South Africa - Japan

Business Opportunities

Agro-processing business opportunities for

exploitation in South Africa

Presented by Mr M.V. Thindisa

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別添１

PRESENTATION OUTLINE

Government policy on agro-processing

Significance of the agro-processing sector in SA Economy

Trends in agro-processing industry

Why should you invest in South Africa?

Conclusion

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Linkage with key National Plans

Agro-processing industry is among the sectors identified by the following key

national plans noting the potential to spur growth and create jobs owing to its

strong backward and forward linkage with other sectors of the economy.

National Development Plan (2011);

Industrial Policy Action Plan (2013);

Integrated Growth and Development Plan (2012);

Agricultural Policy Action Plan (2014)

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Policy objectives

Rural industrialisation through establishing agro-processing industries closer to primary products;

Local economic growth through increased and deepened trade of processed

agriculture, forestry and fisheries products;

Job creation encouraged by the establishment and support of SME agro-

processors;

Improved livelihoods of both SME agro-processors and smallholder producers; and

Enhanced food security and increased food availability resulting from reduced

post-harvest loses.

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Why

the focus on agro/food processing?

Global Competitiveness Report

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Significance of agro-processing sector (2014)

Sector GDP Employment Investment

Agriculture, forestry and fisheries

2,4% 5,8% 1,9%

Manufacturing sector 16,9% 9,2% 19,1%

Agro-processing 4,8% 3,6% 3,1%

GDP Employment Investment

Agro-processing 28,7% 39,3% 16,2%

Relative contribution of agro-processing to the total manufacturing

sector in 2013

NDP sets economic growth target of at-least 5% by 2019

Output: Agro-processing

NDP states that rural economy should be revived through increase in

production and subsequently processing of primary products

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South African Trade Leaders

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SA net trade, 2013

Net Exports Net Imports

Dynamics in the SA consumer environment:

CLASS MOBILITY

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LSM 1 LSM 2 LSM 3 LSM 4 LSM 5 LSM 6 LSM 7 LSM 8 LSM 9 LSM 10

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2004 2008/9 2013

+25%

+69%

+99%

+82%

+68%

+22%

-85%

-21% -59%

-72%

Staple food expenditure patterns of

socio-economic sub-groups (StatsSA IES 2010)

Poorest 30%: >> > >

>>

Middle 50%: & > &

>>

Wealthiest 20%: & > >

&

32% 21% 15% 10% 1%

23% 20% 16% 13% 2%

17% 16% 9% 5% 5%

TRADE BALANCE IN PROCESSED FOOD PRODUCTS

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Export Import

PROCESSED FOOD EXPORT DESTINATION’S SHARE OF

CONTINENTS IN 2014: Q2

Africa 50%

Europe 24%

Asia 16%

Americas 7%

Oceania 3%

Gateway to AFRICA

SOUTH AFRICA’S MAIN EXPORTED PROCESSED FOOD

PRODUCTS IN 2014: Q2 Food product Total amount

(R million) Food preparations nes 418

Flour or meal, pellet, fish, etc, for animal feed 378

Fish fillets, fish meat, mince except liver, roe 348

Refined sugar, in solid form, nes, pure sucrose 331

Grapes, dried 273

Macadamia nuts: shelled 226

Peaches, otherwise prepared or preserved 204

Maize (corn) groats or meal 198

Refined soya-bean oil, not chemically modified 174

Sauces nes, mixed condiments, mixed seasoning

Raw sugar not containing added flavouring or colouring matter: other cane sugar

173

Wheat or meslin flour 117

Pears, otherwise prepared or preserved 117

Soups and broths and preparations thereof 111

Animal feed preparations nes 109

Opportunity for expansion exists – Innovative

processing methods

THE SHARE OF CONTINENTS AS A SOURCE OF FOOD

IMPORTS IN 2014: Q2

Africa 2%

Americas

20%

Asia

32%

Europe 43%

Oceania

3%

SOUTH AFRICA’S MAIN IMPORTED PROCESSED FOOD

PRODUCTS 2014: Q2

Food product Total amount (R million)

Fowls, cuts & offal, fro 889

Rice, semi-milled or wholly milled 868

Palm oil or fractions simply refined 788

Soya-bean oil-cake and other solid residues 775

Refined soya-bean oil, not chemically modified 461

Food preparations nes 450

Sunflower-seed or safflower oil, crude 428

Fowls, domestic, not cut 213

Animal feed preparations nes 189

Sardine, brisling, sprat prepared/preserved, not minced 153

Tea, black (fermented or partly) in packages > 3 kg 147

Dog or cat food (retail) 138

Swine cuts, frozen nes 137

Soya-bean oil crude, whether or not degummed 128

Malt, not roasted 114

Malt, roasted 114

Frozen shrimp and prawn 109

Tuna, skipjack, bonito, prepared/preserved, not minced 106

SOUTH AFRICA’S MAIN EXPORTED BEVERAGES IN 2014: Q2

Beverages Total amount (R million)

Grape wines nes, fortified wine or must, pack < 2l 1266

Grape wines, alcoholic grape must nes 670

Undenatured ethyl alcohol > 80% by volume 263

Liqueurs and cordials 188

Beverages waters, sweetened or flavoured 170

Beer made from malt 114

Fermented beverages nes (e.g. cider, perry, mead, etc) 107

Grape wines, sparkling 70

Orange juice, not fermented, spirited, or frozen 54

Ethyl alcohol and other spirits, denatured 49

Non-alcoholic beverages nes, except fruit juices 43

THE SHARE OF CONTINENTS AS A SOURCE OF BEVERAGES

EXPORT IN 2014: Q2

Africa 25%

Americas 12%

Asia 13%

Europe 49%

Oceania 1%

SOUTH AFRICA’S MAIN IMPORTED BEVERAGES IN 2014: Q2

Beverages Total amount (R

million)

Whiskies 562

Beverages waters, sweetened or flavoured 126

Spirits obtained by distilling grape wine, grape marc 112

Grape wines, sparkling 40

Liqueurs and cordials 39

Non-alcoholic beverages nes, except fruit, vegetable

juices 36

Undenatured ethyl alcohol > 80% by volume 36

Alcohol liqueurs nes 29

Grape wines nes, fortified wine or must, pack <2l 25

THE SHARE OF CONTINENTS AS A SOURCE OF BEVERAGES

IMPORT IN 2014: Q2

Americas 10% Asia

4%

Europe 78%

Oceania 8%

SOUTH AFRICA’S EXPORT OF AGRO-PROCESSING PRODUCTS

TO JAPAN (R million)

2003 2013

Agriculture, forestry and fisheries primary products

476 2701

Processed food products 685 833

Beverages 33 146

SOUTH AFRICA’S MAIN EXPORT OF AGRICULTURE AND

PROCESSING PRODUCTS TO JAPAN (R million)

Products 2013

Maize except seed corn 2072

Grapefruit, fresh or dried 282

Grape wines nes, fortified wine or must, pack < 2l 105

Peaches, otherwise prepared or preserved 94

Flour or meal, pellet, fish, etc, for animal feed 69

Other, incl. mixtures other than those of subheading 2008.19: mixtures 54

Macadamia Shelled 49

Fruit juices (including grape must) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter - apple juice 48

Rock lobster and other sea crawfish, frozen 46

Rock lobster and other sea crawfish, frozen 46

Rock lobster and other sea crawfish not frozen 43

Peanuts shelled, whether or not broken 40

Pears, otherwise prepared or preserved 38

Fruit juices (including grape must) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter - grapefruit juice 23

Cut flowers and flower buds for bouquets, dried, etc. 22

Oranges, fresh or dried 21

SOUTH AFRICA’S IMPORT OF AGRICULTURE AND PROCESSED

PRODUCTS FROM JAPAN (R million)

2003 2013

Agriculture, forestry and fisheries primary products

8 6

Processed food products 18 30

Beverages 0 2

Consumption vs imports

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Share of food expenditure (%)

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2010 2024

WHY should you invest in South Africa?

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Value proposition

Why you should invest and do business with South Africa

One of the most sophisticated, diverse and promising emerging

markets globally;

The country is a member of BRICS;

Strategically positioned on African continent with a market of 1 billion

people and GDP growth rate of >5% over couple of years;

Political and macro economic stability – AFRICAN powerhouse;

Infrastructure, democratic institutions, financial and legal system, ICT

innovation and competitive business system

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Opportunity for investment and growth

Demand for agro-processing products is buoyed by:

− population growth,

− growing middle class,

− increased awareness to food safety issues,

− taste, preference and convenience, and

− climate change and promotion of the green economy.

South Africa is also a gateway to AFRICA

Conclusion Demand for processed food and beverages is increasing in South Africa

and Africa.

Local production is not enough to satisfy the growing demand; hence,

import is growing.

South Africa is a proffered destination for investment as it is a gateway to

Africa, having a world-class infrastructure and stable political climate.

Investing on value addition and improving competitiveness would bring

high returns on investment.

Hence, focusing on new technologies, new product development and

import replacement are some of the avenues to exploit opportunities in

agro-processing in South Africa.

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Ours is a beautiful country

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Ours is a beautiful country

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Thank you

www.daff.gov.za

Click: Branches then Economic Development, Trade

and Marketing. Lastly Agro-processing Support

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