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Hendricks: Bongolethu Tourism Project (11/03/2003)

11th March 2003


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Date: 11/03/2003
Source: Ministry of Trade and Industry
Title: Hendricks: Bongolethu Tourism Project


Deputy Minister Mabudafhasi,
MEC Gelderblom,
Mayor Lambrecht,
Honoured guests,
Ladies and Gentlemen.

I am pleased to be here in Bongolethu today. Yesterday and today I have had the opportunity to see some of the excellent crafts that are produced in this community and I have heard about the products that you are starting to export. This is very encouraging if one considers where we come from.

Ladies and gentlemen, the effects of apartheid are still with us, there are still many people who live in poverty and who are struggling to put food on their family's table. As the government we are forever mindful of this and are working very hard to overcome the inequalities that we inherited from the apartheid regime. We have implemented many poverty reduction programmes, housing programmes, increased the old age pension grants and introduced the childcare grants. We have also found ways to offer support to people so that they can establish their own businesses and are therefore in a position to support themselves without relying on the government. If these people are successful they will create wealth and opportunities for other people.

It is important that the people of South Africa find the opportunities that are out there, for example by exporting crafts to other countries and selling their crafts to the tourists who visit their area. There are many business opportunities and I see one of the most important functions of the government to help create those opportunities and to empower the business people of South Africa to take advantage of them. People often forget that the government is not a business, it does not create jobs, rather, it works very hard to create an environment whereby businesses can be established by businesspeople. The government does this by making sure that it adopts and implements correct policies that create stability in the economy.

I would like to talk to you briefly about some of the support that the government gives to businesspeople such as yourselves in order to create opportunities and create jobs and grow the economy.

Firstly, every year the Department of Trade and Industry and the Department of Arts, Culture, Science and Technology hold a Craft Imbizo. This imbizo takes the best of the crafters from each province and has a big national event where customers are invited to view and buy the crafts that are on display. Last year, where the products of 600 crafters were represented, was extremely successful as it was linked to the World Summit on Sustainable Development. There were a large number of international people attending the World Summit and they visited the Craft Imbizo; because of this the crafters were able to sell R1.3 million worth of crafts. Several of the crafters impressed these international visitors so much that they received export orders. Needless to say the items that end being at the craft imbizo must be of the best quality and must be original as well as offer diverse cultural and ethnic influences.

Secondly, the government has been very active in negotiating international trade agreements and working closely with other countries to promote good relationships and promote peace and stability across the world. While our activities in this area are very far removed from what you are doing they have the potential to have a big impact on your businesses and the opportunities that you are able to access. For example, our trade agreements and trade relationships allow the goods that are produced in South Africa to be sold in other countries at far more favourable terms than would have been the case and we see many international trade delegations coming through to South Africa to find opportunities and to trade with South African businesses. At least once a week we see a new trade delegation coming into South Africa. These businesses are coming from all over the world - America, Europe, Asia, and other countries in Africa. It is a very exciting time in South Africa for international trade.

Thirdly, the government is helping South African businesses to export. We are subsidising the costs of South African businesses to travel to other countries to market their products and goods, we take a South African stand at many international trade events and have South African businesses marketing themselves at these events.

Fourthly, we are trying to empower businesses in South Africa by establishing and subsidising business support centres, such as the ones in George and Plettenberg Bay. These centres help businesses by offering training, advice, information, and helping them to find business opportunities and tender for government contracts. There are also several government agencies and programmes that help businesses improve the quality of their products so that they meet international standards. To explain more of what government, the Department of Trade and Industry and its agencies can offer businesses, we have set up a stand here today so that you can get this information. You can also call our customer care number on 0861 843 384 to get more information.

Fifthly, we are trying to improve the availability of finance for businesses. We are aware of the difficulties that businesses face in trying to get loan finance from the banks and are looking for new ways to ensure that legitimate businesses with bankable projects get access to finance so that they can successfully start their enterprises. For businesses that are exporting we have established an agency where you can take out insurance for any losses that might take place when you sell to another country.

Ladies and gentlemen, the government is doing many things to support businesses in South Africa and I have only spoken about a few of them today. The government is aware that there is a lot more that needs to be done and we are working very hard to make sure that this happens. However, the government can only do so much - the business people and entrepreneurs in South Africa need to play their role. The role that businesspeople can play is very simple, and that is to be the best they possibly can and operate within the boundaries of the law. Putting this simple idea into practice can be very hard work but very rewarding at the end of the day.

What do I mean when I say you must also play your role?

Firstly, entrepreneurs need to be tireless in trying to make their business work and not give up after one or two setbacks. I know how difficult it is to start a business and to make it work. There are many challenges that you face every day and there are many risks that you will have to take. It is easier to be employed and go to work every day, however, the rewards of running a successful business are often much greater and the reality of South Africa today is that there are not a lot of jobs available.

Secondly, in order for businesses and entrepreneurs to take advantage of what government has to offer and what government has put in place, they need to be entrepreneurial and find the opportunities. For example, in government tenders, we have allocated preference points for small businesses, black-owned businesses and women-owned businesses. However, it is up to the businesspeople to take advantage of these opportunities by completing the tender documents and making sure that their businesses are compliant. We have also established Tender Advice Centres to help businesses complete the documents and give them advice on how to win tenders. Sitting at home saying that there are no opportunities for businesses or complaining that the government is not doing anything will not help you get government contracts. Rather look for the opportunities in daily and weekend newspapers and on television where most of these opportunities are advertised.

Thirdly, entrepreneurs need to look at the international market, as there are huge opportunities there. Many companies are finding these opportunities and there has been a lot of growth in the number of South African businesses that are exporting; this includes the craft industry. Often people do not realise that crafts are a very big industry worth billions of dollars. The opportunities in crafts exist in selling to other countries or in selling to the increasing number of international tourists who are visiting South Africa. Crafters need to find ways of ensuring that their products are sold to these people. As the DTI we are exploring several ways to assist the craft industry by helping you to form a craft export council which has been very successful for other sectors; we are also looking at establishing a craft emporium where craft will be permanently on display and on sale for the international visitors, but you the crafter will be paid upfront by the Department.

Fourthly, businesses need to ensure that they have good quality products. They cannot rely on the sympathy of potential consumers to buy their products. The products, even if they are crafts, need to be made of good quality materials and the workmanship should also be good. If necessary, there are training organisations or government agencies such as the CSIR and the South African Bureau of Standards that can help with quality issues. You can find out more about these organisations at the dti stand.

Fifthly, businesses need to understand the market they are selling their products to. In order to maximise their sales, crafters, as business people and entrepreneurs, need to do some work on understanding what their customers need. If it is not possible to speak to customers directly then it is important that you work with people who can give guidance on this. If businesspeople sell their goods internationally they should try and visit that country to understand how the people in that country think and to do some market research. The dti's Export Marketing and Investment Assistance (EMIA) Scheme offers subsidies for such marketing activities. If you are selling directly to tourists visiting the area then it might be useful to speak to these people find out what they are using the crafts for and what they would like to buy so that you can understand them and the people from their country better.

Lastly, businesses need to sell their products at the right price. It is important for the success of any business that the price is right, but getting the balance right between undercharging and overcharging can be difficult. Businesses need to ensure that they get a good price for their products so that the material, labour time and artistic value are included into the price. Crafters sometimes charge less than what the product is worth and we often hear stories of marketing agents who make super profits for the crafts sold while the crafters are getting practically nothing and are struggling to survive. Marketing agents are very important, as they understand the market and can sell more products, but you must have the right people marketing your products so that you get the best possible price for your goods.

Ladies and gentlemen, today I have spoken about the large number of opportunities that are available to businesses in South Africa. Through the support of the government and other organisations, entrepreneurs are able to take advantage of these opportunities, but I have also said that it is not always an easy road to success and it comes with a lot of hard work. I hope that you will find the opportunities, take advantage of them and become successful enterprises. I wish you the best of luck with your businesses and thank you for listening to me.

Issued by Ministry of Trade and Industry
11 March 2003


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