hong Kong 7 November/www.asialogisticsconference.com

To add your event to our calendar or request further information of an event, contact the editor: [email protected] or visit the web pages provided.

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2013 Event Calendar

Africa

Export Risk Management Conference (ERM 2013)

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