UK investors ‘still believe in South Africa’

12 October 2012

British companies based in South Africa have not been shaken by the ongoing strikes and the recent Marikana tragedy because they believe the country is a good place to invest in the long term, says UK Secretary of Business, Innovation and Skills Vince Cable.

British companies make up over half the foreign direct investment (FDI) in South Africa.

Cable was briefing the media in Parliament in Cape Town on Thursday following a meeting with Trade and Industry Minister Rob Davies.

Cable said British companies based in South Africa were “not fazed” by mining sector strikes, but rather considered the long-term perspective when they considered whether or not to remain in a country.

SA fundamentals ‘attractive to investors’

He said South Africa had a lot of “fundamentals that are attractive to investors”.

“I think the assessment of serious investors here is that South Africa is an open economy and approaches foreign investment in a positive and welcoming way,” Cable told MPs. “The regime is a good one.”

Cable was accompanied by a delegation of UK small and medium-sized firms and had visited UK company Bombardier, which supplied the Gautrain, while in the country.

He said he believed there might be some developments for UK investments in the area of skills and apprentice training.

Although value on inward investment had slowed, the number of projects had risen, and Cable said there had been rapid growth in trade between South Africa and the UK in recent months.

Although trade has been more or less balanced, South African exports to the UK have recently declined, but Cable said the aim was to achieve balanced trade between the two countries.

UK firms ‘considering a number of SA projects’

Minister Davies, also briefing reporters, said UK companies were considering a number of projects in South Africa, including a number in business process outsourcing (BPO), which could potentially create as many as 4 000 jobs, as well as investments in the hospitality sector and a plastics manufacturing project.

He said the 2015 target of doubling trade between SA and the UK looked unlikely to be met before 2016 and 2017, adding that his department would soon promote a list of value-added products to the UK.

Commenting about the bulk wine issue, Davies said there were no environmental regulations in the World Trade Organisation (WTO) that made it mandatory for countries to ensure that carbon emissions were kept at the lowest possible level when goods were shipped between two countries.

He said flying or shipping goods from one part of the earth to another did not necessary mean that the product necessarily had a higher carbon footprint than those manufactured locally.

At times more emissions were emitted in manufacturing a product locally or when consumers had to drive many long distances to buy the product from retailers, he said.

The bulk wine issue has cost South Africa about a 1 000 jobs in its bottling sector, because wine destined for the UK is now placed in plastic containers rather than bottles.

Source: SANews.gov.za