[Federal Register Volume 76, Number 53 (Friday, March 18, 2011)]
[Notices]
[Pages 14920-14922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-5993]


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DEPARTMENT OF COMMERCE

International Trade Administration


Trade Mission to South Africa

AGENCY: International Trade Administration, Department of Commerce.

ACTION: Notice.

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Mission Description

    The United States Department of Commerce, International Trade 
Administration, U.S. and Foreign Commercial Service is organizing a 
Trade Mission to South Africa September 19-23, 2011, to help U.S. firms 
find business partners and help export equipment and services in 
Johannesburg and Cape Town, South Africa.
    Targeted sectors are:
     Sustainable and Efficient Energy Technologies, Equipment 
and Products.
     Electrical generating equipment.
     Renewable energy technologies.
     Clean coal technology.
     Transmission and distribution equipment and technology.
     Energy efficiency building technologies and products.
     Productivity Enhancing Agricultural Technologies and 
Equipment.
     Crop production equipment and machinery.
     Irrigation equipment and technology.
     Crop storage and handling.
     Precision farming technologies.
     Educational Services and Skills Development.
     Training and education services and systems.
     Educational and training franchises.
     Educational materials.
    Although focused on the sectors above, the mission also will 
consider participation from companies in other appropriate sectors as 
space permits.
    This mission will be led by a senior Department of Commerce 
Official and will include business-to-business matchmaking with local 
companies, market briefings, and meetings with key government 
officials.

Commercial Setting

    South Africa represents the largest economy and most sophisticated 
and diversified industrial and services sectors in Sub-Saharan Africa. 
Recent reports show the economy recovering well from the recent global 
recession. Projections are for economic growth in gross domestic 
product (GDP) to average five percent for the next decades as the 
country continues to develop. Sectors such as energy, health care, 
agriculture, vehicles, processed foods, and others are poised for solid 
growth in South Africa. The country also stands to benefit from rapid 
growth anticipated in many of its Sub-Saharan African trading partners, 
where South African-based companies have strong market prospects. In 
2009, total U.S.-South Africa trade was $10.3 billion, a significant 
decrease from 2008 levels of $16.4 billion. However, 2010 trade figures 
for January to September show growth in trade of over 40 percent above 
corresponding 2009 levels and indicate a strong recovery in U.S. 
exports to the country. Leading U.S. exports are machinery, vehicles, 
aircraft, chemicals, IT equipment and services.

Best Prospects in Mission Targeted Sectors

Energy

    State-owned utility Eskom produces about 95 percent of the 
electricity used in South Africa and about 60 percent of the 
electricity generated on the African continent. Its operations 
incorporate power generation, transmission and distribution. Although 
Eskom has a total of 24 power stations in commission, with a total 
generating capacity of 42,011 MW, this has proved inadequate for the 
current electricity demand.
    Eskom is building additional power stations and power lines on a 
massive scale to meet rising electricity demand in South Africa. 
Eskom's capacity expansion budget is $56 billion (R385 billion) up to 
2013 and is expected to grow to more than R1 trillion ($144 billion) by 
2026. It plans to double capacity to 80,000 MW by 2026. Since 2005 
Eskom commissioned projects totaling an additional 4,454 MW and plans 
to deliver an additional 16,304 MW in power station capacity by 2017. 
This creates opportunities for U.S. firms to provide products, services 
and the latest clean coal technologies to the South African energy 
market.
    According to the South African Government, 30 percent of all new 
power generation will be the responsibility of independent power 
producers (IPPs). In response to South Africa's plans to limit its 
CO2 emissions to below 275 million tons by 2025, Eskom, 
still the single buyer of all privately produced generation capacity, 
is studying the integration of solar generation from the Northern Cape 
Province, including its own World Bank supported Concentrating Solar 
Power (CSP) project, into the grid. The focus is to connect the first 
1,000 MW, which could be introduced by 2016. Eskom is already rolling 
out plans for a 400-kV transmission system in the area.
    The country's power supply shortfall has accelerated the need to 
diversify Eskom's energy mix and its move towards alternative energy 
sources, including various forms of renewable energy. The South African 
Department of Energy (DoE) recently released the Integrated Resource 
Plan (IRP 2010) for public comment. The IRP calls for diversifying 
sources of power and will call for renewable energy sources to supply 
16 percent and nuclear sources to supply 14 percent of power by 2030. 
In addition, detailed work is currently under way to determine a range 
of near-term electricity demand-reduction options that could yield the 
equivalent of some 5,000 MW and help stabilize the South African system 
between now and 2016. Specific opportunities include renewable-energy 
generation, cogeneration, own generation, municipal generation and 
other independent power producer programs.
    As part of its financial restructuring and capital expansion 
program, Eskom has received authorization to increase electricity 
prices to consumers by an average of 25 percent per year for the next 
three years, and will seek additional increases for the following 
several years. The effect of steadily rising energy costs for industry 
and consumers will be to create market opportunities for a wide range 
of energy saving technologies ranging from energy efficient building 
products, lighting, heating and air conditioning, metering, and similar 
products and technologies.

Agricultural Equipment

    South Africa has by far the most modern, productive and diverse 
agricultural economy in Sub-Saharan Africa. It is a net exporter of 
agricultural and food products and is self sufficient in food products. 
South Africa offers U.S. exporters of agricultural equipment

[[Page 14921]]

and technology a wide range of opportunities. The country's annual 
agricultural equipment market is estimated at approximately US$919 
million. Tractor sales constitute 60 percent of the total agricultural 
equipment market followed by combine and baler sales. Five percent of 
all new agriculture equipment is being produced locally; 95 percent of 
all agriculture equipment and parts are being sourced from 
international markets, and at least 20 percent of new equipment and 
technologies are currently being sourced from the U.S. However, used 
equipment has limited market opportunities.
    Agriculture is a leading component of the South African economy, 
employing a million people, and agro-industrial activity amounts to 
about fifteen percent of GDP, with substantial growth potential. 
Although eighty percent of South Africa's land is used for agriculture 
only 15 percent of that is arable, with the rest used for pastoral and 
other purposes. South Africa's recent broad-based agriculture 
empowerment charter (AgriBEE) aims to boost land reforms and black 
ownership of farmland to 30 percent by 2014. With the implementation of 
AgriBEE creating new land owners from previously disadvantaged 
communities, mission participants will have an opportunity to explore 
new emerging market opportunities for equipment and technology.

Educational Materials and Services

    Many of South Africa's universities are world-class academic 
institutions, at the cutting edge of research in certain spheres such 
as mining and engineering. At about 5.3 percent of GDP and 20 percent 
of total state expenditure, South Africa has one of the highest rates 
of public investment in education in world terms. However, there are 
still huge imbalances in education in the country. The greatest 
challenges lie in the poorer, rural provinces like the Eastern Cape and 
KwaZulu-Natal. One of the country's greatest challenges is persistent 
unemployment as it grapples with the effects of a large unskilled labor 
force. For that reason, improving education and skills development are 
priorities for the government.
    There is potential for U.S. companies offering training programs 
that will address the serious shortage of skilled labor force in 
sectors such as hospitality, utilities, construction, and 
transportation. On the business skills area, there is a need for 
programs that offer job skills assessment systems which help employers 
select, hire, train and develop prospective employees. Other 
opportunities include ``learning centers'' franchises, focusing on 
after-school care and tuition, both for primary and secondary students/
learners, in the areas of arithmetic, math and science respectively. 
Franchising opportunities also exist for adult learning centers, given 
the large number of people with gaps in their formal education, in the 
area of languages, computer training, and general business skills.

Mission Goals

    The goal of the South Africa Trade Mission is to provide U.S. 
participants with first-hand market information, one-on-one meetings 
with business contacts, including potential agents, distributors and 
partners so they can position themselves to enter or expand their 
presence in the South African market. South Africa, with its well 
developed business and financial sector, its indigenous multinational 
enterprises, substantial foreign investment, and well developed 
infrastructure, is often seen as the point of access to develop markets 
throughout Sub-Saharan Africa. Subject to prior consultation and 
confirmations, mission participants will have the opportunity to 
explore contacts with local firms active in the region and will have 
the option of extending their stay for additional business development 
activities in South Africa or meetings in neighboring countries.

Mission Scenario

    The South Africa Mission will visit both Johannesburg and Cape 
Town, allowing participants to access the two largest markets and 
business centers in the country. In each city, participants will meet 
with new business contacts.

                           Proposed Timetable
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           Day of week                   Date              Activity
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Sunday..........................  Sept. 18..........  Arrive in
                                                       Johannesburg.
Monday..........................  Sept. 19,           Mission Meetings
                                   Johannesburg.       Officially Start.
                                                      Breakfast briefing
                                                       with U.S. Embassy
                                                       Staff.
                                                      One-on-one
                                                       business
                                                       appointments.
                                                      Evening business
                                                       reception.
Tuesday.........................  Sept. 20,           One-on-one
                                   Johannesburg.       business
                                                       appointments
                                                       continue.
Wednesday.......................  Sept. 21, Travel    Briefing by Cape
                                   to Cape Town.       Town Consulate
                                                       Staff.
                                                      One-on-one
                                                       business
                                                       meetings.
                                                      Evening business
                                                       reception.
Thursday........................  Sept. 22, Cape      One-on-one
                                   Town.               business
                                                       appointments
                                                       continue.
                                                      Mission Officially
                                                       Ends.
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    *Note: The final schedule and potential site visits will depend 
on the availability of local government and business officials, 
specific goals of mission participants, and air travel schedules.

Participation Requirements

    All applicants will be evaluated on their ability to meet certain 
conditions and best satisfy the selection criteria as outlined below. 
The mission is designed for a minimum of 15 and a maximum of 20 
companies to participate in the mission from the applicant pool. U.S. 
companies already doing business in the target markets as well as U.S. 
companies seeking to enter these markets for the first time are 
encouraged to apply.

Fees and Expenses

    After a company has been selected to participate on the mission, a 
participation fee to the U.S. Department of Commerce is required. The 
participation fee for one representative is $2,125 for a small or 
medium-sized enterprise (SME) \1\ and $2,565 for large firms. The fee 
for each additional firm representative (SME or large) is $450. 
Expenses for travel, lodging, some

[[Page 14922]]

meals, and incidentals will be the responsibility of each mission 
participant.
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    \1\ An SME is defined as a firm with 500 or fewer employees or 
that otherwise qualifies as a small business under SBA regulations. 
See http://www.sba.gov/contractingopportunities/owners/basics/whatismallbusiness/index.html. Parent companies, affiliates, and 
subsidiaries will be considered when determining business size. The 
dual pricing reflects the Commercial Service's user fee schedule 
that became effective May 1, 2008. See http://www.export.gov/newsletter/march2008/initiatives.html.
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Conditions for Participation

     An applicant must submit a completed and signed mission 
application and supplemental application materials, including adequate 
information on the company's products and/or services, primary market 
objectives, and goals for participation. If the U.S. Department of 
Commerce receives an incomplete application, the Department may reject 
the application, request additional information, or take the lack of 
information into account when evaluating the applications.
     Each applicant must also certify that the products and 
services it seeks to export through the mission are either produced in 
the United States, or, if not, marketed under the name of a U.S. firm 
and have at least 51 percent U.S. content of the value of the finished 
product or service.

Selection for Participation

     Suitability of the company's products or services to the 
mission goals.
     Applicant's potential for business in South Africa, 
including likelihood of exports resulting from the mission.
     Consistency of the applicant's goals and objectives with 
the stated scope of the mission.
    Additional factors, such as diversity of company size, type, 
location, and demographics, may also be considered during the selection 
process.
    Referrals from political organizations and any documents containing 
references to partisan political activities (including political 
contributions) will be removed from an applicant's submission and not 
considered during the selection process.

Selection Timeline

    Mission recruitment will be conducted in an open and public manner, 
including publication in the Federal Register, posting on the Commerce 
Department trade mission calendar--http://www.trade.gov/trade-missions/
--and other Internet Web sites, press releases to general and trade 
media, direct mail, broadcast fax, notices by industry trade 
associations and other multiplier groups, and publicity at industry 
meetings, symposia, conferences, and trade shows.
    Recruitment for the mission will begin immediately, and conclude at 
11:59 p.m. on July 18, 2011. Applications received after 11:59 p.m. on 
July 18, 2011, will be considered only if space and scheduling 
constraints permit.

Contacts

Teresa Yung, International Trade Specialist, Global Trade Programs, 
U.S. Commercial Service, Washington, DC 20230, Tel: 202-482-5496, Fax: 
202-482-9000, E-mail: [email protected].
Larry Farris, Senior Commercial Officer, U.S. Consulate, Johannesburg, 
South Africa, Tel: +55-11 290-3316, Fax: +55-11 884-0538, E-mail: 
[email protected].

Teresa Yung,
Global Trade Programs, Commercial Service Trade Missions Program.
[FR Doc. 2011-5993 Filed 3-17-11; 8:45 am]
BILLING CODE 3510-FP-P