Eastern Cape Development Corporation takes its long-term approach to grow trade global MyZA

OceaDevelopment financier, the Eastern Cape Development Corporation (ECDC) is taking its fight for a greater share of the national export market to the east as it prepares to place seven local companies on a 30-month permanent trade fair in Ningbo, China today.

The first South African company to exhibit at the international Ningbo exhibition, ECDC hopes to open opportunities for Eastern Cape companies to access the large Chinese consumer market. Between January to July 2012, a total of $500 million worth of imported agro-processed products went through the Harbour of Ningbo alone. The product ranges included wine, milk, fruit and seafood. Ningbo citizens alone, consumed 5 415 tons of imported foods during this period.

Located northeast of the Zhejiang province of China, Ningbo has the largest seaport in China and the second largest in the world. It forms a major part of China’s import and export market. The United States Food Industry Association predicts that Chinese imported and exported food sales will grow at a speed of 15% year on year. To 2018, China will become the world’s largest consumer of imported and exported food. The Chinese domestic market size of imported food will reach up to $480 billion.

“Ningbo therefore presents immense opportunities for the Eastern Cape as it could serve as a channel for Eastern Cape products to larger markets within China and the rest of the world. Our long-term view is to attract investment from China and boost employment creation in the province by acquiring long-term contracts and new investment.

“The R2 million ECDC investment should ensure an exhibition platform for the seven Eastern Cape businesses drawn from East London, Port Elizabeth and Grahamstown at the Ningbo International Conference and Exhibition Centre. The companies operate in the agriculture, agro-processing and manufacturing sectors,” says ECDC’s market access unit’s Zodwa Kepeyi.

The seven companies participating at the exhibition are East London-based Oceanwise (cob fish), Gaehlercorr Industries (abalone) and Superfecta Berries (bluerries). Two Port Elizabeth companies Momentos of Africa (mohair products) and Mendabath (bath resurfacing kit) as well as Carara (cherry peppers) from Grahamstown and Makana Meadery (honey beer) will also participate.

The investment by the corporation is aimed at increasing the value of trade and number of exporters from the province by facilitating access for local entrepreneurs to new markets. ECDC is seeing growth in the area considering that the value of exports facilitated by the financier has grown from R900 million in 2010/11 to R1,7 billion in the past financial year. This figure is expected to grow in 2012/13.

“ECDC’s responsibility to increase the value of trade means it is bound to explore new opportunities made possible by various trade policies. Subsequently, the corporation identified the City of Ningbo as a suitable location after several trade missions it executed in partnership with the Department of Trade and Industry (dti) to Chinese cities such as Beijing, Hong Kong and Xaimen,” says Kepeyi.

New opportunities in emerging markets presented by the BRICS (Brazil, Russia, India, China and South Africa) collaboration are a major focus for ECDC.

For instance, “missions to China and India provided us with invaluable insight into new industry opportunities such as the bamboo industry. These countries are at an advanced stage in exploiting the socio-economic value of bamboo,” says Kepeyi.

There has also been growth in the number of Dti incentives accessed by local traders. Traders have begun to tap into incentives and partnerships with the Nelson Mandela Bay Metropole’s Tradepoint which helps create awareness of the export business. The finalisation of the provincial trade promotion strategy has clarified the roles of the various arms of government in boosting trade and increasing competitiveness.

Tradepoint SA Nelson Mandela Bay is a not for profit organisation supported by ECDC and Nelson Mandela Bay Municipality. Specifically targeting the export sector, it is aimed at assisting and expanding small and medium enterprise participation in global trade.

“During the period August 2012 to January 2013, Tradepoint has assisted several Nelson Mandela Bay-based businesses to participate in trade missions to Brazil, China, UK, France, Germany, Turkey, USA and Saudi Arabia.

“One million rand of township fine art was exported to the United States in September 2012, and export orders from Hong Kong and Egypt worth R 1 million each have been secured. Tradepoint has also hosted inbound trade missions from China, USA and Romania,” explains Kepeyi.

Kepeyi says that while the automotive sector remains the leading exporter from the province, there has been steady growth in sectors such as agro-processing, energy, and general manufacturing. The automotive sector continues to boost the value of exports largely due to international contracts for the resident original equipment manufacturers.

Figures from the previous financial year indicate that exports remain largely in the auto sector (40%) but there are encouraging exports for agro-processing (29%). Sectors sitting at the lower end of the export spectrum are clothing and textiles (9%), energy (9%), general manufacturing (6%), medical (3%) and security (1%).