SA, Russia to push investment

19 July 2005

South Africa and Russia are to push for increased business cooperation and investment by companies in the two countries, Foreign Minister Nkosazana Dlamini-Zuma said after meeting with Russian Minister of Natural Resources Yuri Petrovich Trutnev in Pretoria on Friday.

Trutnev was in SA for talks with Dlamini-Zuma and Minerals and Energy Minister Lindiwe Hendricks ahead of the fifth SA-Russia Intergovernmental Trade and Economic Committee (ITEC) meeting, to be held in Moscow in October.

Trutnev said after the meeting that SA and Russia are expected to sign an agreement on the peaceful use of atomic energy in October – and that further agreements were in the pipeline in the fields of minerals and energy, health, agriculture, science and technology, and education.

Dlamini-Zuma said there had been “a lot of progress” on business cooperation between the two countries.

“Russian business people have invested in South Africa, which we are pleased to see, and we hope to attract more of them,” she said, adding that the two countries would now work on getting more South African businesses to invest in Russia.

The two ministers co-chair the ITEC, which is regarded as the most important mechanism regulating political, trade and economic relations between SA and Russia. The fourth session of the ITEC took place in Pretoria in November 2004.

SA and Russia already enjoy healthy trade relations. In 2003, the Russian Federation included South Africa in a list of developing countries that enjoy preferential tariffs and duties on exports to Russia.

The value of SA’s exports to Russia increased from around R200-million in 2000 to nearly R600-million in 2004, while imports from Russia stood at R241-million in 2004.

According to the Department of Foreign Affairs, the bulk of SA’s exports to Russia are made up of vehicle engines (18.8% of exports), machines and mechanical appliances (14%), grapes (13.8%), flat-rolled products or iron (10%), pears (6.8%), and peaches (3.4%).

Over 65% of SA’s imports from Russia are made up of unwrought nickel.

Other potential markets in Russia include automotive parts and aftermarket parts, oil and gas equipment, agricultural equipment and wines.

SA firms Anglo American, Standard Bank, De Beers, JCI, Gencor and EL Bateman have substantial interests in Russia. SABMiller has invested US$100-million (over R600-million) in setting up a brewery in the Russian region of Kaluga, and their product – Golden Barrel Beer – is highly successful in the local market.

And in 2004, Russian company Norilsk Nickel – the world’s largest producer of the nickel and palladium group of metals – bought a 20% equity stake in SA gold producer Gold Fields for US$1.16-billion, in one of the largest single foreign investments by a Russian company.

Russia honours Dlamini-Zuma
Last Monday, Dlamini-Zuma became only the second person – after Russian President Vladimir Putin – to receive the Russian Federation’s highest honour, the Peter the Great Order, First Class.

The award, presented in Moscow, was made for “outstanding achievements in [Dlamini-Zuma’s] endeavours to strengthen security, peace and friendship between Russia and South Africa”.

Dlamini-Zuma met Russian Foreign Minister Sergei Lavrov during her visit, which aimed to consolidate Africa’s agenda by promoting North-South cooperation through interaction with G8 countries.

Dlamini-Zuma also met French Foreign Minister Philippe Douste-Blazy during her European trip before returning to SA for her meeting with Trutnev on Friday.

SouthAfrica.info reporter and BuaNews