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South Africa and the Wine Industry: A Sustainable Investment

An analysis of the viability of creating and U.S based wine business i...
by

Tanisha Jackson

on 7 March 2013

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Transcript of South Africa and the Wine Industry: A Sustainable Investment

South Africa and the Wine Industry -The sector’s contribution to overall GDP stood at 61% in the first quarter of 2012 South Africa Economic Analysis Consumption expenditure will remain a driver of growth.
The consumers financial situation stays under strain as real wage increases are expected to be lower than 2011.
Whether employment will increase remains a concern.
Over the long term, growth in household consumption is expected to revert to levels of around 5.0% per year, in line with employment growth of about 2.0-2.5% per year and productivity-related real wage increases of around 2.5% per year. The largest contribution were the manufacturing industry; finance, real estate and business services; the wholesale, retail, motor trade, catering and accommodation industry; and general government services. The Growth Slows Consumption expenditure to remain primary growth driver over short term.
Capacity generating investment spending is expected to add considerably to the future growth.
Consumption spending, with its share of over 60% of the economy, is crucial to sustain recovery. Consumption to Remain Growth Driver The government reprioritizes spending
Expand the infrastructure capacity in the country to underscore growth and thereby create more employment.
845 billion South Americans rand (ZAR) (USD109.79 billion) is allocated toward infrastructure plans over the next three years.
Growth is expected to stay below trend in 2012 and 2013 as export growth is constrained by weak global demand and a volatile currency. Government Spending Growth Cape Town 3,433,441
Durban 3,120,282
Johannesburg 2,026,469
Soweto 1,695,047
Pretoria 1,619,438
Port Elizabeth 967,677
Pietermaritzburg 750,845
Benoni 605,344
Tembisa 511,655
East London 478,676 Population Distribution A Country of Great Diversity.
- Over 50 million people living in 9 provinces.
Black 79% White 9% Coloured 9% Indian/Asian 3%
Many practiced religions. South Africa Social Analysis Real GDE growth slowed to 4.3% in the first quarter of 2012 for 5.1% growth recorded in the fourth quarter of 2011.
All spending categories showed a slowdown. Domestic Expenditure (GDE) The secondary sector is boosted by manufacturing.
Strong growth in manufacturing production in the first and second months of 2012 boosted the manufacturing sector’s.
The sector saw growth of 7.7% in the first quarter of 2012, following growth of 4.2% in the last quarter of 2011.
This sector is expected to still see growth in 2012 Mining keeps the primary sector in recession.
The primary sector saw its fifth consecutive contraction in growth in the first quarter of 2012.
After four quarters of contraction, the agriculture sector posted positive growth of the 3.4% in the first quarter of 2012
The out look on this sector remains uncertain. The Different Sectors A human rights leader in Africa;
Democratic elections
Independent Judiciary
Pro Human Rights Constitution
Strong Emerging Economy
Social Concerns and Challenges;
Some issues of race relations remain, 18 years after Apartheid
Freedom of the Press and Media
Violence targeting refugees and migrant workers
Violence targeting lesbian, gay and gender nonconforming citizens
High rates of poverty
High rates of HIV/AIDS World Report 2011
Human Rights Watch Import demand is boosted by infrastructural requirements in the economy.
Export Growth is expected to be constrained by the infrastructural impediments in the economy and slow global demand. Import Demand Cape Town 3,433,441
Durban 3,120,282
Johannesburg 2,026,469
Soweto 1,695,047
Pretoria 1,619,438
Port Elizabeth 967,677
Pietermaritzburg 750,845
Benoni 605,344
Tembisa 511,655
East London 478,676 Population Distribution A human rights leader in Africa;
Democratic elections
Independent Judiciary
Pro Human Rights Constitution
Strong Emerging Economy
Social Concerns and Challenges;
Some issues of race relations remain, 18 years after Apartheid
Freedom of the Press and Media
Violence targeting refugees and migrant workers
Violence targeting lesbian, gay and gender nonconforming citizens
High rates of poverty
High rates of HIV/AIDS World Report 2011
Human Rights Watch South Africa Economic Analysis The government reprioritizes spending
Expand the infrastructure capacity in the country to underscore growth and thereby create more employment.
845 billion South Americans rand (ZAR) (USD109.79 billion) is allocated toward infrastructure plans over the next three years.
Growth is expected to stay below trend in 2012 and 2013 as export growth is constrained by weak global demand and a volatile currency. Government Spending Growth Consumption expenditure to remain primary growth driver over short term.
Capacity generating investment spending is expected to add considerably to the future growth.
Consumption spending, with its share of over 60% of the economy, is crucial to sustain recovery. Consumption to Remain Growth Driver Import demand is boosted by infrastructural requirements in the economy.
Export Growth is expected to be constrained by the infrastructural impediments in the economy and slow global demand. Import Demand The largest contribution were the manufacturing industry; finance, real estate and business services; the wholesale, retail, motor trade, catering and accommodation industry; and general government services. The Growth Slows The secondary sector is boosted by manufacturing.
Strong growth in manufacturing production in the first and second months of 2012 boosted the manufacturing sector’s.
The sector saw growth of 7.7% in the first quarter of 2012, following growth of 4.2% in the last quarter of 2011.
This sector is expected to still see growth in 2012 Mining keeps the primary sector in recession.
The primary sector saw its fifth consecutive contraction in growth in the first quarter of 2012.
After four quarters of contraction, the agriculture sector posted positive growth of the 3.4% in the first quarter of 2012
The out look on this sector remains uncertain. The Different Sectors -The sector’s contribution to overall GDP stood at 61% in the first quarter of 2012 -The sector’s contribution to overall GDP stood at 61% in the first quarter of 2012 Real GDE growth slowed to 4.3% in the first quarter of 2012 for 5.1% growth recorded in the fourth quarter of 2011.
All spending categories showed a slowdown. Domestic Expenditure (GDE) Consumption expenditure will remain a driver of growth.
The consumers financial situation stays under strain as real wage increases are expected to be lower than 2011.
Whether employment will increase remains a concern.
Over the long term, growth in household consumption is expected to revert to levels of around 5.0% per year, in line with employment growth of about 2.0-2.5% per year and productivity-related real wage increases of around 2.5% per year. A Country of Great Diversity.
- Over 50 million people living in 9 provinces.
Black 79%
White 9%
Coloured 9%
Indian/Asian 3%
Many practiced religions. South Africa Social Analysis Population Distribution A human rights leader in Africa;
Democratic elections
Independent Judiciary
Pro Human Rights Constitution
Strong Emerging Economy
Social Concerns and Challenges;
Some issues of race relations remain, 18 years after Apartheid
Freedom of the Press and Media
Violence targeting refugees and migrant workers
Violence targeting lesbian, gay and gender nonconforming citizens
High rates of poverty
High rates of HIV/AIDS World Report 2011
Human Rights Watch South Africa Economic Analysis The government re-prioritizes spending
Expand the infrastructure capacity in the country to underscore growth and thereby create more employment.
845 billion South Americans rand (ZAR) (USD109.79 billion) is allocated toward infrastructure plans over the next three years.
Growth is expected to stay below trend in 2012 and 2013 as export growth is constrained by weak global demand and a volatile currency. Government Spending Growth Consumption expenditure to remain primary growth driver over short term.

Capacity generating investment spending is expected to add considerably to the future growth.

Consumption spending, with its share of over 60% of the economy, is crucial to sustain recovery. Consumption to Remain Growth Driver The government reprioritizes spending
Expand the infrastructure capacity in the country to underscore growth and thereby create more employment.
845 billion South Americans rand (ZAR) (USD109.79 billion) is allocated toward infrastructure plans over the next three years.
Growth is expected to stay below trend in 2012 and 2013 as export growth is constrained by weak global demand and a volatile currency. Government Spending Growth Consumption expenditure to remain primary growth driver over short term. Consumption to Remain Growth Driver Import demand is boosted by infrastructural requirements in the economy.
Export Growth is expected to be constrained by the infrastructural impediments in the economy and slow global demand. Import Demand Real GDE growth slowed to 4.3% in the first quarter of 2012 for 5.1% growth recorded in the fourth quarter of 2011.
All spending categories showed a slowdown. Domestic Expenditure (GDE) -The sector’s contribution to overall GDP stood at 61% with a growing at an annualized 2.7% in the first quarter of 2012

- Consuming spending is expected to grow

- Strong growth in manufacturing industry; finance, real estate, and business services

- Public corporation investment accelerated from 9.6% to 13.1% Real GDE growth slowed to 4.3% in the first quarter of 2012 for 5.1% growth recorded in the fourth quarter of 2011.
All spending categories showed a slowdown. Domestic Expenditure (GDE) Consumption spending, with its share of over 60% of the economy, is crucial to sustain recovery. Capacity generating investment spending is expected to add considerably to the future growth. Sustainable growth is expected to follow the focus on infrastructural investment South Africa's Political Structure The Preamble of the Constitution states that it is a document that aims to:

Heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights

Improve the quality of life of all its citizens and free the potential of each person

Lay the foundations for a democratic and open society in which government is based on the will of the people and every citizen is equally protected by law

Build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations The Executive Office President Jacob Zuma The Parliament is the legislative authority in South Africa and in accordance to the current constitution; its members create laws for the country The Legislature Office The Judiciary System There are four levels of courts:

The magistrates' courts - misdemeanor criminal cases

The High Courts - cases in specific jurisdictions

Supreme Court - the highest court in the land
Constitutional Court - constitutional cases South Africa has nine provinces

each have their own legislature of 30 to 80 people

Each province has a constitution

Provincial legislature is influential in business practices. The South African Local Government (SALGA) formally recognized by the National constitution

represents the different categories of S.A. municipalities

works with organized local government and traditional leadership, concerning issue such as labor unions and social-economic inequities The Provincial Government African National Congress This is the leading governing political party in South Africa with 65.9% of the vote

It has been the ruling party of post-apartheid South African on the national level since 1994

Defines itself as "a disciplined force of the left" and
"The Spear of the Nation"

It's most famous political leader is Nelson Mandela Nelson Mandela The first democratically elected president of South Africa (1994-1999)

He served as a militant anti-apartheid activist and the leader and co-founder of the armed wing of the ANC Source: Historical data from selected national and international data sources. All forecasts provided by IHS Global Insight. Table updated on the 15th of each month from monthly forecast update bank (GIIF). Written analysis may include references to data made available after the release of the GIIF bank. Economic Growth Indicators Geographic location Cape Town 3,433,441
Durban 3,120,282
Johannesburg 2,026,469
Soweto 1,695,047
Pretoria 1,619,438
Port Elizabeth 967,677
Pietermaritzburg 750,845
Benoni 605,344
Tembisa 511,655
East London 478,676 US Companies' Challenges
in South Africa Labor Economics Produced 831.2 million liters of wine in 2011, 54% exported
Number 8 in world volume production
275,000 jobs associated with the wine industry
Wine labor not without controversy South Africa Nathan R. Cherry
Ahmed Elgabbas
Tanisha Jackson, PhD
Jeff Witt
Full transcript