South Africa Trade Global Companies That Are Essay

Excerpt from Essay :

South Africa


Global companies that are sited in South Africa exult about the county's numerous commercial advantages including an idyll bases for exporting products internationally, low labor costs, and excellent infrastructure.

According to Jim Myers, president of the American Chamber of Commerce in South Africa, almost 50% of its members are representatives of Fortune 500 companies and over 90% of these companies have pointers in southern Africa, sub-Saharan Africa, and all across the continent:

The sophisticated business environment of South Africa provides a powerful strategic export and manufacturing platform for achieving global competitive advantage, cost reductions and new market access (Global companies in South Africa.)

Some of the global companies in alphabetical order located in South Africa are the following:

Acer Africa -- occupied with peripherals and printers since 1980.

Agrid South Africa - manufacturers of diesel/petrol engines and agricultural implements for small farmers

Barclays Bank -- world famous. One of South Africa major 4 banks.

BMW South Africa -- car production line.

EDS South Africa: a leading IT firm

Volkswagen South Africa -- a subsidiary of the renowned Volkswagen company and renowned for its affordability.

These are just some of the numerous global companies that have either originated from South Africa, or that have chosen South Africa as their base of operations. Why they have done so is pithily explained by Hertz International -- whose recommendation of South Africa deserves to be quoted as indication of the nation's financial advantages:

South Africa enjoys a sophisticated financial market that can facilitate the rapid expansion of a capital intensive industry like car rental. The market in South Africa presents Hertz with an excellent business opportunity as the country continues to become more closely integrated into the global community. (Hertz International vice-president Charles Shafer )

Levi Strauss too attributed their selection of South Africa as country of origin praising South Africa for its dynamic and stimulating environment: "To operate in an environment as sophisticated and as dynamic as this has helped Levi Strauss achieve a return on investment two years ahead of projections." (Levi Strauss (SA)). What higher credential than this can a country seek?

Singapore Airline on the other hand was attracted to South Africa due to "its natural environment, its diversity, the richness of its peoples and landscape


Apparently, there are various aspects that draw people to the country and inspire them to launch it as their base for international trade.

South African's natural sectors include natural mining particularly diamond, gold, precious, metals, and coal; agriculture (with agricultural exports totaling 8% of the national exports); manufacturing (with the automotive industry especially constituting approximately 10% of the country's exportation; and telecommunications (with South Africa reputed to have the 4th most advance telecommunications system worldwide).

Key exports of South Africa include corn, diamonds, fruits, gold, metals and minerals, sugar, and wool. Other important exports include transportation and machinary as well as petroleum, manufactured goods, and chemicals. Helpful to encouraging investors is the fact that the Overseas Private Investment Corporation (OPIC) was recently established to assist U.S. investors in the South African market with services such as loans and poltical risk guarantees.

As indicator of its international spot in trade, South Africa has actually achieved top rankings out of 142 surveyed countries for regulation of exchanges and it has achieved second place for the stability of banks in the World Economic Forum's (WEF's) latest Global Competitiveness Index,

It is also the 50th country out pf 1242 surveyed countries on that index assessing pitch and level of competitiveness amongst various international countries with 14000 countries responding as per the year 2011.

A drop in past years was made up during the 2010-2011-year by South Africa climbing to 50th position due to technological readiness, strength in investor protection, and the solidity of its private institutions.

The World Economic Forum's (WEF's) latest Global Competitiveness Index ranked the country as:

1st for regulation of securities exchange.

1st for strength of auditing and reporting standards.

2nd for soundness of banks.

2nd for efficacy of corporate boards.

3rd for protection of minority shareholders' interests.

3rd for availability of financial services.

4th for financing through the local equities market.

7th for effectiveness of anti-monopoly policy.

8th for legal rights. (Economy)

Among the nations in its region and scored according to competitive advantage, South Africa is ranked second to China and ahead of Brazil, India, and Russia. In short, this makes South Africa a highly attractive country for international trading and gives it a prospective future. Attractive to prospective foreign investors is the fact that South Africa's Department of Trade and Industry South Africa has generated new incentives in order to attract foreign companies to its shores and to stimulate outsourcing and off shoring. Attractive to local companies is the fact that South Africa has approved grants worth R157.76-million to be granted to 10 projects over the coming three years. The prospects of the opening of 11000 jobs making these companies more competitive.


South Africa, Botswana, Lesotho, Namibia and Swaziland have signed the Southern African Customs Union (SACU) agreement which means that they have the same legislation on customs duties and the same rate of duties on locally produced and imported goods.

South Africa has also exchanged customs agreements with other countries, which includes the fact that they exchange surveillance, technical information, assistance, investigators, and reviews by other officials.

South Africa has ratified agreements with France, Netherlands, the United Kingdom and the United States as well as with Algeria, Czeckeslovakia, Mozambique and Zambia. Agreements have also been negotiated with Angola, Iran, Malawi, Norway, Turkey and Zimbabwe, and there are free trade agreements with the European Commission and with the SADC Protocol on Trade (South African revenue service).

Other information consists of the facts that South African imported tariffs generally range from 0-45%. Surcharges in import goods and tariffs are worked out according to the customs value. South Africa itself uses the Harmonized Tariff System.

Surcharge rates are the following:

0%- for essential foods, agricultural products, manufacturing inputs, and intermediate and capital goods.

15% for vehicles, computer equipment and appliances, aircraft, earthmoving equipment etc.

40% for luxury consumer goods such as jewelry, perfumes, luxury clothes, antiques, televisions, tape recorders, VCRs etc.

Some goods such as consumer goods, wood paper, motor or aviation fuel as well as refined petroleum and used equipment require special import permits.

Certain products, generally those made of metal, steel, copper or some similar element require the South African Declaration (or certificate) of Origin, Form DA-59, to be imported. No other certification is needed, but in all cases all shipments to South Africa require the following documents:

1) A commercial invoice which shows the price charged to the importer in addition to the cost of placing goods on board ship for export;

2) Bill of Lading;

3) insurance documents; and

4) Packing list. (Import Export procedures. South Africa.


South Africa is known as the 'rainbow nation' for its multifaceted nations and range of languages, customs, and different people. Renowned or notorious for its turbulent history, South Africa is best known for its saga with apartheid but has recently surmounted that although the consequences and ripples are still felt with its aftereffects of national unrest. The government has been attempting to end racial discrimination but this still remains a huge problem.

Advising businesses how to interact with South Africa, or trying to formulate a South African culture remains difficult since the different races still remain apart and disintegrated with the dream of a unified 'rainbow nation' not actualized. Representatives of the nation include white Afrikaner, black African, Indian, Cape-Malay and other communities. Moreover, there are also marked differences between urban and rural settlers with those in cities seen as more materialistic and strained but more open-minded (as urban dwellers anywhere generally are) and those in the rural areas as more relaxed, outgoing and conservative,

There are approximately 11 languages spoken in the country and this includes Afrikaans, English, Ndebele, Pedi, Shangaan, Sotho, Tsona, Tswana, Venda, Xhosa and Zulu. Foreign businesses need not be concerned since it is English that is the language of trade.

South Africans are direct in their communication, and, as is often the case with almost all people anywhere, initial relationships are more tactful and restrained but progress to more honest and forthright communication as the relationship develops.

Since South Africa is a country that is entrenched in history, businesses are advised to provide counterparts in South Africa with details of their private and company's history.

South Africans, like most European countries, like their space. Individuals, too, do not generally like being touched.

Topics of conversation include food and sports, of the latter categories, sports such as rugby, football, and cricket are especially liked. Other topics are wines and international travel. Taboo topics are generally race issues, comparison of cities (since South Africans are proud of their particular city), and local politics.

Prime vacation time is from mid-December to mid-January and two weeks around Easter time therefore it is…

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