Media Statement: Deputy Foreign Minister Sue van der Merwe to hold Discussions in Madrid

Pretoria – South African Deputy Foreign Minister Sue van der Merwe will on Sunday 15 February 2009 depart for Spain where she will pay an official visit from Monday – Wednesday 16-18 February 2009 during which she is scheduled to hold bilateral political, economic and trade discussions with Spanish Secretary of State for Foreign Affairs Angel Lossada on Monday 16 February 2009.

Deputy Minister van der Merwe and Secretary of State Lossada will hold discussions within the context of South Africa’s priority to strengthen bilateral political, economic and trade relations with Spain with a view to consolidating North-South relations.

Issues on the agenda of discussions between Deputy Minister van der Merwe and Secretary of State Lossada are expected to include, among others:

• The status of bilateral political, economic and trade relations and ways in which this can be strengthened.  Spain has been identified as a priority emerging market for South Africa in terms of outbound trade and inward investment.
• A briefing on developments in Africa including views by Secretary of State Lossada on Spain’s Africa Plan;
• A briefing regarding developments in the European Union including the impact of the global financial crisis on the Union and ways in which this will be addressed;
• African peace and security as well as conflict resolution initiatives including Zimbabwe, the Democratic Republic of Congo, Burundi, Sudan, Somalia and Western Sahara;
• The Middle East and the implementation of the Roadmap;
• Other issues of mutual interest including the comprehensive reform of the United Nations.

While in Spain Deputy Minister van der Merwe will also address Casa Africa which is a public consortium, created within the framework of Spain’s Africa Plan in the Canary Islands.  It is an initiative between the Spanish Ministry of External Affairs and Cooperation (MAEC) and the Spanish Agency for International Cooperation for Development (AECI), the Canary Island Regional Government, the island administrations of Fuenteventura, Lanzarote, Gran Canaria and Tenerife and the Las Palmas de Gran Canaria Town Hall, all of whom are represented through a Council of Directors.  Casa Africa, as a space for meeting and open exchange among citizens of Africa and Spain, aims to promote awareness of their respective realities, enhance overall Spanish-African cooperation and also African-European dialogue between cultures.  It is also intended to serve as a catalyst and reference point for Spanish Africanism, from its base in the Canary Islands.

Deputy Minister van der Merwe is also expected to hold discussions with Minister for InteriorAlfredo Pérez Rubalcaba, the Secretary General of Spanish international Cooperation Agency (AECI) and the President of the Royal Spanish Football Federation.

Deputy Minister van der Merwe is expected to return to South Africa on Thursday 19 February 2009.

Bilateral Economic Relations

Spain the worlds’ eighth largest economy, but it is also the sixth largest investor worldwide and the ninth largest recipient of FDI. It has consistently sustained growth rates above the European average in recent years.

In 2007, South Africa’s exports to Spain totalled € 1,5b (an increase of 9% on the 2006 figure).  South Africa’s main exports were coal (€ 409 m), fish (€ 109 m), fresh fruits (€ 35 m), iron and steel products (€ 173 m), mechanical appliances (€ 317 m) and automotive parts and accessories (€ 71 m). Spain is South Africa’s 9th most important export market.

Spanish exports to South Africa grew by 4% to € 807 m in 2007.  The most important products exported to South Africa were vehicles, parts and accessories (€ 354 m), machinery and mechanical appliances (€ 78 m), ), electrical machinery and equipment (€ 39 m), furniture and related products (€ 30 m) and plastics and articles thereof (€ 22 m)

Bilateral trade (thousand euros)

Source: Spanish Ministry of Industry, Trade and Tourism

Investment

Spanish outward investment to South Africa (million euros)

Up to 2006, South Africa was the largest recipient of Spanish outward investment in Africa. In 2007 it was surpassed by Tunisia. Since 2004, South Africa and Tunisia were the only recipients of Spanish FDI.

On 23 June 2006 South Africa and Spain signed an Avoidance of Double Taxation Agreement and a Prevention of Fiscal Evasion Agreement with respect to taxes on income and capital.  This Agreement, together with the Agreement for the Reciprocal Promotion and Protection of Investments, signed in 1998, has laid the foundation for increased bilateral investment flows.

The following sectors in South Africa were, to date, targeted for FDI by Spanish companies: Metals (€ 245 m); manufacturing of non-metallic minerals (€ 119 m), automotives (€ 26 m), wood and cork (€ 26 m), construction (€ 15 m) and chemicals (€ 4 m).

Spanish companies such as ACS Dragados (Platinum Highway), Acerinox (Columbus Steel), Grupo Antolín (Automotive), Irizar (Luxury buses), Ulma (packaging) and Union Fenosa (mining) all have investments in South Africa.

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

Infrastructure:  Seven of the world largest 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 Bombela.  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 seeking opportunities in this sector in South Africa.
 
Tourism:  Spanish hotel chains currently own 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.  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.

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Pretoria
0001

15 February 2009