'China will retain its sourcing dominance'

The Far East remains at the top of the agenda for many South African companies – including Sasfin Premier Logistics which is finding Mainland China more and more the dominant origin for import business. According to CEO Peter Ehrenreich, significant volumes of cargo are imported from Vietnam but China, where they have developed strong partnerships, remains the key player. “As with all other markets, the weakening of the rand linked with overall import volumes dropping 8-12% compared to the past year, have impacted negatively. This has put pressure on all links in the supply chain. It is clear that China is no longer as cheap as it used to be but it often remains the sole sourcing solution if products can’t be sourced domestically.” Ehrenreich says labour in particular is becoming more expensive in Mainland China while some unrest in Vietnam early in 2014 after the Vietnamese New Year also caused concern. “Higher sourcing costs overseas linked with the weakening rand is a cocktail that will cause some hangover,” he said. But China – and many other regions in the Far East – remains critical to South African forwarders. “China may have a lower growth rate at present but it is from such a large base that it is still phenomenal,” he said. “And we predict it is going to increase its standing as an importer of goods too as the buying power among the Chinese increases rapidly.” INSERT & CAPTION Higher sourcing costs overseas linked with the weakening rand is a cocktail that will cause some hangover. – Peter Ehrenreich