South Africa Market Access

Import regulations and customs duties

Regulations
Import licenses are required for a certain number of products (refer to Schedule 1 of the Import Control Regulations Act). These licences are delivered by the following authorities (as per the nature of the product): Department of Agriculture, Department of Water Affairs, Department of Sea and Fisheries, Department of Trade and Industry, Energy affairs and Department of Health.

Some products are subject to specific controls (caution: the list given below is not exhaustive):
- A phytosanitary certificate is required for vegetables and related products. It is delivered by the ministry of Agriculture from the country of origin.
- A veterinarian certificate is required for the import of living animals and fresh, deep-frozen or canned meat.
- A certificate of disinfection is necessary for the import of woollen products, cotton, clothes,etc.
-A certificate of inspection by a recognised institute is required only for exporters who export for the first time in South Africa, it is not required when a good business relationship is established.
- A quality certificate may be asked for fruits and vegetables.

Regulations governing payments
The exchange controls do not usually create any problem for the exporters of third countries. The payment of the imported goods in RSA can not be made before goods are despatched.. An advance payment equivalent to one third of the factory price is authorised for capital goods. The South African exporters should get full payment of the goods sold within 6 months from the date of shipment of goods.

Distribution

The main zones of economic concentration are located in the main South African conglomerations: Johannesburg / Pretoria, Cape Town, Durban. In order to distribute one's production in South Africa, it is strongly recommended to use the services of a local agent, who can provide the exporting company with its own network along with the administration and business contacts. However, more than anywhere else, the choice is tough. Good agents are rare and therefore very much sought-after. The contract between the exporting company and the agent can take various forms: commission basis, importer - distributor, importer - retailer either general representative of one or several foreign companies). The commission of the agent can vary from 3 to 30 %, depending on the value and nature of the contract, the quality and reputation of the agent.

The Business to Consumer (B to C) market

The big South African consumer market splits in two parts: a market of 5 million white people with a high purchasing power, and a market of 30 million black people with a very limited purchasing power. The majority of the retail sale is carried out by shopping centres, groupments of small shops, big department stores (Stuttafords, Edgars, Woolworths), supermarkets (Checkers, Pick' n Pay) and hypermarkets (Hyperama and Makro). The traditional business remains developed, especially outside the conglomerations, but does not represent a big market share, as it is almost exclusively meant for poor population.

The Business to Business (B to B) market

The market of manufactured goods is very concentrated: it is common that, for the same sector, 2 or 3 companies share 80 % of the market. Generally, the introduction of new products in this market requires the intervention of one or several agent (s) - distributor (s). For manufactured goods (especially capital goods) the agent should be able to handle any technical matter on his own.

Transportation of goods

By road
The authority in charge of maintaining and developing the South African motorway infrastructure is the National Roads Agency. It manages 360,000 km of roads out of which 150,000 km are tarred. The trend is to involve more and more private operators, for instance, the highway N4 connecting Johannesburg to Maputo, is managed by the operator Bouygues via its Basil Read branch.

By rail
The railway network is 33 400 km long. The public company Spoornet represents more than 80 % of the South African railway infrastructure. The rail is particularly used in South Africa for goods transportation ; it is notably very well connected to the mining sector. Since 1998, a special cable ( Smart Cable) developed by Spoornet has enabled to link four locomotives (three electric and one diesel) and thus to create real rolling convoys (up to 216 cars). This technique is mainly used for the transportation of iron ore on the Sishen - Saldanha line, and makes it possible to transport up to 22,500 tons in one way.

By sea
There are 7 international ports in South Africa: the two main are Cape Town and Durban, then come Port Elisabeth and East London. In 1998, more than 120 million tons of freight and some 14,000 vessels transited in South African ports. The biggest part of the harbour activity in South Africa is managed and controlled by the public harbour authority Portnet and by their operations' management subsidiary: Portcon. Harbour facilities are modern and able to take care of all type of vessels and goods.

By air
The three international airports are Cape Town, Johannesburg and Durban. There are secondary airports such as Bloemfontein, East London, Kimberley, Port Elisabeth and Upington. Internal flights are mainly operated by South African Airways, the national company.

Standards

The South African Bureau of Standard (SABS) is the organisation in charge of normalisation and certification. They work in association with the international ISO and IEC institutes. It is strongly advised to contact the SABS in order to understand the necessary technical and qualifying rules for marketing a product in South Africa.

Patents and brands

The national organisation for the protection of trademarks and patents is the Department of Trade and Industry Companies and Intellectual Property Registration Office (CIPRO). South Africa signed the Agreement of Paris for the protection of industrial property, as well as the agreement establishing the World Intellectual property Organization ( WIPO).