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COUNTRY RISK MANAGEMENT.SOUTHAFRICA.za
SOUTH AFRICA
Presented By : RESHMA DHULAP.
RUPALI HOWAL.Guided By: Prof : S.B.Choughule.
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JSW IN SOUTH AFRICA.
JSW Energy Ltd, a unit of Indias third largest steelmaker,
has acquired a part of a company that owns shares in South
African Coal Mining Holdings Ltd.
JSW Energy acquired a 49.8% stake in Royal Bafokeng
Capital (Proprietary) Ltd from Strider Holdings
(Proprietary) Ltd and has the option of buying the
remaining 50.2% from Royal Bafokeng VenturesProprietary Ltd.
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INTRODUCTION OF JSW.
Established in 1982.
O.P. Jindal is the founder of Jindal Group.
JSW Steel Ltd. is one among the largest Indian Steel
Companies in India today with capacity of 7.8MT.
Jindal Steel is amongst the largest corporate groups in
India. Jindal Group is presently a US $5 billion
conglomerate and ranks fourth amongst the top Indian
Business Houses in terms of assets.
Jindal Steel is one of the largest steel producers in India
with 12 plants in India and 2 in USA.
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INVESTMENT AND TRADE WITH SA.INVESTMENT AND TRADE WITH SA. FDI : Indian companies currently executing project worth over US $ 2FDI : Indian companies currently executing project worth over US $ 2
billion in SA.billion in SA.
Bilateral Trade :Bilateral Trade :
Source: Department of Commerce, Govt. of India.
A challenge to boost bilateral trade to US $ 10 billion by 2012.
Figures in Million. US $. 2008-2009 (estimates)
India's Exports 1,980.28
India's Imports 5,513.58
Total Trade 7,493.87
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SOUTH AFRICA : A DESTINATION FOR
INVESTMENT.KEY FACTS
South Africa is located at the southernmost
region of Africa.
Area: 12,19, 090 square kilometres.
Currency : One Rand (R) = 6.445 Indian Rs.
or 1 Rupee. = 0.16 ZAR
Largest city: Johannesburg
Coastline : 2,954 KM (India 7016 KM).
CAPITALS :
Pretoria (administrative)
Cape Town (legislative)
Bloemfontein (judicial)
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SOUTH AFRICA : COUNTRY PROFILE .
Population (2009): 50.1 million
Major Religion : Christianity- 79.7%, Islam- 1.5%, Hindu- 1.3%.
Languages : 11 official languages including English, Afrikaans,
Sesotho, Setswana, Xhosa and Zulu.
Literacy : Rank 107, 88% (India-149,66%) (United NationsDevelopment Programme Report 2009)
Life expectancy: 50 years (men), 53 years (women).
Internet domain: .za
International dialling code: +27
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POLITICAL GROUNDy Though regional stability is low, South Africa is a stronghold of
political and societal progress.y There has been a political shift in South Africa due to the forced
exit of the former president in the wake of a corruption scandal.
y Aggressive fiscal spending is combating economic conditions,
and the South African central bank has cut interest rates
aggressively.
South African President MR. Jacob Zuma.
Invited the Indian industry
to invest in South Africa.
Mr Zumas said in Mumbai that
South Africa is open for business
and he encouraged new investment
from India.
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ECONOMIC GROUND
y Real GDP growth rate (2009): -1.9% ; 2010 :2.6% (Forecast).
y GDP (purchasing power parity): $488.6 billion (2009 est.).
y GDP - composition by sector :
Agriculture: 7 % .
Industry: 32.1%.
Services: 64.4% (2009 est.).
y GDP (official exchange rate): $277.4 billion (2009 est.).
y Prime overdraft lending rate of banks (April 2010): 10% .
y GDP - per capita (PPP): $10,000 (2009 est.).
y Consumer inflation rate (March 2010): 5.1% y/y .
y Producer inflation rate (March 2010): 3.7% y/y .
y Unemployment (fourth quarter 2009): 24.3% .
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on .
South Africa has a largely industrialized economy with a largservices sector.
Gross domestic product (GDP) per capita is high relative to othe
African nations (USD 5693) but there is a great deal of incom
disparity as half the country lives in poverty. Inflation was high in 2008 at 11.5% but
Price increases slowed considerably with the
global economic slowdown.
One of continent's biggest economies. Poverty widespread, hig
crime rate associated with high unemployment. Economy move
into recession in May 2009.
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FOREIGN TRADE
Export commodities : gold, diamonds, platinum, other metals and
minerals, machinery and equipment.
Exports - major partners : US 11.9%, Japan 11.1%, Germany 8%, UK
7.7%, China 6.6%, Netherlands 4.5% (2009).
Total exports :$67.93 billion in 2009.
Import commodities : machinery and equipment, chemicals,
petroleum products, scientific instruments, foodstuffs.
Imports - major partners : Germany 10.9%, China 10%, Spain 8.2%,
US 7.2%, Japan 6.1%, UK 4.5%, Saudi Arabia 4.2% (2009).
Total Imports : $70.24 billion in 2009.
Global competitiveness ranking :45 (2009/2010).
Economic freedom index :63.8 (2009).
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SOCIAL CONDITION.
Doing business in South Africa is made more difficult by its
segregated and unequal society and economy.
Both the high crime rate in South Africa and the AIDS epidemic pose
serious societal problems and have interfered with prospects for
growth and investment. The predominantly poor, black majority population lives in poverty in
the midst of great wealth.
As a result, businesses cite the lack of a trained workforce and
prevalence of violent crime as significant obstacles to doing business.These factors raise costs and increase the difficulty of conducting
business ethically.
Coal mines have a railway load and barge facility which reduces the
cost of production and transportation of the coking coal.
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TECHNICAL GROUND.
South Africas scientists and infrastructure are world-class and thecountry is rapidly positioning itself among the global leaders in
innovation, science and technology (S&T). National Biotechnology strategy(NBS) , which was launched in 2001,
sets the agenda for the development of South Africas biotechnologyindustry.
South Africa continues to promote high-technology investment in
space science to ensure that local researchers and students are able toparticipate in international astronomy.
Advanced Manufacturing Technology Strategy(AMTS) guides effortsin the manufacturing sector, including the aerospace industry.
National Nanotechnology Strategy recognises the needs of local
industry and focuses on the essential building blocks of nanoscience,namely synthesis, characterisation and fabrication.
South Africa devotes 10.5% of its R&D expenditure to Informationand Communication Technology (ICT).South African researchershave the advantage of using massive computing power in their questfor new knowledge and applications.
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INTERNATIONAL RANKINGS
Ranked-54(INDIA-51) out of 139 countries in the Global
Competitiveness Report 2010. It is the highest-ranked Sub-
Saharan country.
Ranked -34(IND
IA-133) out of 183 countries and 2 of 46Sub-Saharan countries in the World Banks Doing Business
Report 2010 Report.
Ranked 5 out of 48 countries in Ibrahim Index of African
Governance. Scored 12/16 for Rule of Law in Freedom in the World
2008.
South Africa was ranked-55(INDIA-84) out of 180
countries in Corruption Perceptions Index 2009.
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SOUTH AFRICA A GATEWAY TO THE
AFRICAN CONTINENT.
South Africa is the economic powerhouse of the African continent,
with a GDP of $ 277 bn, accounting for 30 % of entire GDP of Africa.
The country leads the continent in industrial output, mineral
production and generates 50% electricity consumed in Africa.
US, Japan and China are the major destinations for South Africas
exports and together account for close to 30% of its total overseas
shipments.
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ANALYSIS
Political Risk : Low.
Economics Risk : Moderate.
Socio-Cultural Risk : Moderate.
Technological Risk : Low.
Logistics Risk : Low.
Scale: Low, Moderate, High, Very High.
Since there is no high risk is anyarea. Country is good for
investment.
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