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A Swiss network in the heart of SA

Business Day, Johannesburg

A Swiss Network in the Heart of SA


By Paul Schamberger, Johannesburg

4 June 2007

Africa is growing in importance in the global trade context, writes Paul Schamberger

The latest in a series of local networking and consulting organisations, set up by Switzerland’s official export promotion agency, has been opened in Pretoria.

The Swiss Business Hub SA was opened in Pretoria last month during an official visit by Swiss Federal Councillor and Economic Affairs Minister Doris Leuthard. This is the latest of 15 such local networking and consulting organisations in the world which the privately owned company, the Zurich-based Swiss Office for Trade Promotion (Osec), has established in recent years.

Osec is Switzerland’s official export promotion agency.

It is an information, networking and consulting organisation and has a government mandate to promote foreign trade and outward investments among Swiss companies, particularly small and medium-sized ones.

It does so by operating Swiss Business Hubs in "priority countries", ranging from next-door Austria to China. It also provides a range of parallel and complementary services to local companies that wish to establish contacts and links with companies in Switzerland.

In her speech Leuthard said the Pretoria hub was an important partner in the trade network between SA and Switzerland and it would liaise closely with a new Gauteng chapter of Swisscham, the Association of Swiss Foreign Trade chambers.

The local chapter would cover the whole of southern Africa.

Erwin Luethi, councillor for trade at the Swiss embassy in Pretoria, has been appointed director of the hub.

Leuthard emphasised the growing importance of Africa in the global context and said that African economies were growing faster than the world’s average gross domestic product and that this trend was set to continue.

Switzerland was keen to co-operate with SA in the fight against poverty, discrimination, disease and criminality, she said, while helping to promote investments in infrastructure and especially in education.

"Only a strategy of economic growth allows a country to fight against poverty and discrimination, and it also means having the funds for infrastructure development, education and social security."

It was Switzerland’s own success as a democracy, its emphasis on human rights and its open market economy that had made it such a successful country, she said.

Leuthard also referred to the free trade agreement between the European Free Trade Association (Efta) and the countries of the Southern African Customs Union (Sacu) and said once this was in operation it would help boost Swiss-SA trade and investment relations. "We want to co-operate with SA as it is a major role player in Africa," she said.

Osec CEO Daniel Kueng said SA was Switzerland’s most important trading partner in Africa.

"We have a trade volume of about Sfr2bn. Switzerland exports more than $600m to SA every year, with an incredibly rising tendency. In the first three months of this year alone our exports increased 24%," he said.

Kueng said apart from the Efta-Sacu agreement, which liberalises trading conditions for industrial goods in particular, the 2010 Soccer World Cup event was an important booster of bilateral trade. "Recently, when we organised an event at home to tell interested companies about the soccer, 110 companies turned up," he said.

A Country Consulting Day on SA was held in December and Osec flew a group of South African businessmen to Switzerland, where its members were able to make contact with more than 35 Swiss companies.

The new Swiss Hub SA would also be proactive in keeping Swiss companies informed of the South African government’s huge spending on infrastructure and the business and investment opportunities that would flow from it. "For example, if a new railway line were to be announced, we would mobilise our Swiss railway industry to see if they would be interested in getting involved," he said.

"Besides all that, SA has shown a 5% growth rate in the medium to long term, and that’s substantial."

Swiss companies had found that by going abroad, either through trade or foreign direct investment, tended to boost Swiss productivity. "We find that we have to compete with third countries . We feel their hot breath on our necks, and we know we have to run very fast," Kueng said. Swiss companies that did not export soon found that they were lagging behind competitors.

All of Switzerland’s major exports, about 80% of which are chemical and pharmaceutical products as well as machinery and precision instruments, had grown "very substantially" over the past year, he said, and the export industry was increasing 11%-12% each year.

Kueng said about 30% of Swiss exports to SA comprised electronic and nonelectronic machinery, followed by pharmaceutical products (20%) and medical and optical devices (10%). "However, the South African share of our exports worldwide lies somewhere between 0,4% and 0,5%, so there is a lot more we can do," he said.

"As of today SA will be on the radar screen of our small and medium-sized companies. However, we cannot force them to either export to SA or to invest here. But I am sure that if your country goes on showing the development it has shown over the past years, then our Swiss companies will make use of the information they get about SA in a very positive way," Kueng said.

Among the services Business Hub SA would offer to South African companies were trade and business information on possible partner companies, products, trade fairs, how to become a distributor of Swiss products in SA or how to become a representative of a Swiss company, and even how to channel South African investment into Switzerland. Common ventures could be arranged through the new Swisscham chapter in Gauteng.

Swiss companies own about $1,5bn in capital stock in SA, and in the past year alone this has increased by $800m through Swiss direct investment.

Switzerland is SA’s fifth most important investor, and about 30000 South Africans are employed by Swiss companies.