Minister Dlamini Zuma to boost Economic Ties in Spain

Pretoria – Foreign Affairs Minister Dr Nkosazana Dlamini Zuma will on Thursday 5 June 2008 hold bilateral political, investment and trade discussions with her Spanish counterpart Minister of Foreign Affairs and Cooperation Miguel Ángel Moratinos in Madrid, during her official visit to Spain scheduled from Wednesday – Saturday 4-7 June 2008.

Minister Dlamini Zuma’s visit to Spain comes within the context of South Africa’s commitment to strengthening bilateral political, investment and trade relations with Spain to further promote the dynamic economic relations between the two counties.

In this regard, total trade between South Africa and Spain has increased from R11 billion in 2004 to R19 billion in 2007.  Spain is South Africa’s 7th largest export destination globally.

Ministers Dlamini Zuma and Moratinos are also expected to consider enhanced Spanish engagement with Africa through focused support for conflict resolution on the African continent and the promotion of social and economic developments including support for the Africa Union, socio- economic programmes, NEPAD.

Discussions will also look at South Africa’s participation in the Zaragoza World Expo which will be held from June – September 2008 as well as increased co-operation in the multilateral context, inter alia, the comprehensive reform of United Nation Institutions and United Nations Security Council issues.

During the visit Minister Dlamini Zuma will interact with a number of Spanish companies who have shown a strong interest in investing in South Africa.

Bilateral Economic Relations

Spanish exports to South Africa also grew by 4% in 2007. The most important products exported to South Africa were vehicles, parts and accessories (Euro 354 m), machinery and mechanical appliances (Euro 78 m), ), electrical machinery and equipment (Euro 39 m), furniture and related products (Euro 30 m) and plastics and articles thereof (Euro 22 m)

Bilateral trade (thousand euros)

Source: Spanish Ministry of Industry, Trade and Tourism

Spanish outward investment to South Africa (million euros)

Spain has also been identified as a priority emerging market for South Africa in terms of outbound trade and inward investment.

South Africa remains the largest recipient of Spanish outward investment in Africa. Other African recipients are Namibia, Morocco, Cape Verde Islands and Algiers.

Spain could be considered as a source of FDI in the following sectors:

Infrastructure:  Seven of the world biggest construction companies are Spanish.  The largest one in the world, ACS Dragados, has a stake in South Africa’s Platinum Highway.  The company was also part of the consortium that lost the bid for the Gautrain to the French Consortium.  The Spanish train coach manufacturer CAF, was also part of this consortium and is still very interested in the South African market.  Other companies are also looking for possibilities in South Africa.  A subsidiary of ACS Dragados (Dragados SPL) which specializes in port management concessions is looking for similar opportunities in South Africa.  (2010 World Cup related projects are to be marketed amongst Spanish construction companies).

Tourism:  Spanish hotel chains currently owned 642 hotels abroad with an accommodation capacity of 162 000 rooms.  Their biggest investments have been made in the Dominican Republic, Maya Riviera (Mexico) and Cuba.  There is renewed interest amongst Spanish hotel groups to explore possibilities in South Africa.  At this moment the Spanish Group NH hotels manages two hotels in South Africa (The Lord Charles in Cape Town and the NH Plettenberg Bay). 

Agro-processing (machinery, processing and packaging) and aquaculture:  Spain is one of the world leaders in green houses, irrigation systems and packaging machinery for foodstuffs.   The Spanish company, Ulma Packaging has invested in South Africa.

Renewable Energy:  Spain is a very advanced in the field of renewable energy, mainly wind and solar power.  Companies such as Iberdrola, Isolux Corsan, ATERSA and Isofoton are well known in developing these energy resources. Currently Isolux and ATERSA are looking at opportunities in the field of wind energy and solar energy together with Eskom.

Airlinks: Currently Iberia Airlines is the only airline flying the Madrid – Oliver Tambo International route. A relatively small South African airline called REDAIR which resorts under the ownership of Civair (Pty) Ltd has applied to the South African and Spanish Civil Aviation Authorities to commence flights to Spain from December 2008. This process has as yet not been finalised.

Health: The Spanish Company Makiber is currently in discussion with the Province of Kwazulu Natal with regard to building three hospitals in the Province. The Spanish Bank Santander is prepared to put up financing for the project.

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Pretoria
0001

4 June 2008