UK names SA as high growth market

FTW: What has been the trend in export/ import volumes on the SA-UK route over the past year? DD: UK imports from South Africa have decreased by 27.6% overall whereas UK exports have dropped by only 1.5%. Without more detailed analysis, it’s hard to say why. Exports of some goods have grown exponentially (i.e. prefabricated buildings and their commodities.) It’s important to note that South Africa is the UK’s 22nd largest export market (2005) and South Africa is the UK’s 16th largest source of imports (2005). In 2006, trade in goods between the UK and South Africa was around £6 billion (R84bn), with significant UK investment in South Africa by household British names such as Barclays, Vodafone, Virgin Mobile and Associated British Foods. This demonstrates the confidence UK companies have in South Africa as an investment destination. FTW: What is the outlook? DD: The outlook remains positive as the commercial relationship between South Africa and the UK continues to flourish. With the UK’s sporting sector expertise, there is definite scope for further engagement in 2010 business opportunities. FTW: Any change in the type of commodities moving on the route – any areas of particular growth? DD: One strong growth area according to our stats is the agriculture sector – for both imports and exports. The UK exports its livestock, crops, machinery, equipment, technology and research skills all over the world and imports what it cannot grow for itself. A recent success has been the signing of an MoU in the Agri-food sector between the British Agri-food Consortium (BAC) and the South African Agri-Academy (SAAA), indicating their intention to work together to provide a range of developmental services to South African farmers and agri-businesses. FTW: Major challenges facing trade on the route. To what extent have the likes of China and India eroded volumes/growth? DD: The UK specialises in the manufacture of more R&D intensive high value products and the market share of these sold into South Africa is unlikely to have much competition from the likes of China and India. For imports into the UK from South Africa there could have been a loss of market share for South African products to cheaper goods coming from India and China but we have not had the opportunity to analyse these figures. FTW: Do you see currency fluctuations playing a big role in the year ahead? DD: Current exchange rates may help South African exports to the UK although we are conscious that it makes the cost of imports higher. The international high demand for commodities (raw materials like gold, iron ore, etc) will ensure that South Africa will continue to be an important trading partner for the UK. Volumes of exports of these products are likely to remain high as long as the international growth rate and manufacturing output stays high. We are keen to develop bilateral trade and investment through UK Trade & Investment’s offices in South Africa and are delighted that this country has been selected as one of a handful of high growth markets which include China, India, Brazil, Indonesia, Mexico, Russia, Saudi Arabia, Turkey and the UAE (United Arab Emirates) where the UK government is targeting increased resource to support UK companies wishing to do business in the market. UK Trade & Investment will also provide tailored assistance to South African companies wishing to expand their business into the UK.