S van der Merwe to pay official visit to Spain, 16 to 18 Feb

15 February 2009

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, 16 February 2009 to Wednesday, 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 Co-operation (MAEC) and the Spanish Agency for
International Co-operation 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 co-operation 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 Interior Alfredo Pérez Rubalcaba, the Secretary General of Spanish
international Co-operation 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 foreign direct investment
(FDI). It has consistently sustained growth rates above the European average in
recent years.

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

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

Bilateral trade (thousand euros)

Year: 2004
Imports from South Africa: 1 164 652
Annual growth: 24%
Exports to South Africa: 479 758
Annual growth: 30%
Total trade: 1 644 410
Annual growth: 25,9%

Year: 2005
Imports from South Africa: 1 257 237
Annual growth: 8%
Exports to South Africa: 641 620
Annual growth: 34%
Total trade: 1 898 857
Annual growth: 15,5%

Year: 2006
Imports from South Africa: 1 351 155
Annual growth: 7%
Exports to South Africa: 742 982
Annual growth: 16%
Total trade: 2 094 137
Annual growth: 10,3%

Year: 2007
Imports from South Africa: 1 484 564
Annual growth: 9%
Exports to South Africa: 807 804
Annual growth: 4%
Total Trade: 2 292 378
Annual Growth: 9%

Year: 2008 (January to October)
Imports from South Africa: 1 347 240
Exports to South Africa: 569 357
Total trade: 1 916 597

Source: Spanish Ministry of Industry, Trade and Tourism Investment

Spanish outward investment to South Africa (million euros)

January to September
2003: 19,1
2004: 27,98
2005: 109
2006: 3,3
2007: 62
2008: 0,10

Source: Spanish Ministry of Trade, Industry and Tourism

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 Foreign Direct
Investment (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 million); manufacturing of non-metallic
minerals (€119 million), automotives (€26 million), wood and cork (€26
million), construction (€15 million) and chemicals (€4 million).

Spanish companies such as Aviation Co-Ordination Services (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 specialises 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.

Enquiries:
Ronnie Mamoepa
Cell: 082 990 4853

Issued by: Department of Foreign Affairs
15 February 2009
Source: SAPA