Are these factors in a New Exports Era for South Africa?

Global trade must surely be one of the miracles of the modern world. Sourcing the best goods and services at the lowest cost, while finding global markets for local products, has produced immense wealth.

In light of the new BRICS (Brazil, Russia, India, China, South Africa bloc) reality, and access for local entrepreneurs and business to the rising and rapidly growing emerging markets, few seem to argue against imports and exports holding the key to healthy returns for local producers and an edge for importers able to cater to the domestic market.

Despite the recession and threats of protectionism, South African trade remains healthy, making brands such as Proudly South African important aspects of the country’s domestic production.

The shift from traditional trading partners was reflected most recently in talks with the Turkish government. With most eurozone countries drowning in debt and the Middle East a political hotbed, the Turks are shifting their export dependency from their traditional trading partners, according to the government. It is good news for South Africa.

Europe has been the country’s traditional trading partner, with a short-term threat for exporters lying in a potential eurozone crisis, with fewer Europeans purchasing South African products.

So how does South Africa take advantage of exports by driving local production?

Proudly South African has emerged as a core driver, branding locally produced goods in a bid to ensure South African consumers purchase homegrown products and services; and driving job creation domestically, as locally produced goods benefit South African workers.

Using the brand, “Buy local to create jobs”, the campaign was established in 2001.

“Buying South African stimulates an increased demand for locally produced products and services. This translates into the safeguarding of existing employment opportunities, economic growth, and the creation of more quality employment opportunities in our country,” argues the campaign, which was launched by the government, organised business, organised labour and community organisations.

Environmental standards, fair labour practice and a high-quality product are essential to qualify. “At least 50% of the cost of production must be incurred in South Africa, and there must be ‘substantial transformation’ of any imported materials,” according to the membership criteria.

The government and businesses that are behind the campaign say it is much more than a simple marketing gimmick: “It’s an internationally recognised competitiveness driver; an impetus for economic growth, employment creation, social change and greater overall prosperity.”

So what are the brands citing themselves as proudly South African, exporting to the rest of the continent?

Technology is rising as a South African export to Africa, rooted in arguably the world’s soundest banking system – as World Economic Forum data demonstrates.

First National Bank says that more than R1 billion has been transferred via its money transfer solution, eWallet, according to www.southafrica.info. The technology allows money to be sent to anyone with a valid South African mobile number.

Countries such as Brazil demonstrate the enormous uptake in technology when made available, giving impetus to South African companies to focus increasingly on mobile and online offerings that utilise the inevitable uptake in technology across Africa’s millions of consumers.

Today, technology has even defined how the South American citizenry engages with the government, with communication conducted between Brazilians and their local government over the Internet.

According to Nomura International, economic analyst Peter Attard Montalto predicts South Africa’s economy is unlikely to enter into a recession despite the threats in markets abroad. The secret seems to lie in BRICS and emerging market economies.

A possible eurozone crisis will hit hard South African exporters to the traditional partner; while increasing upward mobility among millions in the developing world offers more prospects.

In the case of Africa, the continent is estimated to constitute eventually 5% of global gross domestic product, while Asia will account for 50% in the decades ahead. It is a massive figure, cited by Absa group chief executive Maria Ramos during the recent Discovery Invest Leadership Summit, as she referred to possible growth scenarios outlined by The Economist.

She told Opportunity and others gathered at the conference that Africa’s potential cannot be undermined, given the relatively low 5% of global GDP; that figure will occur in the context of Africa receiving the possibly biggest boom of all regions. It is good news for South Africans in close proximity to their fellow African markets.

The case now lies in ensuring the country takes advantage of technology, energy and ethics if it is to serve as a continental leader.

South Africa’s agricultural capacity is not to be underestimated, even in the midst of climate change. Many seem to have shifted to adaptation measures that will prepare the sector for changing environmental patterns. The Proudly South African campaign has listed environmental sustainability as a key pillar, seeking to ensure local brands benefit both workers and the environment.

The agricultural industry has taken on a trade that touches the daily lives of consumers of South Africa’s fruit. In early October, Fruit South Africa’s Ethical Trade programme kicked into action, seeking to underscore South Africa’s trade with the world’s best practice on the triple bottom line.

“We are really excited to be launching this programme, which is based on South Africa’s progressive labour legislation, and uses international best practices in audit methodology and independent third-party auditors,” revealed Derek Donkin, chair of the new organisation. “This programme has a strong development emphasis, for example the creation of training material and toolkits to increase awareness (of) and improvement in labour practices.”

At present, exporting is helped by South Africa’s brand recognition, boosted by BRICS and its leading role on the continent. The successful hosting of the 2010 Fifa Soccer World Cup was another boost; and hosting summits such as the 17th Conference of the Parties (COP 17) to the United Nations Framework Convention on Climate Change (UNFCCC) – together with the facilitation of ethical trade stances – has proved useful.

Even prior to the most recent coverage of the latter two developments, earlier this year South Africa received the award for most valuable nation brand on the continent, with Anitha Soni, chairperson of the International Marketing Council of South Africa, receiving the accolade from the United Kingdom-based Brand Finance on behalf of the country.

Bongani Nkosi, who covered the award presentation, said positive perceptions of Africa’s powerhouse are a driving force in the growth of the tourism sector, according to experts.

“South Africa has become one of the fastest growing tourism destinations in the world,” said Oliver Schmidt, managing director at Brand Finance South Africa.

Nkosi added that it is not simply tourism that is benefiting from the country’s glowing brand – “the entire private sector is scoring, too.”

As Brand Finance CEO and founder, David Haigh, pointed out: “There’s no doubt that nation-branding contributes to the perception of South Africa’s products.”

South Africa’s Proudly South African brand currently features a prominent domestic aspect of local consumption for locals concerned about supporting local industries. Yet, as a whole, branding South Africa in the international context has seen Proudly South African take on a new meaning as global consumers familiar with the country engage with the nation’s unmistakable brands.

What started as specifically South African communities in the United States, Europe and Australia, demand for the country’s products overseas seems to have taken on the natural effect of creating awareness of the nation’s unique offerings. At present, South African wines and biltong are niche high-end brands, alongside flower exports.

The recession shows that top-end consumers have cut back far less than middle-income market participants, which is good news for local companies that have carved their South African brands into the consciousness of the world’s wealthy – a market increasingly shifting eastward and south.

High-end retailer, Woolworths, has expanded high-end clothing and retail to Nigeria, proof of the rising consumer power. The expansion is happening in conjunction with an existing Nigerian company.

“We are confident about our investment in Nigeria and we are very pleased with the growth prospects of the Nigerian market,” says Woolworths International executive, John Fraser. “The country has a large population with significant and growing middle- and upper income groups.”

His remarks were captured by a reporter with www.southafrica.info, who notes that the expansion is the first of what is likely to come for additional African markets.

South Africa’s tea; being the cultural capital in the form of music in particular; as well as everyday perishables are available at a number of outlets internationally, with the government providing a listing on www.southafrica.info that is targeted not at those visiting the country, but seeking out its offerings in markets abroad.

In a world of technology and rising opportunities, expectations are increasing. Emerging markets consumers seek the goods and services available to more established consumers; South Africa’s high-end export potential has the capacity to serve these rising demands in the context of high growth rates in Africa and fellow BRIC states.

Woolworths has been among a number of companies to increase their corporate social investment objectives alongside the bottom line of trade with the burgeoning markets. The retailer’s sustainable farming projects come in the mists of commodities-based companies implementing carbon-reduction measures in a sector where South Africa still holds considerable clout and influence.

The Gold Fields’ innovative methane capture, registered as a Clean Development Mechanism project with the UNFCCC, is one such example.

As COP 17 approaches, South Africa’s export policy will be increasingly required to lead fellow emerging markets in sustainability practices.

Former US vice president Al Gore, who visited the country earlier this year, told Opportunity and fellow audience members that a business case for sustainable development certainly exists. It is now up to South African policy-makers to create the environment for sustainable businesses to rise to meet market demands through best practice.

South Africa is poised to expand its successes rapidly. Traditional exports in commodities appear to be joined by a rise in high goods and services demanded the world over, in addition to technological and energy-based innovation being adopted abroad.

Garreth Bloor

• |2011-12-15 11:58:48 cedric mpho phala  - EXPORTING SOUTH AFRICAN MANUFACTURED PRODUCTS
  Exporting SA manufactured products will increase our countries wealth and create many business opportunities and job creation.
  
  We should be not afraid to challenge the business world but face it with believe and strong networking and identifying opportunities where others see obstacles.
  
  I am an exporter of different SA manufactured products and I am willing to assist those interested in exporting their products
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