Julius Okiror, Economist Vietnam Delegation 26 June 2015 An inspiring place to do business.

Julius Okiror, Economist

Vietnam Delegation 26 June 2015 An inspiring place to do business

Presentation overview

• Overview of Wesgro

• The Western Cape Economy

• Trade and Investment between Western Cape & Vietnam

• Questions and Answers

An inspiring place to do business


Wesgro business structure• Established by Law:

– Western Cape Investment and Trade Promotion Law Act 3 of 1996

– Western Cape Investment and Trade Promotion Agency Amendment Act, 2013

• Compliance in terms of Treasury Regulations/ PFMA/ MFMA

• Reports to:

– MEC for Agriculture, Economic Development and Tourism - MEC Winde

– Office of the Mayor – Lance Greyling

• Financed by:– Western Cape Government

– Department of Economic Development and Tourism

- Department of Agriculture– City of Cape Town

Item Source Number

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

Real GDP (2014) Stats SA ZAR 3trn WC: ZAR 299bn (2013)

Inflation (CPI) Statistics SA – March 2015 4.0%

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

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

Company Tax SARS - 2014/15 28%

Unemployment Statistics SA – 4th Quarter 2014 24.3%

VAT SARS - 2014/15 14%

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

South Africa by numbers


Western Cape infrastructure & connectivity


• The province boasts 3 export-oriented ports • Cape Town is a prominent stop on some of the

world’s major shipping routes • Sophisticated road infrastructure linking Cape

Town to other major South Africa centres and beyond

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

• Cape Town airport has direct international flights to 13 destinations

The Western Cape as an attractive business destination

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

Development Community (SADC), soon to be AFTZ

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

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

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

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

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

Times.

• 2014 World Design Capital was Cape Town

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

• Saldanha Bay IDZ – Oil & Gas maintenance hub


Western Cape GDP by sector


Source: Quantec, 2014

2002 – 70.2%Services sector: 2007 – 71.9%

2013 – 73.6%

Agriculture, forestry and fish-

ing

Mining and quar-rying

Manufacturing Electricity and water

Construction Wholesale & re-tail trade; hotels

& restaurants

Transport and communication

Finance, real es-tate and busi-ness services

Community, so-cial and other

personal services

General govern-ment services

2002 0.0499941589720672

0.00313725401002281

0.187835344515161

0.0250975197509843

0.0320506886129621

0.158960981124316

0.0982748480502232

0.262789722985525

0.0746933226827105

0.107166159296027

2007 0.0395507519072158

0.00262300330706643

0.175426818159842

0.0236333044744916

0.0400511281856816

0.161270094727982

0.104605467572545

0.285678775079717

0.0705603193387717

0.0966003372466867

2013 0.0406817825854197

0.00256643643976768

0.15771429782242

0.0204730538767063

0.0421158783149368

0.160600523811006

0.101823971470758

0.2980286255132 0.0675870901839503

0.108408339981835

3%

8%

13%

18%

23%

28%

33%

WESTERN CAPE REAL GDP BY SECTOR, 2002-2013

% S

hare

Western Cape GDP by manufacturing & services sector

An inspiring place to do businessSource: Quantec, 2014

Food, beverages & tobacco

26%

Petroleum products, chem-icals, rubber &

plastic24%

Metals, metal products, machinery & equipment

13%Wood, paper, pub-lishing & printing

10%

Furniture&other manufacturing

9%

Textiles, clothing & leather goods

7%

Transport equipment

6%

Other non-metal mineral products

3%

Electrical machinery & appa-ratus2%

Radio, TV, instruments, watches

2%

MANUFACTURING SECTOR CONTRIBUTION TO THE WESTERN CAPE, 2013

Business services

30%

Wholesale and retail trade

19%Finance and

insurance15%

General gov-ernment

14%

Transport and storage

7%

Community, so-cial and personal

services7%

Communication7%

Catering and accommoda-tion services

2%

SERVICE SECTOR CONTRIBUTION TO WESTERN CAPE GDP, 2013

RANK TOP 10 EXPORTS VALUE 2013 (ZARbn)

% GROWTH 2012-2013

1 Oils petroleum, bituminous, distillates, except crude 8.39 -5.32

2 Grape wines 7.80 33.26

3 Citrus fruit, fresh or dried 6.58 22.70

4 Apples, pears and quinces, fresh 5.59 53.52

5 Grapes, fresh or dried 4.02 22.27

6 Hot-rolled products, iron/steel, width>600mm, not clad 3.11 7.47

7 Liquid, gas centrifuges, filtering, purifying machines 2.01 -6.23

8 Maize (corn) 1.83 44801.31

9 Fruit, nut, edible plant parts nes, prepared/preserved 1.60 16.90

10 Liqueur, spirits and undenatured ethyl alcohol <80% 1.28 66.28

TOTAL EXPORTS 74.87 16.06

Western Cape global export and import products


RANK TOP 10 IMPORTS VALUE 2013 (ZARbn)

% GROWTH 2012-2013

1 Petroleum oils, oils from bituminous minerals, crude 66.39 -16.76

2 Oils petroleum, bituminous, distillates, except crude 33.36 9.42

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

4 Liqueur, spirits and undenatured ethyl alcohol <80% 2.83 38.63

5 Prepared or preserved fish, fish eggs, caviar 1.67 9.60

6 Medicaments, therapeutic, prophylactic use, in dosage 1.67 73.87

7 Footwear nes, with outer sole, upper rubber or plastic 1.35 -0.98

8 Footwear with uppers of textile materials 1.27 9.51

9 Electric generating sets and rotary converters 1.07 3550.16

10 Machines nes having individual functions 1.03 -3.16

TOTAL IMPORTS 186.57 3.99


Western Cape global trade markets, 2013



TOP 10 WESTERN CAPE EXPORT MARKETS, 2013

RANK IMPORTERS VALUE 2013 (ZARbn)

% SHARE2013

% GROWTH2012-2013

1 Netherlands 6.74 9.00 -0.91

2 United Kingdom 6.66 8.89 25.043 Germany 3.85 5.14 25.334 Mozambique 3.78 5.05 148.625 United States 3.49 4.65 4.386 Singapore 2.70 3.61 9.177 Japan 2.65 3.53 117.688 Angola 2.54 3.40 11.839 Kenya 2.29 3.05 64.53

10 China 2.12 2.84 49.39

TOTAL EXPORTS 74.87 100.0% 16.06%

TOP 10 WESTERN CAPE IMPORT MARKETS, 2013

RANK EXPORTERS VALUE 2013 (ZARbn)

% SHARE2013

% GROWTH2012-2013

1 Saudi Arabia 37.67 20.19 -0.32

2 China 28.01 15.01 39.27

3 India 16.37 8.77 75.28

4 Nigeria 13.59 7.28 -20.73

5 Germany 8.10 4.34 65.45

6 Singapore 7.54 4.04 75.42

7 United Kingdom 6.58 3.53 21.31

8 Italy 5.24 2.81 38.49

9 United States 4.71 2.52 13.80

10 Netherlands 4.64 2.48 -11.23

TOTAL IMPORTS 186.57 100.0% 3.99%


Western Cape trade with Vietnam



2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Ex-ports (ZARm)

119.602841

125.644988

90.392144

143.699433

213.194826

163.552227

362.629968

242.225822

206.746221

336.759978

Im-ports (ZARm)

102.943892

142.100157

162.904029

234.021215

420.295924

327.798678

362.33472

552.141049

740.471837

591.117174

Trade bal-ance (ZARm)

16.658949

-16.45516

9

-72.51188

5

-90.32178

2

-207.1010

98

-164.2464

51

0.29524800000001

5

-309.9152

27

-533.7256

16

-254.3571

96

-500-300-100100300500700900

WESTERN CAPE TRADE WITH VIETNAM, 2004-2013Va

lue

(ZAR

m)

RANK TOP 10 EXPORTS VALUE 2013 (ZARm)

% GROWTH 2012-2013

1 Crustaceans 136.8 885.17%

2 Ferrous waste or scrap, ingots or iron or steel 76.5 -26.64%

3 Grapes, fresh or dried 28.9 151.41%

4 Enzymes, prepared enzymes, nes 25.3 -19.39%

5 Citrus fruit, fresh or dried 21.5 155.79%

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

7 Apples, pears and quinces, fresh 8.8 52.27%

8 Fish, frozen, whole 7.3 63.49%

9 Composition leather, in slabs, sheets or strips 6.6 48.99%

10 Grape wines(including fortified), alcoholic grape must 6.0 41.63%

TOTAL EXPORTS 336.8 62.89%

Western Cape trade with Vietnam, 2013


RANK TOP 10 IMPORTS VALUE 2013 (ZARm)

% GROWTH 2012-2013

1 Rice 82.3 -24.08%

2 Footwear with uppers of textile materials 68.5 -24.30%

3 Coal, briquettes, ovoids etc, made from coal 55.6 -56.28%

4 Pepper (Piper), crushed or ground Capsicum, Pimenta 46.4 118.13%

5 Footwear with uppers of leather 44.7 -34.75%

6 Footwear nes, with outer sole, upper rubber or plastic 33.8 -53.39%

7 Footwear nes, sole not leather, rubber or plastic 21.8 -27.56%

8 Baked bread, pastry, wafers, rice paper, biscuits, etc 20.1 -26.92%

9 Trunks, suit-cases, camera cases, handbags, etc 19.1 -17.38%

10 Other furniture and parts thereof 17.7 30.15%

TOTAL IMPORTS 591.1 -20.17%

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

Top source markets & sectors of FDI into the Western Cape

An inspiring place to do businessSource: FDI Intelligence, 2014

UK United States Netherlands Germany France China Switzerland India Denmark Spain

%Projects 0.251184834123223

0.232227488151659

0.0758293838862559

0.0616113744075829

0.04739336492891

0.028436018957346

0.028436018957346

0.023696682464455

0.018957345971564

0.018957345971564

%Capex 0.154950793331994

0.19526009238803

0.0550932096624003

0.0635651554711607

0.0564151253446293

0.00958206284577042

0.0087951213277584

0.0169292848144023

0.00450437291168362

0.00583906954664135

3%

8%

13%

18%

23%

28%

BREAKDOWN OF FDI BY SOURCE MARKET, 2003- JUNE 2014

% S

hare

Software & IT services

Business Ser-vices

Financial Ser-vices

Communica-tions

Transportation Chemicals Alternative/Re-newable energy

Electronic Components

Consumer Products

Coal, Oil and Natural Gas

%Projects 0.180094786729858

0.175355450236967

0.0805687203791469

0.0663507109004739

0.0568720379146919

0.037914691943128

0.033175355450237

0.033175355450237

0.028436018957346

0.028436018957346

%Capex 0.046135587649948

0.0336339900308569

0.0258503898190582

0.141127280030674

0.0411583194873012

0.00802278661286494

0.132805053953879

0.00530226953203455

0.0206229801530063

0.225563731307857

3%

8%

13%

18%

23%

BREAKDOWN OF FDI BY SECTOR, 2003-JUNE 2014

% S

hare

Breakdown of FDI from Vietnam to South Africa


VIETNAM FDI TO SOUTH AFRICA, 2003- APRIL 2015

DATE INVESTING COMPANY

SOURCE CITY

DESTINATION STATE INDUSTRY SECTOR SUB-SECTOR CAPEX

(ZARm)

May-09 Nam Viet Joint Stock Company (NAVIFICO) Ho Chi Minh KwaZulu-Natal Wood Products Furniture, homeware & related products

(Wood Products) 144.47

Feb-04Vietnam National Garment & Textile Corp. (Vinatex)

Ha Noi Not Specified Textiles Clothing & clothing accessories 19.92

Oct-03 Vietnam News Agency (VNA)

Not Specified Gauteng Paper, Printing &

Packaging Printing & related activities 992.43

Total 1 156.82

• Nam Viet JSC (Navifico) establish a South Africa based wood furniture manufacturing plant near Pietermaritzburg. The company supplies furniture to Ghana and Angola and plans to expand its coverage of the African market.

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

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

Source: FDI intelligence, 2015

Selected Investment Opportunities


RENEWABLE ENERGY• Suppliers of parts and components for wind

turbines and photo voltaics;• Service and maintain wind and solar farms

AGRIBUSINESS• Aquaculture: Development of open water

aquaculture farms• Essential Oils: Oil extraction and processing

ICT• Software and IT services sector• Multiple ICT incubators & accelerators in

operation• Government core focus area

BPO• Government & private sector outsourcing• Growth from new ventures

Hotels & Real Estate• Construction of 3 to 5 star hotels- growing

tourism• Develop prime beachfront property

Metals & Niche Engineering• Metals conversion and steel fabrication• Manufacture automotive components,

Engineering services

Specific Investment Opportunities


Extract of Investment Projects currently available in the Western Cape

**Please note that Investment Projects operate as a going concern and thus projects listed in the Investment Project extract may no longer be available upon request, due to fulfilment/acquisition of investment targets. Wesgro is committed to updating the Investment Projects status on a regular basis.

Mega Projects


Sector Investment Size ($) Project Overview

Real Estate – Infrastructure & Development (Multi-Sectoral Possibilities)

$13.00billion Greenfield Project. A mega infrastructure project is planned for the Western Cape. Partners are being identified to support multiple components including: Finance, Construction, Logistics etc

Renewable Energy $500.0m Greenfield Project: 5 Project Opportunities available in Wind Energy. Company seeks equity partner.

Key Investment Projects



Bio-waste $40.0m Greenfield Project. Project involves recycling of agricultural waste into plastic. JV opportunity.

Energy Efficiency $10.0m Greenfield Project. Project focuses on heating technology for hot water systems. JV Opportunity.

Real Estate – Hotel & Hospitality $26.18m Brownfield Hotel Opportunity. 5-Star Hotel in Cape Town CBD. 61 keys

Real Estate – Hotel & Hospitality $21.0m Brownfield Opportunity. Includes Hotel and lifestyle estate with opportunity for 45 additional properties, golf course + numerous other add-ons including vineyards.

Real Estate – Hotel & Hospitality $12.5m Brownfield Hotel opportunity. Consists of a 65 key hotel, 12 villas and a health spa. Opportunity to add additional 20 rooms.

Real Estate – Hotel & Hospitality $5.4m Brownfield Hotel Opportunity. 4-Star Hotel in Cape Town CBD, 33 Keys + Bar/Restaurant/Conference Facilities. All zoning and licensing approved for operation of hotel.

Key Investment Projects (continued)



Real Estate – Hotel & Hospitality $5.4m Brownfield Hotel Opportunity. 5-Star Luxury Hotel in Cape Winelands, 35 Keys + opportunity to add an additional 15 rooms (plans approved)

Agribusiness $3.0m Brownfield Project. Opportunity exists to acquire 30% of a sauce manufacturing facility in the Western Cape.

Agribusiness $2.0m Brownfield Project. Opportunity exists to buy into business concerned with the manufacturing of neutroceuticals and fuel generated from Algae. Company is in pilot phase and seeks to raise capital to complete feasibility

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

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

Real Estate - Agriculture $3.5m Brownfield Wine Farm, Zoning has been granted to turn Manor House into Boutique Hotel

Key Investment Projects (continued)


Sector Investment Size ($)

Project Overview

ICT $15m

ICT e-commerce and website development platform seeks equity stakeholder. Business supported by Microsoft BizSpark Premium and Samsung

ICT $2.5mBrownfield Opportunity. A South African software development firm is seeking an equity investor, for the sale of a 25% stake in the business.

ICT $2.5m

Brownfield Opportunity. A South African software developer is seeking an equity partner to fund a software-based platform business focused on the agriculture and agro-processing sectors. The company won the IBM SmartCamp Africa pitching competition.

Film & Media $4.0m

Brownfield Opportunity. A South African animated media business, which has successfully launched three major animated movies, is seeking $4 million in order to develop 4 production scripts for additional movies

Point of Contact for Potential Investors:


Wesgro invites any potential investors or interested parties in the projects outlined to contact the Wesgro Investment Promotion Team:

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

Mr. James Milne: Investment Promotion Manager: ICT & Special [email protected]

mailto:[email protected]

mailto:[email protected]

Foreign subsidiaries in the Western Cape


Thank you | Dankie | Enkosi

Julius Okiror, Economist Vietnam Delegation 26 June 2015 An inspiring place to do business.

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Transcript of Julius Okiror, Economist Vietnam Delegation 26 June 2015 An inspiring place to do business.