Deputy Minister Pahad to Consolidate Bilateral Relations in Portugal and Spain

Pretoria - South African Deputy Foreign Minister Aziz Pahad will pay officials visits to Portugal and Spain from Monday - Tuesday, 9-10 May and Wednesday - Friday, 11-13 May respectively.

The visit to Europe by Deputy Minister Pahad comes in the context of South Africa's foreign policy whose central thrust remains the consolidation of the African agenda including building strategic, strong and vibrant bilateral political and economic relations with the global community.

Portugal

While in Portugal, Deputy Minister Pahad is scheduled to hold bilateral political and economic discussions with his counterpart Secretary of State for Foreign Affairs and Co-operation João Cravinho, Director-General for External Policy in the Foreign Ministry and Former Ambassador to South Africa Fernando Pereira, and the Chairperson of the Parliamentary Committee for Foreign Affairs, Luis Arnaut.

Issues on the agenda of discussions are expected to include:

· The consolidation of bilateral political and economic co-operation between both countries;
· The African agenda and European support for NEPAD as the programme through which to alleviate underdevelopment and poverty in Africa;
· The consolidation of North-South relations;
· The role of Europe and South Africa in the resolution of the crisis in the Middle East;
· Parliamentary co-operation between both countries and the Africa through the Pan-African Parliament; and
· Global issues of mutual interest including the reform of the United Nations.

Deputy Minister Pahad will also hold discussions with the Chairperson of Socialist International, António Guterres regarding preparations for the forthcoming Progressive Governance Summit to be hosted by South Africa in October 2005.

Bilateral Economic Relations

· Exports to Portugal amounted to R754,7 m in 2003 (down from R1, 010 bn in 2002) and imports amounted to R535, 2 m (down from R595 m in 2002); South Africa enjoys a positive trade balance of R 219,5 m (down from R 415 000 in 2002).
· FDI flows from Portugal amounted to R314 m for the period 1999-2002.
· The most important South African exports to Portugal are coal, steel products, frozen fish, fruit juices, fruit, vegetables, wood and granite. Main imports from Portugal are cork, machinery, textile fibres, cables, electronic equipment and articles of sound and image.
· The largest South African company operating in Portugal is the Abadare Cables subsidiary, Alcobre, that manufactures cables for the telecommunications industry. The SA property company, Homenet, has an office in Lisbon while two smaller new companies, Peixe do Cabo (fresh fish) and Chef Works ARDOCRAI LDA (Chefs outfits) are also present. SmartPac, a "smart card" company has an agreement with the local company Prism and South African Netcare established a partnership with the Portuguese private health care company, Private Hospitals of Portugal (HPP) on 2 August 2004. In addition there are also a number of ostrich breeding companies who have strong Southern African connections as well as various small importing and exporting companies especially in the linen and curtaining industry.
· The Portuguese conglomerate, Sonae, bought Sappi-Novoboard (TAFESA) in 2004 and the Mpumalanga Investment Initiative has hopes for further Portuguese investments in projects in their province.
· The Portuguese family company Gelpeixe imports large quantities of South African hake and other fish from the South African company, Viking.

Spain

On conclusion of the visit to Portugal, Deputy Minister Pahad will visit Spain from Wednesday - Friday, 11 - 13 May 2005 where he will co-chair, with his Spanish counterpart Leon Gross, the second session of the South Africa - Spain Annual Consultations on Friday, 13 May 2005 in Madrid.
Issues on the agenda of discussions are expected to include:
· The consolidation of bilateral political and economic relations;
· The African agenda including conflict and post-conflict resolution efforts underway in Côte d'Ivoire, Sudan and Equatorial Guinea. It is also expected that both sides will exchange views on the current situation in Western Sahara; and
· Issues of global interest including the reform of all institutions of the United Nations, the Barcelona Process, the situation between Palestine and Israel and Iraq.

In addition Deputy Minister Pahad is also scheduled to participate in the Spanish Annual Seminar on Sub-Saharan Africa in Tenerife on Thursday, 12 May 2005. Deputy Minister Pahad will deliver an opening address to the seminar and participate in a discussion entitled, "Africa as a New Political Priority."

Participants in the seminar also include Spanish Foreign Minister Miguel Angel Moratinos; Premier of the Canary Islands, Mr A Martin; Said Djinnit, African Union Commissioner for Peace and Security; Mr Wickstead, the Executive Secretary of Prime Minister Blair's Commission for Africa; Miguel Angel Navarro, Spanish Secretary-General for the European Union; and Mohammed Ibn Chambas, Executive Secretary of the Economic Community of West African States (ECOWAS).

Bilateral Economic Relations

· Exports to Spain amounted to R6,2 bn in 2003 (down from R6,4 bn in 2002) and imports amounted to R3,8 bn (up from R3,5 in 2002); South Africa enjoys a positive trade balance of R2,4 bn (down from R2.9 in 2002).
· For the period 1999-2002, Spain was the 18th largest investor to South Africa. During this period, it invested $ 246 m (R2, 020 bn)- Source: Business Map.
· Economic relations with Spain are excellent and shows a strong potential for further growth and development. The El Corte Ingles project has not only brought in R 65 m estimated purchase of South African goods, provided the benefit of a South African marketing campaign estimated at R10 m, but also provides an opportunity to permanent future market access for SA niche goods. It will provide opportunities to about 100 SMMEs including 10 BEEs. Tourism figures estimated at about 20 000 Spanish tourists (among two highest spending sender countries) could quadruple according to estimates from SAA and tour operators in SA. Deputy Minister L Hendricks will preside at the launch in Madrid on 20 May 2005.
· Several Spanish companies are currently involved in business ventures in South Africa, for example "Dragados y Construcciones" is involved in the construction of the Bakwena Platinum High Way, while Acerinox purchased an equity stake in Columbus Steel valued at E 232 m (64% of the company).

"Dragados y Construcciones" is a construction company that is actively involved in the construction industry in South Africa. It is one of the foreign partners in the consortium of construction companies that was awarded the tender for the N4 Bakwena Platinum highway. Dragados is also a key partner in one of the two consortia bidding for the Gauteng Rapid Rail project. Some Spanish companies are also interested in the Coega IDZ.

Acerinox recently purchased an equity stake in Columbus Steel (64% of the company valued at Euro 232 m). The managerial expertise brought by Acerinox resulted in a net profit of R224 m at the end of 2002.
· The Gauteng MEC for Finance and Economic Affairs, Mr J Moleketi in a report stated that Grupo Antolin (a Spanish company) was in a joint venture with a BEE company, Tensile Rubber Mouldings and would soon establish operations at the envisaged automotive supplier park in Rosslyn, Pretoria.
· A further issue is that the Spanish Government expressed interest in is the Gauteng Rapid Rail Project in which the major Spanish construction company, Grupo Dragados, is bidding jointly with LTA of South Africa for the project.
· The Embassy in Madrid has entered into a partnership with the Confederation of Spanish Business (CEOE) and has planned a comprehensive "Economic Plan of Action" for 2004/5 which entails joint road shows to various important regions of Spain to promote exports and FDI.

Issued by Ronnie Mamoepa on 082 990 4853.
Department of Foreign Affairs
Private Bag X152
Pretoria
0001
6 May 2005