Address By Deputy Minister of Trade and Industry, Hon. Mzwandile Masina On the occasion of the SA-Netherlands Business Forum

Director General of Logistics and Mobility of The Netherlands

Presidents of Dutch and South African Industry Associations

Representatives of the Dutch business delegation

Representatives of South African businesses

Distinguished Guests

Ladies and Gentlemen

It is an honor for me to address you at the South Africa-Netherlands Business Forum on the occasion of the Official Visit of H. E. Mr Mark Rutte, Prime Minister of the Kingdom of The Netherlands to South Africa.

The Netherlands has a very long and reputable history as a trading nation and the two countries have continued to grow their trade with each other over the years. Total trade between the two countries amounted to more than R48 billion in 2014, an increase of 26% compared to 2013.

The Netherlands was South Africa’s 7th largest export market in 2014 and our exports to The Netherlands grew by 21% last year to reach nearly R33 billion. The Netherlands is one of very few countries in the European Union with which South Africa enjoys a trade surplus.

This also highlights the importance of The Netherlands as a major gateway to the EU with its highly sophisticated and organized logistics systems and networks. This is of particular importance for our exports of fresh fruits to the EU as the sector is a key contributor to exports as well as job creation

Ladies and gentlemen Netherlands is  an important investor in South Africa, occupying the 15th place in terms of foreign investor countries, with a total Capex value of more than R15 billion. According to FDI Intelligence figures a total of 25 FDI projects by Dutch firms  were recorded over the last six years totaling nearly R6 billion and creating roughly 800 jobs.

The largest investments were in the renewable energies-, biotechnology-, transport-, chemicals- and food sectors. This is highly encouraging and we are confident that FDI from The Netherlands into South Africa will continue to grow and we trust that this visit by the Prime Minister and this delegation will lead to further investment by Dutch companies in South Africa.

South African companies have also invested in The Netherlands with total investment over the last six years amounting to just under R1 billion. The major investments were from the paper and printing-, oil and gas-, as well as software and IT services sectors.

In order to eliminate poverty, reduce unemployment and reduce inequality the South African Government is implementing the National Development Plan, Vision 2030. The NDP provides for a coherent and pragmatic approach to grow and transform the economy. Within this context and during the State of the Nation address, our President announced a 9 point plan to boost economic growth and create jobs. The focus of the 9 point plan encompasses the following:

  1. Revitalization of the agriculture and agro-processing value-chain;
  2. Advancing beneficiation (adding value to our mineral wealth);
  3. More effective implementation of a higher impact IPAP;
  4. Unlocking the potential of SMME, co-ops, township and rural enterprise;
  5. Resolving the energy challenge;
  6. Stabilizing the labour market;
  7. Scaling-up private-sector investment;
  8. Growing the Ocean Economy;
  9. Cross-cutting Areas to Reform, Boost and Diversify the Economy including in amongst others Science, Technology and innovation, Infrastructure and ICT.

The first of the 9 points is to revitalize the agricultural sector and the agro-processing value chain and Netherlands is certain to be one of our major partners in realizing this objective.

Also in unlocking the potential of co-ops, The Netherlands is a world leader and has been cooperating with the Small Business Development Department in assisting to grow capacity and grow co-ops in South Africa. An agreement between the Small Business Development Department and the Dutch Government was signed yesterday at the Union Buildings.

Ladies and gentlemen, South Africa’s economic growth is totally linked to that of Africa as a whole. That is why it is crucial in developing not only our country’s economy, but simultaneously of the African continent. African countries are amongst those showing the fastest economic growth and the continent is set to become next economic success story. Leading economists have predicted that Africa will be home to seven of the world’s fastest growing economies over the next five years.

Within this context, South African companies have been investing increasingly in Africa and can be very important partners for foreign companies to enter the African market together. South African companies have a wealth of business experience in Africa, as well as established corporate networks. Competitive advantages of South African businesses operating in Africa include geographical proximity, logistical support from the South African home base, market knowledge and technological adaptation capabilities.

In this regard Dutch companies  and particularly the large multi-nationals should are encouraged to explore the possibility of introducing South African subcontracting/engineering firms into their supply chains, as component or sub-assembly suppliers.

This sector offers many opportunities for South African firms and we have a large number of companies with capabilities and capacity to supply this market, often with highly sophisticated components in the electronics, metals and composites sectors. South Africa also has specific expertise and competencies in supplying and servicing the oil and gas sector, including the offshore industry.

The Netherlands being a gateway into the EU certainly has a lot to offer in partnering with South Africa in further developing South Africa as a springboard into Africa.

Ladies and gentlemen, this year will see the implementation of the Tripartite Free Trade Area which is an agreement between the Heads of State of 26 African countries to establish a free trade area. It combines the Southern Africa Development Community, the Common Market for Eastern and Southern Africa and the East African Community.

This economic integration will create a common market which will comprise of 600 million consumers, a combined GDP of one trillion dollars and offer enormous opportunities for business, including from The Netherlands.

Infrastructure development will be a major driving force in unlocking this growth potential. Inadequate infrastructure is one of the main factors inhibiting trade, integration and economic development.

It has been calculated that if the continent continues to narrow its infrastructure gap, economic growth will receive a further large boost – perhaps by as much as 2 percentage points a year.

Our President, HE Mr JG Zuma is the champion of the North-South corridor with particular emphasis on road and rail infrastructure and I implore you to collaborate with us in realising the deliverables of this programme.

South Africa will provide the prerequisites of the projects including pre-feasibility analysis, project origination and financing. Our State Owned Entities such as Industrial Development Corporation, Development Bank of South Africa, Public Investment Corporation and Transnet are ready to lead the implementation thereof.

The Corridor Projects offer many opportunities for companies from The Netherlands and South Africa to cooperate. With Netherlands as a major transport and logistics hub in Europe, I am certain that discussions will be taking place during this visit on these important issues and that companies will seize these opportunities.

Looking at cooperation between South Africa and The Netherlands, a good example of cooperation in the transport and logistics field is the project to increase the use of rail transport for the transport of fresh fruit from the northern regions of the country to the port of Cape Town from where it is exported.

The objective being to have an efficient, cost effective and sustainable rail intermodal transport solution between upper inland hinterland regions and the port of Cape Town.

Another example of support from The Netherlands is the assistance given by the CBI, the Dutch Centre for the Promotion of exports from developing countries to the EU, which is greatly appreciated. At present CBI is assisting approximately 20 South African companies producing natural ingredients for the Cosmetics Sector to become export ready and able to supply the export market.

This will assist each company in developing their export strategy in supplying the value chains of international cosmetic companies. They will also be taken to international trade fairs as part of the programme, over a period of three years.

the dti welcomes this support and collaboration and encourages fruitful cooperation between Dutch and South African companies. We certainly trust that this visit will lead to much greater cooperation between the two countries and lucrative trade, investment and cooperation between The Netherlands and South Africa. I wish you well with your networking and discussions and we look forward to the results thereof in the near future.

Thank you.

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