The Design and Implementation of the Export Strategy · 2015. 1. 30. · the dti, including priorities with export promotion and development ... –Import parity pricing in critical

Tuesday, November 20, 2007 National Export Strategy 1

The Design and Implementation of the

Export Strategy 19 October 2007

by

Division: TISABusiness Unit:: Export Development and Promotion

Project Champion: Iqbal Sharma, DDG Project Manager: Riaan le Roux, Chief Director


Content

• Purpose of presentation• Introduction• Perspective on Foreign Trade• Best practice• Strategic Direction of the Export Strategy• Structure of the Export Strategy• Consultative process on the Export Strategy• Export Strategy value chain• Strategic themes 1-7• Performance evaluation and measurement• Export Development and Promotion Value Chain


Purpose of the Presentation

To present the process followed to design and implement the Strategy


Policy Context

National Industrial Policy Framework (NIPF)

13 Key Action Programmes

Lead Sectors•Capital/Transport equipment and Metals•Automotives and Components•Chemicals, Plastic fabrication and Pharmaceuticals•Forestry, Pulp and paper, and Furniture

Policy Coherency

Trade Policy Export Strategy

Investment Strategy

Export Promotion

Export Development

Market Prioritisation


Key Observations

• The NIPF is the foundation of all policies and strategies administered by the dti

• Nations that do not have policies that drive international competitiveness will not survive in the global trading arena

• South Africa has strong trade policy initiatives that must be applied to gain better market access for South African products and services

• Successful emerging economies have also linked up their export and investment strategies to ensure their continued growth

• The world as we know it will change dramatically over the next decades

• It is therefore imperative that South Africa starts a process now to understand where it should focus its efforts in the global economic environment over the next decade


A future view of the world

World Population 2000 years ago

www.worldmapper.org, 2006

http://www.worldmapper.org/



World Population 1900















Wealth 1990





Wealth 2050




South Africa’s Global Trade

12,78

39,02

24,79

4,49

1,39

14,82

2,70

Source: The dtiDecision Support Model

Sustain and Maintain

Growth

High Growth

High Growth

Sustain and Maintain

Australia is almost 100% more than whole South American continent

High GrowthSustain and

Maintain


Perspectives on Foreign trade

Trade from Jan '05 to June '07

-20,000

0

20,000

40,000

60,000

80,000

100,000

Jan-0

5Fe

b-05

Mar-05

Apr-05

May-05

Jun-0

5Ju

l-05

Aug-0

5Sep

-05

Oct-05

Nov-0

5Dec

-05

Jan-0

6Fe

b-06

Mar-06

Apr-06

May-06

Jun-0

6Ju

l-06

Aug-0

6Sep

-06

Oct-06

Nov-0

6Dec

-06

Jan-0

7Fe

b-07

Mar-07

Apr-07

May-07

Jun-0

7R

and

(Mill

ions

)

EXPORTS IMPORTS TRADE TURNOVER TRADE BALANCE Source: the dti statistical portal



Change in Exports and Imports

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

Jun-

06Ju

l-06

Aug-

06Se

p-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07Fe

b-07

Mar

-07

Apr-0

7M

ay-0

7Ju

n-07

Perc

enta

ge c

hang

e (%

)

Exports Imports Poly. (Exports) Poly. (Imports)Source: the dti statistical portal



Structure of South African Exports

0.0

50.0

100.0

150.0

200.0

250.0

300.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Ran

d (B

illio

ns)

Manufacturing Agriculture MiningTechnology Capital Goods Motor Vehicles

Source: the dti statistical portal



Structure of South African Imports

0.0

100.0

200.0

300.0

400.0

500.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Ran

d (B

illio

ns)

Manufacturing Agriculture MiningTechnology Capital Goods Motor VehiclesSource: the dti statistical portal



Top 20 Export Destinations 2006

1814

9.3 9 8.1 7.9 7.4

4.75.56.26.76.81010.1

11.6

26.831.7

41.3 41.1

JAP

AN

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ITED

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SPA

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AU

STR

ALIA

FR

ANC

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BIA

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BABW

E

KO

REA

REP

SOU

TH

TAI

WAN

MO

ZAM

BIQ

UE

IND

IA

AN

GO

LA

Expo

rts

(Bill

ions

)




Top 20 Import Origins 2006

57.8

30.2

2318.3

11.8 10.9 9.5 9.3 9.2 7.9 7.7 7.5 7.113.9

16.9

24.5

35.1

46.7

GER

MAN

Y

CH

INA

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ITED

STA

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JAP

AN

SAU

DI A

RAB

IA

UN

ITED

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IRAN

FR

ANC

E

ITAL

Y

KO

REA

REP

SOU

TH IND

IA

AU

STR

ALIA

BR

AZIL

NIG

ERIA

TH

AILA

ND

TAI

WAN

NET

HER

LAN

DS

SIN

GAP

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E

Impo

rts (b

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ns)



IntroductionChanging Composition of Exports

Rank Top 20 Export products % share 20051 Precious metals 25.02 Iron & steel 11.93 Mineral fuels 9.94 Vehicles other than railway 8.45 Machinery 6.76 Ores, slag and ash 4.67 Aluminium 3.48 Edible fruit 2.59 Inorganic chemicals 2.410 Electrical, electronic equipment 1.811 Organic chemicals 1.612 Beverages 1.613 Articles of iron or steel 1.414 Furniture 1.215 Plastics 1.216 Wood and articles of wood 1.117 Paper & paperboard 1.018 Misc. chemical products 1.019 Pulp of wood 0.820 Fish 0.8

All other products 11.9

Rank Top 20 Export products % share 19901 Precious metals 48.22 Iron and steel 9.03 Mineral fuels 6.14 Ores, slag and ash 4.75 Copper and articles thereof 1.96 Edible fruit 1.77 Wool 1.68 Machinery 1.59 Sugars and sugar confectionery 1.410 Articles of iron or steel 1.411 Inorganic chemicals 1.312 Nickel and articles thereof 1.313 Salt, sulphur 1.314 Pulp of wood 1.215 Cereals 1.216 Vehicles other than railway 1.117 Aluminium and articles thereof 0.918 Paper & paperboard, articles of pulp, paper and board 0.919 Vegetables 0.820 Leather 0.6

All other products 10.9

63,3 46,8



Key Observations

• Strategy should focus on what the dti could realistically influence• Preconditions to export growth are:

– Enhanced competitiveness through Industrial Policy and Sector Development Strategies

• Focus on key high growth markets rather than doing everything for everybody• Enhance market access in these markets• Ensure that the Export Community has access to world class information and

data• Grow the exporters base (Particularly SME’s and black exporters)• Align the Export Community, the dti and Foreign offices in an effective value

chain of actions• Ensure that the Export Community has access to finance to market

themselves more effectively abroad


The Design of the NESBest Practice Element

Linking the Export Strategy to Wider National Goals and Policies

Securing Prominent Endorsement and Commitment

Conceiving a Vision

Creating and Promoting a Slogan

Establishing a Partnership between the Public and Private Sectors

Formalising the Partnership

Confirming Resources

Prioritising Industries and Product Sectors

Collating and Disseminating Information

Putting a Review Process in Place

SA Responsethe 5 dti objectives, Asgi-SA, IndustrialPolicy, Investment Strategy

Minister of Trade and Industry

To ensure consistent export growth in targetedhigh potential markets

“From local to global”

Export Councils, Provincial Agencies, Chambers

Performance agreements with Export Councils

Dedicated well resourced Export Developmentand Promotion Unit

Lead sectors as defined by NIPF

National Trade Information System

Performance Management System

10Essential

Elements


It is envisaged that by 2014, that South Africa, from a globally competitive base directed by best practice industrial policy andsector development strategies, will be able to maintain market share in traditional markets and substantially increase its market share in prioritised, new high growth markets through aggressive marketing and a larger exporter community that includes black exporters from marginalised and depressed areas in South Africa

Strategic Vision


Strategic Direction of the Export Strategy

• Align the relevant divisions of the dti around the key objectives and strategic interventions of this strategy

• Ensure policy coherence within the dti and between the dti and the rest of government, especially those departments represented in the economic cluster

• Build consensus amongst external stakeholders• Build export awareness and create an export culture • Provide clients with a clear understanding of the strategic interventions of

the dti, including priorities with export promotion and development• Provide clients with a clear understanding of the service offerings available

to exporters and prospective exporters• To increase exports in targeted priority markets and the number of

exporters, with specific focus on SME and BEE enterprises• Improve export participation in geographically marginalised and

economically depressed areas within South Africa


The Structure of each Chapter

• Strategic theme• Problem statement• Background• Overarching challenge• Key action initiative(s) to address challenge• Summary of key action initiatives indicating lead division in

the dti and 3 year time line• Conclusion


Export Strategy Value Chain

Competitiveness

Export Development

Export Promotion

Market Penetration

Performance Measurement, Management and Review

Key Processes Strategic Themes

Industrial Policy

Country Prioritisation

Market access

National Trade Information

System

Exporter Development Programme

Export Mechanisms

Financial instruments

GLOBAL ECONOMIC ENVIRONMENT


Strategic Theme 1: Competitiveness

Performance Management

Competitiveness Export PromotionExport DevelopmentMarket Penetration

• The Export Strategy starts with the foundation created by EIDD in the design of the National Industrial Policy and progresses through a range of additional measures to increase SA’s export performance.

• The need to address critical pricing structures and efficiencies, particularly:–Selected services subject to administered prices–Import parity pricing in critical upstream sectors

• The development and deepening of industrial capabilities, particularly in World Class Manufacturing and Technological deepening and transfer

• Implementation of Sector Development Strategies and Programmes

Outcome: Enhancing industry competitiveness to compete in global markets


Strategic Theme 2: Determining Priority markets



The lack of a scientific decision support model on prioritising markets and products resulted in a shotgun approach to export markets• Econometric modeling by University of Pretoria and North West

University, managed by ERPC in the dti• Real time intelligence from Export Councils and Foreign Offices to

support the model• Single integrated country product matrix indicating priority countries with

high penetration potential

Outcomes:•Determining high potential, high yield markets on a scientific basis•Clear indications on where to situate Foreign Offices to gain maximum impact•Optimal usage of the EMIA-fund to target pre-determined foreign markets with instruments like National Pavilions and Missions


Country Product Matrix Value Chain

Phase 1

Results from DSM

Phase 5

Feedback from Industry Phase 6

Feedback from Foreign

Offices

Phase 2

Statistical Analysis on

current exports

Phase 3

Eliminate products subject to

known access barriers

Phase 4

Draft Country Matrix

Phase 7

Final Country Product matrix

Phase 8

Joint Export Promotion

plan between Industry and

the dti

Phase 9

Evaluation and feedback

to DSM

30 November 2007

1 April 2008


Africa


Europe


Asia


Australasia


Russia


Middle East


Americas


Strategic Theme 3: Market Access



• The dti’s market access programmes have created and are still creating preferential market access for South African goods and services in key markets of over 3 billion people around the world.

• Key countries and regions are– Expanded EU– EFTA– India – China– MERCOSUR – USA – Africa in line with NEPAD framework (SACU / SADC)

Outcome: Increased access for SA products in priority markets


Strategic Theme 4: National Trade Information System

• Lack of a national integrated strategy for export information delivery led to the proliferation of export development entities and export information services.

• Roles and responsibilities need to be formalised to ensure effective and coordinated development and management of export information services.

• The dti to lead by:– Extending its export information service nationally through a portal– Facilitating collaboration on and consolidation of information with

other entities– Developing strategy for the standardisation and organisation of

export information delivery across the various entitiesOutcome: A web based system to deliver quality information that

enables the export community to make informed decisions




What is trade information?

Trade information consists of all information that is required to prepare and conclude successful international trade transactions.


Categories of Trade Information

Company information/Trade contacts

Buyers/ImportersInt’l Trade Support Institutions

Market Information Business OpportunitiesMarket Studies

Market Access Information

RegulationsTariff & Non-Tariff Barriers

Country Information Country Profiles, Trade StatisticsGuides to doing business

Trade Policy Trade AgreementsWTO

Process Information on the export process Service Providers

Export Sector Incentives, Export Regulations, Local Trade Support Institutions


Main Challenges

1. Institutions: Coping with the uneven development of information services in South Africa.

2. Sources: Abundance or scarcity?

3. Cooperation: Developing information exchange at national, regional and international levels.

4. Technology : Moving from physical to virtual information bases.


Addressing the Challenges

Bridginginformation gaps

Publications

Enquiry Service

Exporter Directory

Export Portal

Building up the capacity

Training

National network


Content

WebLink

Database

Preparingto Export

Registeras an Exporter

Export ReadinessAssessment

Frequently AskedQuestions

Export Answer Book

SA's Import & ExportRegulations

ResearchYour Market

Start with MarketResearch

Trade Statistics

Download Plaza

Useful Websites

CIA World Fact Book

CBI focus on Europe

ITC Trade InfoReference Centre

DevelopContacts

Promoteyour company

EMIA

ConductTransactions

Export Finance/Insurance

Documentation

ServiceProvider Dbase

ExporterDbase

StatisticsPortal

ResearchDbase

After Sales ServiceTips

How is the ExportVenture Financed?

Industrial DevelopmentCorporation

Credit Gaurantee(CGIC)

Export Credit Insurance(ECIC)

Calculating the cost ofthe export product for exporting

Export Answer BookNational Empowerment

Fund (NEF)the dti

Foreign Offices

Pavilions/Missions/Seminars

Events Dbase

Internet Sourcesfor Leads

Doing Businesswith the UN

JETRO

CBI

TFOC

GTN

NORAD

TradeOpportunities Centre

How to enterthe Export Market

Methods of PaymentPreparing a Proforma

InvoiceSample

Agency AgreementSample

Distributor Agreement

CBI - Trade ShowGuide

CBI - Image Builder

CBI Export Planner

Use of INCOTERMS

Who else can help you

the dtiTrade Info Services

SampleExport Market Plan

South Africa's TradeAgreements

What is the WTO?

1. Enhance online communication channel to proactively deliver a constant flow of information

2. Basic but essential tools

Documentation required

Export Portal


Strategic Theme 5: Small Exporter’s Development Programme

Outcome: Growing the exporter base through training and development



Strategic Support

TISA / SEDA•Identification and Selection of

• Intermediaries• Service Providers• Business / Companies

•Export Readiness Assessment

COTII (CSIR, SEDA, SABS)•Export Readiness Enhancement•Product Quality Improvement•Product Innovation•Productivity Assessment and improvement•Establishment of QM Systems & Procedures•Establishment of Management Systems and Procedures

•Quality Improvement & Cost Control

TISA / TEO / SEDA•Export information•Company visits•Export Marketing plans•Local exhibitions

Export Training and Education Technical Assistance

Advice & MentoringInternational

Market Development

EMIA / CGIC•Pre / Post shipment•Credit Guarantee Schemes

•Target 100 new exporters•11 X5 per sector (55)•5 per province (45)•Business: R - value

Performance Evaluation Export Finance

TISA•National Export Promotion •Strategy•Small Exporters Programme•Provinces•International Partner •Management (ITC, CBI)

TISA / TEO / SEDA•Trade Fairs / Exhibitions•Trade Missions• Market Research•Foreign Offices•Export Councils


Small Exporters Development Programme

• VisionTo create a climate and an environment which will enable SMME’s to secure access to international market opportunities

• MISSION– Assist SMME’s overcome barriers and constraints in accessing the global

market and business opportunities by:– Identify their export training and education needs and then addressing them

in such a way that this will lead to growth in exports.– Facilitating the most cost effective means of technology transfer and training

in such a way that the quality of their products could be continuously improved, and that they be empowered to meet the required export orders in terms of quality and quantity.

– Utilizing various marketing tools to improve their access to such markets and business opportunities

• OBJECTIVEIdentify and assist a minimum of 100 SMME’s per annum to enter International Markets


ISSUES AND CHALLENGES IN THE SMME SECTOR

• Survivalists and Micro Enterprise (SMME’s v/s SME’s) Do they have sufficient growth potential that warrant the required effort to assist them to become real exporters or benefit from the international linkages programme.

• Small businesses require hand- holding This is due to the developmental element within the sector.

• Numbers of Small Businesses in an Economy The numbers demands the development of an effective network of service providers, up to the local level.

• Demands Integrated Approach The SMME Export Development Strategy must be integrated well with the overall National Small Business Promotion Strategy for effective delivery of service.


ISSUES AND CHALLENGES IN THE SMME SECTOR

Issues• Fear of big export volumes.• Lack of Financial resources• Access to raw materials Challenges• Various Issues relating to market access:

– Meeting international health and safety requirements– Adherence to international environmental standards– Adherence to stringent labeling requirements– Bureaucratic customs admission procedures and criteria, etc – Lack of appropriate infrastructure (especially in rural areas) for example: fax, e-mail, etc.– Bad or lack of communication amongst role players – “Paper chase”– Lack of market exposure– Product development: diversity, meeting the world standards, safety and health

regulations.– Training and technology development.


STRATEGIC OBJECTIVES (Interventions)

• Export/ Business Training and Education • Product Development and Quality Control • Export Market Development• Access to Export Finance

– To effectively utilize the DTI Export Financial Assistance Schemes– Financially in order to honor the export orders– Financially to enhance their full participation in the global trade.

• Institutional Development and Support • Linking up with the Export Councils


EXPORT MARKET AND BUSINESS LINKAGES DEVELOPMENT INSTRUMENTS

• Export Seminars and Workshops• Trade Missions• International Business Alliances and Linkages• International Exhibitions• Market Research in Targeted Segments• Foreign Office


Strategic Theme 6: Export Mechanisms



• Current lack of a coordinated approach to align the export community, the Export Promotion Cluster Desks in TISA and the Foreign offices

• Align private sector projects with Export Promotion Cluster Desks and Foreign Offices (25 identified for 2007/2008)

• Capacity building of Export Promotion Cluster Desks• Ensure that Foreign Offices deliver more effectively by:

– A continuous flow of quality market intelligence– Processing more high potential trade leads– Managing national pavilions to best practice standard

Outcome: Effective sales channel in export value chain that enhances deal making and pro-active information sharing


Alignment Of Role Players And Key Actions

Opportunity Identification

•CSP

• Gravity Model

• University ofNW

• ForeignOffices

• Export Councils

Country Product Matrix

Country

Product

Targeting Studies / MSR

Based on regional priority markets

•North America

•Europe

•Asia

•Africa

•Middle East

•Improve nationalcompetitivenessbuilding capacity

•Move up thevalue chain

•Investmentpromotion (FDI)

•Global potential

Industry Development / Push Factors

Export Promotion


MARKET DEVELOPMENT AND ACCESS

Profiling SA Exports

• Advertising

• PR

• Publications

• Generic tradepromotion

• ExportSeminars /Exhibitions

INTER

NA

TION

ALIZA

TION

OF SA

What structure supports the NES and NEPS?

Products with: •Market share•Global potential•Likely vulnerability to protection•Infrastructure supportrequirements•Labor use•Raw material Content•Value added contribution•Extent of backward linkages

Industry Development / Push Factors

Importer Targeting

New buyers

• Existingbuyers

• Buyers liaison

• Trade Fairs

• TradeMissions

Country Branding and Image Building

•National Pavilions

• Inward TradeMissions

• Outward TradeMissions

• Domestic Events

• Consumer Pointpromotions

• Creation of regionalpromotional hubs

FOREIGN OFFICES SUPPORT- Cold calls - Relationship building - Visit existing buyers - Visit new buyers - MSR - Market Intelligence

- Targeting and promotional strategies inline with cluster desks.

Building a National Export Culture


Strategic Theme 7: Financial Instruments for Exporters



• The EMIA instruments are designed for the dti’s export ready clients. • The dti to develop new instruments for Export Promotion and

Development in order to address needs of emerging exporters.• Implement the Capital Goods Feasibility Fund to full potential.• Cooperate with IDC to fine tune the existing pre- and post shipment

finance instruments to also address the needs of emerging exporters

Outcome: Enhance marketing and deal closing capabilities of exporters





Review and Update

Continuous Operational

Improvement Process

Performance Feedback Mechanism

Strategic Impact

Improvement InitiativeProcess Excellence

Process and Customer Service Review

Customer Service

Performance management process• Establish performance management committee

• Objectives:

- Monitor Strategic Themes 2 to 7 according to Quarterly Milestones

- Review deviations and recommend corrective action

- Alert Committee to new opportunities and threats

- Ensure coordination across Divisions and COTII

• Convenor: CD Exports

• Members

- CD’s from TISA, EIDD, ITED,TEO, ERPC and Marketing

- GM’s from SEDA and IDC

• Meet on 15th before end of Quarter

• Secretariat provided by TISA


The Export Development and Promotion Value Chain

Export Promotion

Exhibitions

Pavilions

Missions

Export Advice andMentoring

Export support institutions: COTII, Government Departments, Provincial Agencies, Metros, SETA’s, the Chamber Movement

Foreign Economic

Offices

•Market prospects

•Key contact search

•Face-to- face briefings

•Visit information

•Local information

•Trouble-shooting

Export Development

Trade Statistics

ExportersDatabase

Information On Foreign CompaniesBusiness

OpportunityCentre

Market SurveyReports

CountryProfilesMarket Access

ConditionsTrade

SupportInstitutions

ExportersRoadmap

ExportPublications

Trade Information

Portal

Export Incentives

InformationFinancial

Information

Service Providers

Ready / Not Exporting Exporting

Export Development Service

PMR

IndividualExhibitions

ExportReadiness

Assessment

Desktop Assessments

Site Audits

Productivity Improvement

MarketingSupport

Sector Specific

Not Export Ready

Training

Policy and strategic support:

ERPCIndustry Forum

EIDD(Competi-tiveness)

ITED(Market access)

Customised Exporter ServiceMarketing

Cus

tom

ised

Sec

tor

Pro

gram

mes

SEDA The EnterpriseOrganisation Trade and Investment South Africa


How to contact the dti

Customer Contact Centre

0861 843 384

Website

www.thedti.gov.za


Thank you

Documents

The Design and Implementation of the Export Strategy · 2015. 1. 30. · the dti, including priorities with export promotion and development ... –Import parity pricing in critical