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Notice

Trade Mission to South Africa

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Information about this document as published in the Federal Register.

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AGENCY:

International Trade Administration, Department of Commerce.

ACTION:

Notice.

Mission Description

The United States Department of Commerce, International Trade Administration, U.S. and Foreign Commercial Service is organizing a Trade Mission to South Africa September 19-23, 2011, to help U.S. firms find business partners and help export equipment and services in Johannesburg and Cape Town, South Africa.

Targeted sectors are:

  • Sustainable and Efficient Energy Technologies, Equipment and Products.
  • Electrical generating equipment.
  • Renewable energy technologies.
  • Clean coal technology.
  • Transmission and distribution equipment and technology.
  • Energy efficiency building technologies and products.
  • Productivity Enhancing Agricultural Technologies and Equipment.
  • Crop production equipment and machinery.
  • Irrigation equipment and technology.
  • Crop storage and handling.
  • Precision farming technologies.
  • Educational Services and Skills Development.
  • Training and education services and systems.
  • Educational and training franchises.
  • Educational materials.

Although focused on the sectors above, the mission also will consider participation from companies in other appropriate sectors as space permits.

This mission will be led by a senior Department of Commerce Official and will include business-to-business matchmaking with local companies, market briefings, and meetings with key government officials.

Commercial Setting

South Africa represents the largest economy and most sophisticated and diversified industrial and services sectors in Sub-Saharan Africa. Recent reports show the economy recovering well from the recent global recession. Projections are for economic growth in gross domestic product (GDP) to average five percent for the next decades as the country continues to develop. Sectors such as energy, health care, agriculture, vehicles, processed foods, and others are poised for solid growth in South Africa. The country also stands to benefit from rapid growth anticipated in many of its Sub-Saharan African trading partners, where South African-based companies have strong market prospects. In 2009, total U.S.-South Africa trade was $10.3 billion, a significant decrease from 2008 levels of $16.4 billion. However, 2010 trade figures for January to September show growth in trade of over 40 percent above corresponding 2009 levels and indicate a strong recovery in U.S. exports to the country. Leading U.S. exports are machinery, vehicles, aircraft, chemicals, IT equipment and services.

Best Prospects in Mission Targeted Sectors

Energy

State-owned utility Eskom produces about 95 percent of the electricity used in South Africa and about 60 percent of the electricity generated on the African continent. Its operations incorporate power generation, transmission and distribution. Although Eskom has a total of 24 power stations in commission, with a total generating capacity of 42,011 MW, this has proved inadequate for the current electricity demand.

Eskom is building additional power stations and power lines on a massive scale to meet rising electricity demand in South Africa. Eskom's capacity expansion budget is $56 billion (R385 billion) up to 2013 and is expected to grow to more than R1 trillion ($144 billion) by 2026. It plans to double capacity to 80,000 MW by 2026. Since 2005 Eskom commissioned projects totaling an additional 4,454 MW and plans to deliver an additional 16,304 MW in power station capacity by 2017. This creates opportunities for U.S. firms to provide products, services and the latest clean coal technologies to the South African energy market.

According to the South African Government, 30 percent of all new power generation will be the responsibility of independent power producers (IPPs). In response to South Africa's plans to limit its CO2 emissions to below 275 million tons by 2025, Eskom, still the single buyer of all privately produced generation capacity, is studying the integration of solar generation from the Northern Cape Province, including its own World Bank supported Concentrating Solar Power (CSP) project, into the grid. The focus is to connect the first 1,000 MW, which could be introduced by 2016. Eskom is already rolling out plans for a 400-kV transmission system in the area.

The country's power supply shortfall has accelerated the need to diversify Eskom's energy mix and its move towards alternative energy sources, including various forms of renewable energy. The South African Department of Energy (DoE) recently released the Integrated Resource Plan (IRP 2010) for public comment. The IRP calls for diversifying sources of power and will call for renewable energy sources to supply 16 percent and nuclear sources to supply 14 percent of power by 2030. In addition, detailed work is currently under way to determine a range of near-term electricity demand-reduction options that could yield the equivalent of some 5,000 MW and help stabilize the South African system between now and 2016. Specific opportunities include renewable-energy generation, cogeneration, own generation, municipal generation and other independent power producer programs.

As part of its financial restructuring and capital expansion program, Eskom has received authorization to increase electricity prices to consumers by an average of 25 percent per year for the next three years, and will seek additional increases for the following several years. The effect of steadily rising energy costs for industry and consumers will be to create market opportunities for a wide range of energy saving technologies ranging from energy efficient building products, lighting, heating and air conditioning, metering, and similar products and technologies.

Agricultural Equipment

South Africa has by far the most modern, productive and diverse agricultural economy in Sub-Saharan Africa. It is a net exporter of agricultural and food products and is self sufficient in food products. South Africa offers U.S. exporters of agricultural equipment Start Printed Page 14921and technology a wide range of opportunities. The country's annual agricultural equipment market is estimated at approximately US$919 million. Tractor sales constitute 60 percent of the total agricultural equipment market followed by combine and baler sales. Five percent of all new agriculture equipment is being produced locally; 95 percent of all agriculture equipment and parts are being sourced from international markets, and at least 20 percent of new equipment and technologies are currently being sourced from the U.S. However, used equipment has limited market opportunities.

Agriculture is a leading component of the South African economy, employing a million people, and agro-industrial activity amounts to about fifteen percent of GDP, with substantial growth potential. Although eighty percent of South Africa's land is used for agriculture only 15 percent of that is arable, with the rest used for pastoral and other purposes. South Africa's recent broad-based agriculture empowerment charter (AgriBEE) aims to boost land reforms and black ownership of farmland to 30 percent by 2014. With the implementation of AgriBEE creating new land owners from previously disadvantaged communities, mission participants will have an opportunity to explore new emerging market opportunities for equipment and technology.

Educational Materials and Services

Many of South Africa's universities are world-class academic institutions, at the cutting edge of research in certain spheres such as mining and engineering. At about 5.3 percent of GDP and 20 percent of total state expenditure, South Africa has one of the highest rates of public investment in education in world terms. However, there are still huge imbalances in education in the country. The greatest challenges lie in the poorer, rural provinces like the Eastern Cape and KwaZulu-Natal. One of the country's greatest challenges is persistent unemployment as it grapples with the effects of a large unskilled labor force. For that reason, improving education and skills development are priorities for the government.

There is potential for U.S. companies offering training programs that will address the serious shortage of skilled labor force in sectors such as hospitality, utilities, construction, and transportation. On the business skills area, there is a need for programs that offer job skills assessment systems which help employers select, hire, train and develop prospective employees. Other opportunities include “learning centers” franchises, focusing on after-school care and tuition, both for primary and secondary students/learners, in the areas of arithmetic, math and science respectively. Franchising opportunities also exist for adult learning centers, given the large number of people with gaps in their formal education, in the area of languages, computer training, and general business skills.

Mission Goals

The goal of the South Africa Trade Mission is to provide U.S. participants with first-hand market information, one-on-one meetings with business contacts, including potential agents, distributors and partners so they can position themselves to enter or expand their presence in the South African market. South Africa, with its well developed business and financial sector, its indigenous multinational enterprises, substantial foreign investment, and well developed infrastructure, is often seen as the point of access to develop markets throughout Sub-Saharan Africa. Subject to prior consultation and confirmations, mission participants will have the opportunity to explore contacts with local firms active in the region and will have the option of extending their stay for additional business development activities in South Africa or meetings in neighboring countries.

Mission Scenario

The South Africa Mission will visit both Johannesburg and Cape Town, allowing participants to access the two largest markets and business centers in the country. In each city, participants will meet with new business contacts.

Proposed Timetable

Day of weekDateActivity
SundaySept. 18Arrive in Johannesburg.
MondaySept. 19, JohannesburgMission Meetings Officially Start. Breakfast briefing with U.S. Embassy Staff. One-on-one business appointments. Evening business reception.
TuesdaySept. 20, JohannesburgOne-on-one business appointments continue.
WednesdaySept. 21, Travel to Cape TownBriefing by Cape Town Consulate Staff. One-on-one business meetings. Evening business reception.
ThursdaySept. 22, Cape TownOne-on-one business appointments continue. Mission Officially Ends.

*Note:

The final schedule and potential site visits will depend on the availability of local government and business officials, specific goals of mission participants, and air travel schedules.

Participation Requirements

All applicants will be evaluated on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. The mission is designed for a minimum of 15 and a maximum of 20 companies to participate in the mission from the applicant pool. U.S. companies already doing business in the target markets as well as U.S. companies seeking to enter these markets for the first time are encouraged to apply.

Fees and Expenses

After a company has been selected to participate on the mission, a participation fee to the U.S. Department of Commerce is required. The participation fee for one representative is $2,125 for a small or medium-sized enterprise (SME) [1] and $2,565 for large firms. The fee for each additional firm representative (SME or large) is $450. Expenses for travel, lodging, some Start Printed Page 14922meals, and incidentals will be the responsibility of each mission participant.

Conditions for Participation

  • An applicant must submit a completed and signed mission application and supplemental application materials, including adequate information on the company's products and/or services, primary market objectives, and goals for participation. If the U.S. Department of Commerce receives an incomplete application, the Department may reject the application, request additional information, or take the lack of information into account when evaluating the applications.
  • Each applicant must also certify that the products and services it seeks to export through the mission are either produced in the United States, or, if not, marketed under the name of a U.S. firm and have at least 51 percent U.S. content of the value of the finished product or service.

Selection for Participation

  • Suitability of the company's products or services to the mission goals.
  • Applicant's potential for business in South Africa, including likelihood of exports resulting from the mission.
  • Consistency of the applicant's goals and objectives with the stated scope of the mission.

Additional factors, such as diversity of company size, type, location, and demographics, may also be considered during the selection process.

Referrals from political organizations and any documents containing references to partisan political activities (including political contributions) will be removed from an applicant's submission and not considered during the selection process.

Selection Timeline

Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Commerce Department trade mission calendar—http://www.trade.gov/​trade-missions/​—and other Internet Web sites, press releases to general and trade media, direct mail, broadcast fax, notices by industry trade associations and other multiplier groups, and publicity at industry meetings, symposia, conferences, and trade shows.

Recruitment for the mission will begin immediately, and conclude at 11:59 p.m. on July 18, 2011. Applications received after 11:59 p.m. on July 18, 2011, will be considered only if space and scheduling constraints permit.

Contacts

Teresa Yung, International Trade Specialist, Global Trade Programs, U.S. Commercial Service, Washington, DC 20230, Tel: 202-482-5496, Fax: 202-482-9000, E-mail: teresa.yung@trade.gov.

Larry Farris, Senior Commercial Officer, U.S. Consulate, Johannesburg, South Africa, Tel: +55-11 290-3316, Fax: +55-11 884-0538, E-mail: larry.farris@trade.gov.

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Teresa Yung,

Global Trade Programs, Commercial Service Trade Missions Program.

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Footnotes

1.  An SME is defined as a firm with 500 or fewer employees or that otherwise qualifies as a small business under SBA regulations. See http://www.sba.gov/​contractingopportunities/​owners/​basics/​whatismallbusiness/​index.html. Parent companies, affiliates, and subsidiaries will be considered when determining business size. The dual pricing reflects the Commercial Service's user fee schedule that became effective May 1, 2008. See http://www.export.gov/​newsletter/​march2008/​initiatives.html.

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[FR Doc. 2011-5993 Filed 3-17-11; 8:45 am]

BILLING CODE 3510-FP-P