South Africa is Minnesota’s biggest trading partner on the African continent. Exports from Minnesota to South Africa have increased from $32.1 million in 2003 to 61.7 million dollars in 2007. The Council on Great Lakes Governors described their 2007 mission to South Africa as very positive. Richard Zurba a representative of the Council describes the market as:
“…a fast adopter of new, innovative and high-tech imports. American technological innovations combined with a currently low U.S. dollar allows American companies to compete favorably against domestic and international competition in that market. South Africa’s economy has been experiencing rapid growth as business and consumer confidence, as well as the stock market, have been at record highs.”
There has been a steady flow of activity between Minnesota and the South African Consulate since the beginning of 2006. This interaction has resulted in a number seminars conducted in collaboration with the Minnesota Trade Office. Other events included South Africa’s participation in the Pan African Trade and Investment Summit held in Minnesota as well as a flagship skills development project between Hennipin Technical College and the South African National Tooling Initiative. These activities culminated in the launch of the SA-Minnesota Business Council. As a result of all this excitement that was generated the Deputy Director General (DDG) of the Department of Trade and Industry, Mr. Iqbal Sharma and the Office of the Presidency decided to undertake a trade mission to Minnesota.
The objective of the trade mission is to support the activities that are currently gaining momentum between Minnesota and South Africa and to strengthen the relationship between businesses in Minnesota and those in South Africa. He will also use this occasion to discuss the latest developments in the market. The DDG will also use this opportunity to discuss some of the challenges South Africa is faced with and to share some of the solutions that the government is working on to address these challenges. This mission will also serve as a way of reaching out to Small, medium and large companies to invite them to look at South Africa as way to expand their businesses on the continent. It is a well known fact that South Africa is the gateway into sub-Saharan Africa and the World Bank stated that the region is set to grow at an astonishing 6% this year, despite the sluggishness of the global economy. South Africa will soon be in a position to provide Midwest companies with duty free access into the Middle East, India and China as a result of free trade agreements that are currently being discussed between South Africa and these countries. Already US companies in South Africa are benefitting from the African Growth and Opportunities Act (AGOA) that allows for selective African products to enter the US market duty free.
The DDG will be accompanied by regional investment promotion agencies and Industrial Development Zones, who will present a number of select bankable projects currently available in their regions. These agencies will provide details on accessing these projects; they will discuss the funding sources available and provide information on the incentives in their regions.
The program will run over two days and the draft schedule will be formatted as follows:
Day 1:
Breakfast session on Doing Business in Minnesota
One to One meetings and Site visits
Lunch seminar
Cocktail reception
Day 2.
Breakfast session with MD Donaldson South Africa (panel discussion)
One to One meetings
SUMMARY OF PROJECTS
Richards Bay
Aloe Ferrox processing plant;
Establishment of a plant to extract and process sap from indigenous Aloe Ferrox plant to produce cosmetics and antiseptic, anti-inflammatory, and antibacterial products. The pulp of the leaf itself contains 34 amino acids, 14 enzymes, and numerous biological actives that moisturize, heal, and retexturize skin.
Light Auto Assembly and Logistic Park:
ASP is a grouping together of light industrial assembly and manufacturing operations that are laid out to consolidate the entire infrastructure necessary to provide an integrated service to the automotive industry. The core of the park will be a logistics hub with global communications and regional interfaces for component delivery and material supply.
Bio -fuel project:
Establishment of a plant to extract and process locally sourced agro-products for environmental friendly, non-fossil diesel substitute for export markets.
Granite processing plant:
The specific project is a granite processing plant, feeding off SA’s 900 000 tons per annum of granite blocks. The product will be some 60 000 t.pa of polished slabs, specifically for the Italian market. The project is worth US$ 110 million, with a Return on Investment of 20%.
Fertilizers
Various chemical opportunities present themselves, inclusive of aluminium fluoride, hydrofluoric acid, fumed silica, purified phosphoric acid of food grade, and fertilizers. This fertilizer project exist , as a direct result of an existing phosphoric acid plant in Richards Bay, with a production capacity of 1 million t.pa. This as well as other raw materials will be used to produce 1 mill t.pa of compound fertilizers; that is nitrogen, phosphorus, and potassium. The project would be worth US$ 300 mill.
Aluminum wheels
Opportunities abound with respect to aluminum, as a result of two of BHP Billiton’s aluminum smelters being within Richards Bay, producing a combined total of 800 000 tons per annum, of molten alloy, T-Bar, ingots, and billets. Of the various downstream opportunities available, inclusive of extrusions, I wish to highlight the casting of aluminum wheels. The cost savings are specifically aligned to low cost electricity and the energy savings resulting from using molten aluminum. The project, is to produce 350 000 wheels pa., is worth US$ 14 million, and has a Return on Investment of 18%.
Renewable Energy: Wood pellets:
Renewable energy is the new and exciting industry and opportunities are available in the bio-fuels and bio-mass sub-sectors. The project highlighted here, is to utilise bio-mass (waste wood, wood chips and sawdust) and extrude 72 000 t.pa of wood pellets for use in European power stations. The project is worth US$ 9 mill with a Return on Investment of 25%.
Northwest Province
Platinum Total value of projects: $ 101,25 million
A. The establishment of a Platinum Centre of Excellence in which related initiatives will be explored in order to identify a niche in the automotive industry.
B. The establishment of a Platinum Visitors Centre affords visitors a chance to experience how platinum is mined, processed and beneficiated into jewellery, which will in turn contribute to the increase in tourism as well as provide a basis for local economic development in the greater Rustenburg areas.
C. The establishment of mining technology and equipment suppliers park and show room tailored for supplying the platinum and chrome mining industry.
Bio - diesel Total investment / partnership required $25 million
Establishing of plantations to be harvested for the production of bio -diesel and the establishment of a refinery.
Energy Total value of investment $27.25 million
Recycling of waste gas of the Hernic Ferrochrome Smelter to be converted into 52 MWH electrical power. Pre-feasibility study on the proposed gas project has been conducted. A PIN has been registered with the South African National Designated Agency as a fuel switch project. The feasibility study is being conducted.
Cement Facility: Total value of investment $ 106.25 million
The establishment a lime stone mine and cement manufacturing facility in Mafikeng . Prospecting stage on 100 million ton deposit already concluded. Principle mining and manufacturing partner required.
Meat processing plant: Total value of investment $ 75 million
The establishment meat processing plant in the Klerksdorp area for the production processed meat products for the export market in Europe . Feasibility study is very positive. Land is being identified in conjunction with Anglo Gold Ashanti. 50% Joint venture partner required.
Gauteng Province
Fish Farming and Processing: Total value of project $9.37 million
Looking at the Development of a Modern Fish Farm in Gauteng.
It would be environmentally friendly as no toxic methods will be used
Will produce high quality Tilapia and European Catfish.
Will employ 600 people in the first phase.
Two other phases include hydroponic and fish processing stages
Total value of Project is R75m
Type of Cooperation Envisaged: Joint Venture and/or Equity Partnership
Tshwane International Convention Centre: Total value $500 000 000
This Development is a Partnership between the City of Tshwane and PICEC Consortium.
It has the objective to develop the TICC on a 14 hectare property
This will include two hotels, penthouses, retail and office park
Total value of Investment is around R4bn
PICEC Consortium has 3 shareholders - CIH, BIH and Chietain Property Group. It is 70% black owned in line with South African Transformation Policies
Cooperation required : Looking for Equity Partners at two levels :
(a) Investment and Rights Co. and (b) Development and Property Co.
Mpumalanga Province
Manufacturing of Mini Cascade Rings (Stainless Steel): Total value of project $ 375 000.
The purpose of this project is to manufacture pall rings and cascade mini-rings, these rings are used in refinery plants during maintenance shutdown. The project will initially produce mini cascade size 2; 2, 5, and 3 type 304 stainless steel. The project has secured a contract to supply stainless steel pall rings to SASOL, and the project will use SASOL as a base to access other markets. The objective of this initiative is to fabricate and supply pall rings to SASOL and then develop market access into refineries in the local and export market, imports replacement. The products are also applicable in the power generation industry.
Ownerships Approach: Technical/equity partner required to partner with local partner
Market Potential: Total markets of R45 million in South Africa
Project requirement: Looking for technology or technical partner to produce the products
Food technology center: Total investment $2.25 million
The objective of the centre will be to provide a range of infrastructure and equipment, suitable for the requirements of small-scale food processing enterprises at affordable costs. This will enable new enterprises to enter the food processing market.
This is an initiative by the Provincial Government and MEGA to establish a food processing centre/ incubator. The agro-food sector in the Mpumalanga Province contributes a growing 5% to the Gross Geographic Products. The Centre will have 4 components: Processing facility ; Incubator programme; Training and information services; Food science laboratory services. The support at the Center will include qualified experts, such as marketing specialists and food technologists and entrepreneurs will be able to use the facility to manufacture food products according to the highest quality and hygiene standards without having to make an expensive investment into equipment and infrastructure. Feasibility study and business plans are in the process of being completed.
Project Status: Feasibility Study completed and currently at conceptual state.
Ownership: Government driven initiative.
Requirement: Technology from Private sector, Government, Donor and multilateral agencies
Manufacture of builders joinery and carpentry of wood.: Total value of project $ 3.75 million
The Mpumalanga province has a booming and well established forestry sector; this project seeks to further develop the industry by beneficiating wood, there by creating jobs, building the manufacturing capacity in the construction of residential and industrial Properties
There is a growing trend in the construction industry with reference to residential, industrial retail and commercial sector. This industry has seen a growing consumption of wood related products in builder’s joinery carpentry of wood. This project also aims to contribute in the building material to the growing construction and building industry. The wood processing sector contributes 8% of the Gross Geographic Product (GGP). Residential and non-residential, addition and alterations and home improvement markets present opportunities in the overall building market for builders joinery and carpentry of wood products. The current capacity of most building materials (especially builder’s joinery and capacity of wood) manufactures is under severe strain and softwood lumber production is battling to keep up with the demands of the country’s construction industry. The market for BJCW products is derived from primary building and construction sector, approximately 65% of BJCW products are sold into the building industry and 35% into construction
Industry: Post and Beams, Windows, Doors and their Frames, wooden floors and skirting
Ownership Approach: Foreign ownership/JV with local partner
Market Potential: An R8,5 billion market potential in South Africa
Requirements: Foreign Direct Equity investor with a possible JV partnership with local manufactures.
Fuel dyes / Chemicals and Chemical products: Total value of project $2.5 million
Further beneficiation of chemical feedstock to cater for the oil industry in oil producing countries in Africa. Fuel dyes are specialty chemical product used internationally as fuels additives to enable consumers to differentiate and identify different grades of fuel. Study revealed that currently not more than two producers of fuel dyes as a sub-sector of the dyestuff.
Project Status: Scoping study Completed.
Ownership Approach: Foreign ownership/JV with local partner
Market Potential: The oil industry in South Africa and the north western oil producing states
Requirements: Foreign Direct Equity investor with JV possibilities.
Energy and Densification Systems-Discard Coal Project: Total value of project $2,5million
EDS / Russil Tech Densifiers want to mill selected waste coal dumps to recover usable coal and thereby increase the life and economies of the SA coal market and reduce the environmental problems. The waste coal can be produced into steam fuel, briquettes, blocks and biomass pellets. Densification/milling and blending of both discard coal and biomass should be practiced and sold as local or export steam power station feedstock.
Project Status: Scoping study Completed.
Ownership Approach: Local ownership/ foreign technical partner
Market Potential: The electricity and energy sector in South Africa, Industries, Mines and European countries, looking for cleaner fuel that reduces emissions
Requirements: Foreign Direct Equity investor with JV possibilities.
Manufacturing of starch : Total Value of project $875 000.
Manufacture starch from potato and potato waste.
Project Status: Existing manufacturing plant.
Ownership approach: JV with potential partners.
Target Market: South Africa and the SADC region.
Project Requirement: This is an existing business. The owner is looking for a Joint Venture technology partner to expand the business.
Contact: http://www.midwestusachina.com/
