Minister Dlamini Zuma to Hold Bilateral Discussions with her Italian Counterpart

Rome - South African Foreign Minister Dr Nkosazana Dlamini Zuma will on Wednesday 9 November hold bilateral political and economic discussions with her Italian counterpart, Foreign Minister Gianfranco Fini in Rome, Italy.

Minister Dlamini Zuma's interaction with her Italian counterpart comes within the context of South Africa's commitment to consolidate relations with countries of the North in order to create the conditions for the developmental agenda of Africa in particular and the South in general to be achieved.

In this regard, Italy is a member of the G-8 and the European Union - both critical partners in South Africa's quest to fight poverty and underdevelopment in South Africa and the Continent, therein creating a better Africa for all who live in it.

Ministers Dlamini Zuma and her Italian counterpart, Gianfranco Fini will review the state of bilateral political and economic relations between both countries and also discuss international issues of mutual concern including:

• the capacity of the African Union (AU) to deal with conflict resolution and peacekeeping;
• the peace processes in Sudan, Somalia, Eritrea, DRC, Cote d'Ivoire;
• current developments in Iraq and the Middle East; and
• the comprehensive reform of all institutions of the United Nations, including the Security Council.

While in Italy, Minister Dlamini Zuma will have an opportunity to chair the Regional Conference for the South African Ambassadors and High Commissioners in Europe and Americas from Tuesday - Wednesday, 8 - 9 November 2005.

Economic Bilateral Relations

Italy ranks amongst South Africa's top ten trading partners. South African exports to Italy are still dominated by precious and non-ferrous metals: basic iron and steel, and ferro-alloys; coal; and quarried stone/granite. Other exports to Italy are general purpose machinery; pulp, paper and paperboard; processed meat, fish, fruit; leather and wool.

Some value added SA products are increasingly penetrating the Italian market, including processed and preserved fish and fish products; manufacture of other general purpose machinery; production, processing and preserving of meat and meat products; preparation and spinning of textile fibres; fruit and vegetable crops; market gardening; horticulture; tanning and dressing of leather; pulp, paper and paperboard; basic chemicals.

South African imports from Italy consist mainly of machine tools, auto vehicles and components thereof, industrial machinery, jewellery and telecommunications equipment.

In 2004 total trade between South Africa and Italy amounted to €3.157 billion (+23% compared to 2003), with the positive trade surplus (for South Africa) of Euro 862 million, according to figures supplied by ISTAT (Italian Central Institute of Statistics).

TRADE STATISTICS (all figures in € '000)

INVESTMENT

Prior to 1995, investment flows from Italy to South Africa were negligible as compared with other major industrialised countries. The situation, however, changed significantly in 1997 and 1998 when Italian companies invested R127 million and R668 million respectively, ranking 3rd as South Africa's investment partner.

According to the latest statistics available, investments from Italy to South Africa amounted to €38.5 million (R302 million) in 2004 and €5,2 million (R44 million) in 2003.

Some of the Italian companies invested in South Africa:

FIAT Auto made an investment of R250 million for the production and distribution of motor vehicles in South Africa and for export.

Magneti Marelli has made an investment of approximately R60 million for the production and export of catalytic converters.

Parmalat had made an investment of R200 million in the dairy-products sector

Mario Levi - In 1999 Mario Levi Srl invested in the North West Province buying an existing tannery for the production of wet blue hides for an initial investment of R65 million and established the Mario Levi Manufacturing South Africa. A further investment of R75 million was announced in 2002 in the cutting and finishing plant in Port Elizabeth employing 240 more employees and the capacity to produce 3 000 hides per day for the manufacture of car leather seats.

Almec - A joint venture with Bel-Essex Corporation was announced in February 2002, establishing a new South African company: "Bel-Mec Die Casting" - Aluminium high-pressure die-casting foundry. Initial investment was R109 million.

Dorper-Leader Group - processing of leather. Initial investment R16 million (2000)

Silmar - Established a joint venture with Lorenzo Chain (Pty) Ltd to manufacture gold chains for export (value of the investment: approx. R20 million).

Oro Africa - the Italian Jewellery Manufacturer Filk SpA invested R25 million in 1998 to establish a joint venture with Efune Brothers Oro Africa to manufacture gold chains for export.

Silplat - In 2003-2004 Silmar further invested in South Africa, establishing a joint venture with SA Links, Impala Platinum, Micofin Corporate Services and Saab-BAE Systems called SILPLAT for the manufacture of platinum chains and jewellery, particularly for export to China and the United States. The value of the investment was R100 million of which 50% came from the Italian partner.

Capstone - Papini (Textile Machinery) and Confezioni L'Uomo (Menswear) established a joint venture with the Ibrahim family (owners of Quince Manufacturing) for the production of menswear for the export market in Mooi River, employing initially 700 people. The value of the investment was R 241 million of which 20% came from the Italian consortium.

In 1998 Aeroporti di Roma (ADR) purchased a 20% stake in the Airports Company of South Africa (ACSA) with an investment value of R 819 million. Previously, ADR has indicated that it intended to take up a further share of 10%. However, Aeroporti di Roma recently (September 2005) sold this 20% stake to the Public Investment Co-operation (PIC) for R1,7bn.

There are plans by an Italian motorcycle company, Piaggio to invest in KwaZulu Natal.

South African companies invested in Italy:

SASOL has five production plants in Italy producing olefins, surfactants and solvents and also has a Research and Development facility in Milan. It is a major player on the European and world chemicals market.

SAB Miller has bought 60% stake in the main Italian beer brewery Peroni at € 246 million in 2003 with the option of increasing the shareholding to 97.8% over a period of five years.


Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Tshwane
0001

8 November 2005