INTERNATIONAL TRADE

The Italian connection

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Building bridges between South Africa and Italy.

South African and Italian industrial systems are complementary in several aspects. South Africa requires medium-high technology SMEs, which are one of the key strengths of Italy’s industrial system, in addition to the world-class manufacturing excellences (among these, fashion, agri-business, machinery/equipment and automotive).

On the other hand, South Africa has a complete structured financial system, a growing internal demand and a sound-manufacturing base with excellent opportunities for expanding in African and other international markets.

“A better shared knowledge of Italy and South Africa with their respective regions is pivotal to building a profitable political and economic partnership,” says Nico de Kock from Grown Consulting, a development consultancy devoted to developing people, organisations, and communities via various internationally acclaimed and locally accredited training solutions. In addition they offer services in organisational development, corporate governance, CSI and enterprise and community development solutions.

“Significant opportunities are at hand to herald an exciting new era of trade and economic links between sub-Saharan Africa and Europe, and the two countries are ideally placed to play leading roles in this initiative. South Africa and Italy have had a long-standing and fruitful relationship since the struggle for the democratisation of South Africa.

“The two countries have many things that could be mutually beneficial, but – at present – their strategic, economic and business relationships are not exploiting their full potential. South Africa is the leading economy of and a gateway to a continent, with immense cultural and economic potential that is emerging quickly. South Africa is also an important member of the BRICS, the new vibrant economies of the 21st century. Italy is a strong economy with a rich backbone of small- and medium-sized companies in sectors ranging from agriculture to high technology, which are the ideal partners for South African entrepreneurial companies,” says De Kock.

According to him, South Africa is also the best and most qualified platform from which to launch a new constructive dialogue – economic, business and cultural – between the leaders of the two countries and also of the two continents to which they belong: Africa and Europe.

The bilateral trade between South Africa and Italy (total value of€3.5 billion in 2013 – total value of R51.5 billion in 2013) and the investment flows (250 million in 2012 – R3.7 billion in 2012) is below its potential. The approach will be to focus on the strengths of both countries to exploit the opportunities to grow together and faster, according to De Kock.

“After in-depth research, analysis and discussions with industry leaders from both countries, a framework for key opportunities has been developed to address specific needs in selected sectors,” says De Kock.

This comes in the form of the first South Africa-Italy Summit on 2 and 3 October 2014 in Cape Town, launched by The European House-Ambrosetti in conjunction with their South African partner Grown Consulting. The purpose of creating this community, that will from now on gather annually, is to foster a strong, long-lasting partnership between entrepreneurs and enterprises of the two countries, and between South Africa and Italy. The inaugural summit will mainly focus on manufacturing, energy and agri-business.

Manufacturing is an important challenge for South Africa. Manufacturing’s share of South Africa’s economy fell from 21,9% in 1992 to 12,4% in 2012. On the contrary, Italy’s has grown and it is the second highest manufacturing country in the EU with a manufacturing gross added value of 216.5 billion Euro.

South Africa is relying on coal and oil for more than 93% of its energy production, while in recent years there has been a major push towards cleaner and renewable energy sources. There are various opportunities for Italy to partner in programmes on new technologies including smart grids and energy efficiency.

“South Africa’s total importation of agri-food products from Italy is less than 1%, making it a huge opportunity for growth. Italy has extensive experience and expertise to offer South African companies in managing small farms, agri-processing and food packaging,” says De Kock.

Working papers will be presented in these key areas during the summit in order to provide a constructive base for improving bilateral trade.

The inaugural summit will bring together 120 selected CEOs, leading economists and governmental authorities from the two countries, creating a community of South African and Italian leaders for investing in both countries and their related regions.

Paolo Borzatta from The European House-Ambrosetti says that, as an international strategy consultant with experience on different continents, this approach – to build a community – is the only way of creating the necessary trust, confidence, and shared strategic vision for increasing significant investments in foreign countries.

An international think tank, composed of influential business leaders, politicians and experts, will provide the summit with innovative and effective strategic insights and ideas to enhance economic, business and cultural ties between South Africa and Italy. Among the members are Alec Erwin (former South African minister of Public Enterprises and former minister of Trade and Industry), Maurizio Mariano (founder and director of BBM Law firm), Tseke Nkadimeng (CEO: Afric Oil), Ndaba Ntsele (executive chairman and co-founder of the Pamodzi Group), Prof Andrea Riccardi (former Italian minister for International Co-operation), Dr Iqbal Survé (founder and chairman of Sekunjalo Group), H.E. Vincenzo Schioppa (ambassador of Italy to South Africa) and H.E. Nomatemba Tambo (ambassador of South Africa to Italy).

According to Vincenzo Schioppa, Ambassador of Italy to South Africa, the position of Italy vis-à-vis South Africa is still well under potential. Italy is an ideal partner for South Africa, and vice versa. Our economies are complementary, and there are an enormous array of partnership opportunities.

“This is even more true when one considers, on one hand, the presence in South Africa of a dynamic, wealthy, well-integrated and highly respected Italian community (more than 35,000 passports) and, on the other, the close rapport the Italians have with the black people, since the struggle against apartheid. One example for all: the city of Reggio Emilia, where Oliver Tambo spent significant time during his exile, was the only city in the world to be invited to the inauguration of Nelson Mandela as South Africa’s first democratic president in 1994 – a true sign of the acknowledgement of Reggio Emilia’s and Italy’s merits.

“Moreover, South Africa should not be considered as merely a single market, but rather as a hub, a gateway to much larger African and non-African markets. Producing together, for selling in and out the country: that is the recipe for creating economic and social profit for both Italy and South Africa,” Schioppa says.

Lindsay King

 

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