Mission Statement; 2010 Executive-Led Trade Mission to Senegal and South Africa; March 7-12, 2010

AGENCY:

Department of Commerce.

ACTION:

Notice.

I. Mission Description

The United States Department of Commerce, International Trade Administration, U.S. and Foreign Commercial Service is organizing a Trade Mission to Dakar, Senegal and Johannesburg, South Africa, March 7-12, 2010. Both of these cities serve as major gateways to other country markets on the African continent, Senegal being the main portal for French-speaking West Africa, and South Africa as the starting point for doing business in southern Africa. This mission will be comprised of U.S. firms from a cross section of industries with market potential, including, but not limited to, products, services, and technologies in the following sectors: Electric power systems, automotive spare parts, construction and mining equipment, and agribusiness. Businesses with clean technologies in those and other sectors are also encouraged to apply.

The goal of the mission will be to help U.S. companies launch or increase their export business in the Senegalese and South African markets. Participating firms will gain market information, make business and government contacts, solidify exporting strategies, and advance specific projects, towards the outcome of increasing U.S. exports. The mission, to be led by an executive level U.S. Department of Commerce official, will include business-to-business matchmaking appointments with local companies, networking events, and meetings and briefings with government and industry officials. The mission delegation will be comprised of U.S. firms that design, manufacture, supply, and/or integrate products, services, and technologies in the target industries.

II. Commercial Setting

Senegal

Senegal is a secular republic with a strong presidency, bi-cameral legislature, multiple political parties, and historically peaceful transfers of power. Senegal plays a significant role in regional and international affairs, and President Wade has made excellent relations with the United States a high priority. His administration has advanced a liberal economic agenda, including privatizations and other market-opening measures. To support ever growing international trade, Senegal has well-developed port facilities, an international airport that serves as a regional hub for more than 28 airlines, and a serviceable telecommunications infrastructure, including a fiber optics backbone and cellular phone penetration approaching 15% of the population.

The Senegalese are generally well disposed towards Americans, and actively seek U.S. trade and investment. The country's geographic location and its market forces present U.S. companies with significant business opportunities. As of 2008, U.S. foreign direct investment stock in Senegal totaled $18 million. Total bilateral trade in 2008 reached $155 million, with the United States exporting $137 million in goods and services and importing $18.7 million in goods and services from Senegal. A driving force for the growth of this international trade is Senegal's expanding group of higher-income consumers of upscale consumer-ready products. Robust population growth (at 2.6 percent annually) and urbanization stand to bolster such consumer patterns in the long term. The African Development Bank (AfDB) and the World Bank are actively financing public infrastructure projects in Senegal. The AfDB is currently putting a great emphasis on private sector financing; the International Finance Corporation, the private sector-lending arm of the World Bank, has recently financed major infrastructure projects in Senegal. The West African Development Bank and the Islamic Development Bank are also very active lenders in Senegal. The U.S. Trade and Development Agency (USTDA) has financed several studies in Senegal in recent years. In carrying out its mission, USTDA emphasizes economic sectors that are most likely to benefit from U.S. exports of goods and services. Additionally, the U.S. Government's Millennium Challenge Corporation (MCC), created to provide financial aid to qualifying countries towards the goal of sustainable development, recently signed a $540 million compact grant with Senegal. The grant and soon-to-be announced public tenders will be directed to national road rehabilitation, irrigation, and water resources management projects. The MCC proposed Irrigation and Water Resources Management Project, comprising infrastructure investments in the Senegal River Delta and Podor areas, is designed to improve the productivity of the agricultural sector by extending and improving the quality of the irrigation system in certain agriculture-dependent areas of northern Senegal. It also seeks to provide additional supply of water for human and animal use there.

In the power sector, projects for rural electrification, the rehabilitation and replacement of antiquated plants, and the construction of improved transmission and distribution lines will lead to opportunities for U.S. companies. Senegal's growing reliance on crude oil as a power source is of concern to the country because of its cost and price volatility. The search for cheaper alternatives such as coal should lead to the pursuit of more attractive energy resources, and more opportunities for U.S. companies. While coal is a less expensive option, Senegal is also exploring possibilities to become a major biofuel supplier, as well as pursuing other alternative energy schemes, including wind turbine installations and small-scale, decentralized photovoltaic panel systems. Hydroelectricity is also being considered as an alternative to diesel power for Senegal. The Gambia River Basin Development Organization is embarking on a project to construct two hydroelectric power plants along with an interconnection of the power grids to confront persistent power shortage problems and the heavy dependence on imported petroleum products for the production of electricity.

Good prospects for U.S. automotive spare parts suppliers stem from the need to support the increasing number of U.S.-origin cars, second-hand vehicles, automotive accessories, and car servicing franchises in Senegal. The market for imported automobiles, spare parts, and accessories has climbed to $10.4 million during the period of January-July 2009, an increase of 28% from the $8.1 million in automotive imports during that same period in 2008.

In the construction sector, the Millennium Challenge Corporation compact grant creates opportunities for U.S. companies to participate in the Roads Rehabilitation Project (RN2/RN6). The Roads Rehabilitation Project seeks to expand access to markets and services and reduce transportation time and costs by improving the condition of certain strategic roads. The Government of Senegal has prioritized these roads in its Road Sector Master Plan, and their rehabilitation is in line with the national policy of increasing growth through road creation, renovation, and maintenance. The RN2 serves as the primary road to transport and export products from irrigation areas along the Senegal River, thereby complementing the Compact's Irrigation and Water Resources Management Project. The RN2 is also a strategic road, connecting Dakar harbor to Mauritania and Mali, and to southern cities in Senegal. The RN6 is the only road available to transport local agricultural products from Casamance to the rest of Senegal. Strategic as well, it connects Senegal with Guinea Bissau, Guinea-Conakry, and Mali. The improvement of both roads is expected to stimulate domestic and trans-border traffic and commerce.

Senegal's planned Arcelor Mittal (Faleme) iron ore project is expected to provide the best prospects for U.S. companies working in the mining sector. The implementation of this anticipated effort, awaiting the stabilization of the economy, should yield opportunities in mining operations, rail rehabilitation and construction, port development, and engineering and project management. Sales opportunities should also develop for materials handling equipment such as trucks, loaders and dozers. A recent study commissioned by the U.S. Trade and Development Agency estimated U.S. export potential for this project, including services and equipment at $170 million.

Globally rising food and commodity costs, supplier shortages, and the devaluation of the dollar have increased Africa's interest in U.S. farm equipment, agribusiness technologies, products, and services. Local entrepreneurs recognize that these products and services are needed to support Senegal's modernization of the agricultural production and processing sectors to meet an increasing share of its domestic food needs. Given the high percentage of Senegal's population engaged in agriculture and agricultural processing, coupled with renewed focus on investment and development of the sector, opportunities exist for U.S. companies to supply the full range of farm inputs, new and used agricultural farm equipment, tractors and trucks, irrigation equipment, as well as food processing, transportation and food storage equipment and facilities.

South Africa

Enjoying macroeconomic stability and a pro-business environment, South Africa is a logical and attractive choice for U.S. companies to enter southern Africa. The mature nature of the South African economy—the most advanced, broad-based, and productive in Sub-Saharan Africa—can be seen in its wide variety of economic sectors and national retail consumption patterns, which range from basic needs (e.g., condensed milk) to high-end durable consumer goods (e.g., SUV's). The growth of the country's consumer base and its efforts to upgrade and develop its infrastructure to match and further fuel its economic growth translates into opportunities for U.S. exporters and investors in South Africa. U.S. exports there have shown a steady growth over a period of years, rising to 18 percent in 2008, with a an estimated 25 percent decrease in the first half of 2009 due to the world economic crisis. However, the South African Rand is strengthening against the dollar, which will make dollar-denominated products more affordable for South Africans in the near term leading to an upturn in U.S. exports.

Other factors benefiting U.S. exporters include a sophisticated and well-capitalized banking sector, the country's position as the gateway to southern Africa, ongoing growth in market share for U.S. branded goods, and over $50 billion in formalized planned infrastructure expenditures by government-owned utilities and public-private partnerships over the next five years. In addition, the awarding to South Africa of the 2010 FIFA World Cup Soccer championship has resulted in an estimated $2 billion in projects. These projects involve tenders for supply-chain products and services, potentially for bid by interested U.S. companies. The mandate of the country's five development finance institutions, and the commitment of the U.S. Trade and Development Agency and the Agency for International Development to accelerate sustainable socio-economic development in the region by funding physical, social and economic infrastructure in South Africa, will also contribute to opportunities for U.S. companies there.

In the power sector, up to $47 billion is expected to be spent on new infrastructure for generation, transmission and distribution projects over the next five years. South Africa is going ahead with one of the most technologically advanced capital investment projects, the $2.27-billion Pebble Bed Modular Reactor program, identified as the first commercial-scale high-temperature reactor in the world. If this project proves successful, another 10 plants could be built. Independent power producers are also going to work with South Africa's Eskom to increase the new power capacity now required for South Africa. Additional power stations and major power lines are being built on a massive scale to meet rising electricity demand. U.S. companies are encouraged to leverage the need for supplies in conjunction with the upcoming restructuring of the electricity distribution industry into six regional electricity distributors. In addition to nuclear power, an alternative receiving much support from the South African Government, the power-generating infrastructure mix likely to respond to this increased demand includes wind and solar thermal energy, two of the most accessible and growing sectors in the country. There is also considerable potential for non-grid renewable power applications, which can be used to ensure access to power in remote rural areas.

In the automotive sector, the large number of model derivatives imported by South Africa has widespread implications for the aftermarket, representing opportunities for U.S. companies. There is also a lack of telematic components, essential for inflating airbags, facilitation of security and control of tracking devices, and for control of engine/transmission functions. Predictions of significant growth in the proportion of new cars featuring automotive telematics, and the current unavailability of this technology in South Africa pose yet another export opportunity for U.S. exporters.

There has been a rapid growth in demand for automotive specialty equipment and accessories in South Africa. This growth can be attributed to the higher disposable income within specific segments of the South African population. Since 2001 the activity of accessorizing and improving performance of vehicles has been transformed from a hobby to a fully-fledged culture of fierce competition. In the race to individualize and distinguish their vehicles, enthusiasts constantly seek innovative, authentic specialty components with little regard to price. In this lucrative aftermarket sector, South Africans often follow trends set in the United States and are highly receptive to U.S. brands.

Looking at the construction sector, 489 national roads and related projects will be in the pipeline over the medium term. Based on projections of future demand for housing construction in South Africa, 625,324 more 40-square-meter housing units will be needed annually between 2010 and 2016 to eliminate existing housing backlogs. The most significant capital equipment requirements for South Africa will be for tractor loader-backhoes and excavators; the need for 20-ton trucks also is projected to increase 3.7 times in 2010.

The notion of green building is gathering momentum in South Africa, with an array of projects currently in the pipeline due partially to increases in resource prices. These price increases are turning green building into an increasingly feasible option because of issues of longevity, efficiency, and the reduction of operation costs in the long run. In addition, with South Africa struggling with a power crisis and local authorities experiencing hardships pertaining to issues of water, sewerage and solid waste disposal, the government and the private sector are becoming increasingly conscious of the need for environment-friendly building practices. While the South African government recognizes the need for energy efficient buildings and building practices, it is the private sector that is set to lead this revolution. Green building technologies and practices from developed countries such as the United States are sought after in achieving South Africa's objective of creating a green and sustainable building culture.

The mining industry has traditionally been responsible for significant infrastructure development in South Africa. For example, 2,200 miles of railway line, three new ports, and a large amount of bulk handling infrastructure at existing ports are high on the agenda for both the South African government and the mining consortia. Increasing the efficiency of materials handling systems is also critical to exporters of ores and minerals. Significant infrastructure investments are planned for the Saldanha Bay iron and steel ore bulk export hub. Some other planned projects are the creation of a dedicated rail line for the export of manganese from the Northern Cape to the Coega Port, the building of a chorine plant, as well as an aluminum/steel smelter; a planned 65-mile slurry pipeline to the Majuba coal station, as well as a bulk coal handling system from the Waterberg coalfields for the Groot Geluk power station, and enhanced bulk material handling systems for coal at the port of Richards Bay.

The agribusiness sector in South Africa has many opportunities for U.S. exporters. The short-term market for agricultural machinery is very good. Farmers appear to be optimistic about current agricultural conditions, clearly evidenced by the latest tractor, combine, and baler sales statistics. Sporadic rains and prevalent dry weather conditions are still concerns and present excellent opportunities for no-till planting equipment. Domestic companies and local farmers have also indicated a strong interest in soil sampling equipment. With the continued downscaling of the large-scale workforce, excellent opportunities are being presented for high-end navigational tractors and precision farming equipment. Most of the precision agriculture equipment, such as planters and combine harvesters, is primarily imported from the United States, and smaller implements are purchased locally. Known U.S. brands like McCormick, John Deere, and New Holland are well entrenched in this market. The regional expansion of markets throughout southern Africa presents additional opportunities for U.S. businesses.

III. Mission Goals

The goal of this trade mission is to facilitate greater access to the Senegalese and South African markets by providing participants with first-hand market information, access to government decision makers, and one-on-one appointments with business contacts, including potential agents, distributors, and partners. The mission program is anticipated to include meetings in Dakar with regionally posted U.S. economic officers and trade specialists to enhance the prospect of regional opportunities.

IV. Mission Scenario

The trade mission will include two stops: Dakar, Senegal; and Johannesburg, South Africa. In each city, participants will meet with new business/government contacts. Additional business meetings in other African countries can be arranged before or after the mission through the Gold Key Service for an added cost of $700 per city (exclusive of interpreter and transportation costs).

V. Mission Timetable

Dakar

Sunday, March 7, 2010: Evening market briefing; No-host dinner with location TBD.

Monday, March 8, 2010: U.S. trade mission participant briefings/meetings with Senegalese and regional government and industry officials; One-on-one business appointments; Networking reception.

Tuesday, March 9, 2010: U.S. Embassy briefings and meetings; One-on-one business appointments; No-host dinner with location TBD.

Wednesday, March 10, 2010: Morning departure to Johannesburg.

Johannesburg

Wednesday, March 10, 2010: Market briefing.

Thursday, March 11, 2010: Meetings with government and industry officials; One-on-one business appointments; Evening networking reception.

Friday, March 12, 2010: One-on-one business appointments.

Mission concludes Friday afternoon. Participants may return to United States or continue on for additional appointments arranged separately under the Gold Key Service.

VI. Participation Requirements

All parties interested in participating in the Executive-led Trade Mission to Senegal and South Africa must complete and submit an application package for consideration by the Department of Commerce. All applicants will be evaluated on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. A minimum of 5 and maximum of 15 companies will be selected to participate in the mission from the applicant pool. U.S. companies already doing business with Senegal and South Africa as well as U.S. companies seeking to enter these markets for the first time may apply.

Fees and Expenses

After a company has been selected to participate in the mission, a payment to the Department of Commerce in the form of a participation fee is required. The participation fee for an individual company representative will be $5,200 for large firms and $3,500 for small or medium-sized enterprises (SMEs). The fee for each additional firm representative (large firm or SME) is $650. Expenses for travel, lodging, most meals, and incidentals will be the responsibility of each mission participant. The option to participate in the mission is also being offered to U.S.-based firms with an established presence in Senegal and/or South Africa, or neighboring countries; the same fee structure applies for these firms.

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 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 Criteria for Participation

Selection will be based on the following criteria:

• Suitability of the company's products or services to the Senegalese and South African markets.
• Applicant's potential for business in Senegal and 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.
• Past or current export activity or ability to initiate and sustain immediate export activities.

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.

VII. Timeframe for Recruitment and Applications

Mission recruitment will be conducted in an open and public manner. Outreach will include posting on the Commerce Department trade mission calendar ( http://www.ita.doc.gov/doctm/tmcal.html ) 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. The International Trade Administration will explore and welcome outreach assistance from other interested organizations, including other U.S. Government agencies.

Recruitment for the mission will begin immediately and conclude January 15, 2010. Applications will be available online on the mission Web site at http://www.export.gov/2010Africamission. They can also be obtained by contacting the Mission Contacts listed below. Applications received after January 15, 2010, will be considered only if space and scheduling constraints permit.

VIII. Contacts

Karen Dubin, Senior International Trade Specialist, U.S. Commercial Service/Washington, DC, Tel: 202-482-3786; Fax: 202-482-7801, e-mail: Karen.Dubin@mail.doc.gov.

Steven Morrison, Senior Commercial Officer, U.S. Commercial Service/Dakar, Tel: 221-33-823-4296, x3202, Fax: 221-33-822-1371, e-mail: Steve.Morrison@mail.doc.gov.

John Howell, Commercial Officer, U.S. Commercial Service/Johannesburg, Tel: 27-11-290-3062/Fax: 27-11-884-0253, e-mail: John.Howell@mail.doc.gov.