Africa-Japan Partnership Forum
4 July 2006
Pretoria - South African Deputy Foreign Minister Aziz Pahad will co-chair,
together with his Japanese counterpart Senior Vice Minister for Foreign
Affairs, Yasuhisa Shiozaki, the eighth session of the South Africa-Japan
Partnership Forum at the Farm Inn in Pretoria scheduled from Thursday - Friday,
6 - 7 July 2006.
This session will pay tribute to former Prime Minister Ryataro Hashimoto who
passed away on 1 July 2006 in Tokyo. Mr Hashimoto in his capacity as Senior
Foreign Policy Advisor to the Prime Minister of Japan and President Mbeki as
the Deputy President of South Africa at the time, conducted the first session
of the partnership forum from 13 - 14 January 1999 in Pretoria.
Since Japan is a member of the Group of Eight (G-8), the eighth session of
the South Africa - Japan Partnership Forum comes within the context of South
Africa's commitment to promote North-South co-operation in support of the
African agenda through amongst others the G-8. In this regard Deputy President
Phumzile Mlambo-Ngcuka, in April this year, led a senior government and
business delegation on an official visit to Japan.
Deputy Minister Pahad will lead a senior South African government delegation
to the Forum consisting of officials from the departments of trade and
industry, arts and culture, science and technology, health, education,
agriculture, treasury and sports.
Discussions are expected to focus on:
* bilateral political and economic relations between the two
countries;
* the G-8 Summit to be hosted by Russia later this month;
* the Accelerated and Shared Growth Initiative for South Africa (AsgiSA) and
the support of Japanese co-operation partners;
* New Partnership for Africaâs Development (NEPAD);
* African regional issues including the Sudan, the Democratic Republic of
Congo (DRC), Cote d'Ivoire and Burundi;
* the Tokyo International Conference on African Development (TICAD);
* the World Trade Organisation (WTO) talks; and
* developments in the six party dialogue aimed on alleviating tensions on
the Korean peninsula including the non-proliferation of weapons of mass
destruction.
Japan's economic policy toward African development taken in its entirety is
directed within the Tokyo International Conference on African Development
(TICAD) process, which was first held in 1993.
TICAD has led to the implementation of projects aimed at increasing African
human resource capacity, infrastructure development and investment. In the
context of the Gleneagles G-8 Summit held in July 2005, Prime Minister Koizumi
committed Japan to holding TICAD IV in 2008 in an effort at making TICAD the
cornerstone of Africa-Japan relations. Japan has long advocated the importance
of ownership of the development process by Africa, in partnership with the
international community.
At the Africa-Asia Summit in April 2005 Japan pledged to double their ODA to
Africa in the next three years. Such ODA will amount to 0,7 percent of Japan's
GDP. Japan is of the opinion that based on the Asian experiences the key to
African economic development is to foster the private sector through he
promotion of trade and investment. In line with this Japan hosted the TICAD
Asia-Africa Trade and Investment Conference in November 2004.
For Japan, South Africa is a strategic partner in the furthering of their
Africa strategy. Japan views their support to South Africa as a gateway to the
rest of Africa, and as a result both countries are exploring tripartite
co-operation on specific projects as the new frontier for co-operation between
South Africa and Japan.
Japan is one of the South Africa's key economic partners in the world and
South Africa's largest trading partner in Asia.
Furthermore, exports to Japan have increased since 1992 from R4 billion to
approximately R33 billion at the end of 2005, whilst imports from Japan in the
same period have increased from R5 billion to R24 billion, which ensures a
positive trade balance of R10 billion.
Japan became South Africa's first export partner in 2005, followed by the
United Kingdom (UK), Germany and US. Japan is South Africa's fourth largest
import partner after Germany, China and the USA. In the past decade South
Africa has consolidated its position as Japan's most important trading partner
in Africa.
Bilateral economic relations
Although Japan has historically been a key partner for South Africa, the
relationship was initially based on the export of strategic raw materials and
agricultural products from South Africa, and the importation of the technology
intensive or value added goods, and as such the relationship remained
stagnant.
However, the structure of trade has now changed to include value exports
most notably vehicles (such as BMW 3-series and Mercedes C-Class).
* South Africa supplies Japan with over 70 percent of its platinum imports
(43,535 kg in 2004; or worth Yen 133 billion/approximately US 1,3 billion
dollars).
* South Africa also had a 23 percent market share of motor vehicles exported
to Japan (in 2003).
* South Africa is the second largest exporter of citrus to Japan with over
seven million cartons expected in 2005 (primarily grapefruit 6,2 million
cartons and oranges and lemons). South Africa exported 10 percent of its citrus
to Japan in 2004.
* South Africa shipped 27,800 tons of canned deciduous fruit (17 200 tons of
peaches, 3 500 tons of pears, 2 500 tons of apricots and 4 600 tons of mixed
fruit) to Japan in 2004. This represents a major portion of the 27 percent of
our deciduous exports to Asia.
* Japan is also an important export market for rooibos tea.
South Africa exported 286 tons of rooibos tea to Japan in 2004.
* South Africa is the eighth largest wine exporter to Japan exporting 1 230
000 bottles (which accounts for one percent of wine imports to this market) in
2005.
* The Embassy facilitated participation from Limpopo Province in Foodex
(agri-processing exhibition and an investment seminar) in Tokyo from 14 - 17
March 2006 and also assisted local importers in Intex (agri-processing and
tourism consumer exhibition) from 1 - 5 May 2006. The Embassy also hosted in
store agri-processing exhibition in Japanese Departmental stores in Sendai,
Kitakyushu and Sapporo. The Embassy also facilitated the attendance of Japanese
importers and journalists (financed by Wines of South Africa) to Cape Wine
2006, held from 4 - 6 April 2006.
Trade statistics (2002 - 2005)
2005
Exports R33,156,988
2004
R26,601,871 R 24,172,021 - R24,783,866
2003
Imports R23,750,596
R20,942,096
2002
R18,236,646
R19,122,094
Trade balance
2005
R9,406,392
2004
R5,659,775
2003
R5,935,375
2002
R5,661,772
Investment
* The pattern of Japanese investments in South Africa is perceived to
resonate with Japan's post-war activities in East-Asia, i.e. closely tied to a
programme of industrialisation.
* Japan investment in South Africa amounted to R19,86 billion in 31 December
2002 (according to the South African Reserve Bank (SARB): SA Survey 2003/2004).
In this amount direct investment amounted to R3,9 billion and non-direct
investment to R16.42 billion.
* In the automotive sector the Toyota Motor Corporation (TMC) has invested
approximately R4,4 billion (including R1 billion in a water-based paint plant)
in South Africa since 2003.
* The doubling of export volume at the Toyota South Africa Motors Plant in
Prospecton, Durban to 220 000 units (Hilux and Corolla) by 2007 has
necessitated expansion and new investments by Toyota Motor Corporation and
their affiliated automotive supplier companies in South Africa. Nissan has also
had to increase expanded production in the Rosslyn Plant in South Africa.
* Toyota Tsusho Africa (TTAF) plans new investments, which totals R155
million (by December 2006).
* TTAF plans a joint venture with Mittal Steel to establish a new plant
(18,000 sqm) in Southgate, and this represents another fairly large
investment.
* Japanese automobile component companies that have invested in South Africa
in the past year include Denso, Aisin Seki and Yazaki.
* In the minerals sector, Mitsubishi Corporation owns 51 percent of Hernic
Ferro Chrome Mine and recently invested approximately R500 million (building a
fourth furnace) to increase their production capacity from 260 000 tons to 420
000 tons per annum.
* Mitsubishi Chemical Corporation's investment in the acrylates plant (in
Sasolburg) and was yielding unexpectedly high exports (of chemicals). The
company is investigating expanding the existing plant.
Direct investment in South Africa by Japan:
* Fiscal 2002: five cases, 12,9 billion yen
* From fiscal 1993 to fiscal 2002, total:39 cases, 95 billion yen.
* Which include among others:
* Nissan Diesel Motors Co. (Auto)
* Mitsubishi Chemicals (Chemicals)
* Itochu Corporation (Metals - Ferro manganese)
* Sumitomo Corporation (Metals)
* Marubeni - Information Communication Technology (ICT)
* Toyota Motor Corporation (Auto)
The investment has contributed in a marked degree to the creation of jobs as
well as having other down-stream results. The transfer of technology which has
also accompanied Japanese investment is of long term importance to South
Africa. There is a concerted effort being made to develop and co-operate in the
food and textile industry.
Black Economic Empowerment (BEE)
Important BEE agreements have been recently concluded with Japanese
industry, i.e.:
* The signing of an agreement between Transnet and Mitsui and Company
African Rail Solutions (MARS) Pty provides for the supply of 110 new electric
AC/DC locomotives for the coal line at a total cost of R3,5 billion over five
years.
This agreement marks the first major investment in Spoornet's projected R35
billion capital investment programmes for the next five years. MARS is a
partnership between Mitsui and Company Limited, Sibambene Trade and Services
Holdings (Pty) Limited and African Sky Innovative Solutions (Pty) Limited.
Mitsui has a 59 percent share in the company and the BEE partners own the
remaining 41 percent. The main subcontractors are Union Carriage and Wagon
Partnership made up of Duduza Rail and Union Carriage and Wagons and Toshiba, a
major Japanese locomotive manufacturer.
In fact, there are approximately 43 companies involved in this project, with
BEE ranging from five percent to 100 percent. Transnet CEO, Maria Ramos, stated
that the involvement of BEE in the high tech rail manufacturing industry and
the knowledge and skills transfer that will accompany it, on this scale, is a
first for the country.
Furthermore, 50 percent of the contract value will be executed in South
Africa and will result in an additional 1 500 direct and indirect employment
opportunities. Also it is Spoornet's intention to outsource the maintenance
services envisaged in the contract to Transwerk, a division of Transnet, with
MARS providing technical support.
* Sanko Shipping Company of Japan acquired in 2005 a stake in two South
African BEE companies, i.e. a 20 percent share in Marine Bulk Carriers and a 10
percent share in Marine Crew Services. This partnership has been aimed at
increasing the country's interest in the international shipment of cargo
(mainly coal and iron ore) and creating job opportunities for South Africans.
It is expected that Sanko would absorb most of these trainees and also
gradually increase the number of South Africans employed on their vessels.
* Kashikey Company Ltd, announced 8 July 2005, together with another
Japanese company, Nagahori invested US one million dollars (for a 20 per cent
share) in a BEE inclusive (Sphere Holdings with a 20 percent share headed by
Itumeleng Kgakoesele) diamond beneficiation project in Cullinan.
Media programme for official visit to South Africa by Japenese Senior Vice
Minister for Foreign Affairs Yasuhisa Shiozaki
Date: Thursday, 6 July 2006
Time: 08h00 - Arrival of media for photo opportunity and introductory
remarks on commencement of opening plenary of eighth session of South Africa -
Japan Partnership Forum
Venue: The Farm Inn, Pretoria
Time: 08h30 - Opening remarks by Deputy Minister Aziz Pahad and Senior Vice
Minister Yasuhisa Shiozaki.
Media in attendance for introductory remarks and photo opportunity.
Date: Friday, 7 July 2006
Time: 09h30 - Arrival of media ahead of joint press conference by Deputy
Minister Pahad and Senior Vice Minister Yasuhisa Shiozaki on conclusion of
eighth session of South Africa - Japan Partnership Forum.
Venue: The Farm Inn, Pretoria
Time: 10h15 - Joint press conference
For further information contact:
Ronnie Mamoepa
Cell: 082 990 4853
Manusha Pillai
Cell: 082 389 3587
Issued by: Department of Foreign Affairs
4 July 2006
Source: SAPA
