A GLOBAL / COUNTRY STUDY AND REPORT On

SOUTH AFRICA
Submitted to

Gujarat Technological University
UNDER THE GUIDANCE OF

Prof. Juhi Shah Prof. Shweta Bambuwala Prof. Neha Rohera Submitted by N. R. Institute of Business Management, Ahmedabad
IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

[Batch: 2011-13] MBA SEMESTER IV

(N.R. Institute of Business Management)
MBA PROGRAMME

Affiliated to Gujarat Technological University
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PREFACE

The only thing permanent in today’s world is change. In order to cope with the pace of change management holds a very important place in our lives. The course of MBA is one of the best ways to acquire the required knowledge in this context. Global Country Report is a crucial part of the curriculum. It blends theoretical knowledge with practical applications. It mirrors how management works by making us work together as a team and develop various analytical skills. The country under our purview is South Africa. This project report has studied the economy of the country in context and its various industries while simultaneously comparing it with the Indian scenario. Finally the report attempts to be helpful to all the readers as well.

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ACKNOWLEDGEMENT

The Global Country Report being a team effort, a lot of people have contributed in successfully completing it. We take this opportunity here to extend our gratitude towards each one of them. We would begin by thanking our Director, Dr. Hitesh Ruparel for giving us this platform to enhance our skills and also to all the project guides for their seamless support and cooperation. We would also like to thank our faculty members, Prof Juhi Shah, Prof Shweta Bambuwala and Prof Neha Rohera who gave us the right direction and guided us all through. At the same time they encouraged our efforts and motivated us. Finally , A sincere vote of thanks to everyone who directly or indirectly helped us in this report.

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TABLE OF CONTENT

PREFACE

.....................................................................I

ACKNOWLEDGEMENT .............................................................II PART – 1 CHAPTER 1 1.1 1.2 1.3 1.4 1.5 1.6 CHAPTER-2 CHAPTER-3 MACRO ENVIRONMENT ......................... V PESTEL ANALYSIS....................................2 POLITICAL ANALYSIS ................................3 ECONOMICAL ANALYSIS ..........................5 SOCIAL ANALYSIS ...................................11 TECHNOLOGICAL ANALYSIS.................. 15 ENVIRONMENTAL ANALYSIS .................18 LEGAL ANALYSIS ....................................22 FINANCIAL MARKET .......................... 28

WTO AND OTHER TRADE UNIONS AND IT’S IMPECT ON COMMERCE AND INDUSTRY ................................................34

CHAPTER- 4 CHAPTER- 5 5.1 5.2 5.3 5.4

NATURAL RESOURCES .......................... 40 SWOT ANALYSIS .....................................44 STRENGTHS: ...........................................45 WEAKNESSES .........................................45 OPPORTUNITIES .....................................45 THREATS .................................................. 46

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PART-2 CHAPTER- 1 CHAPTER-2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 CHAPTER-2 CHAPTER-3

MICRO ENVIRONMENT .......................... 47 INTRODUCTION OF SOUTH AFRICA ....48 ANALYSIS OF INDUSTRIES .................... 54 FMCG INDUSTRY .....................................55 BANKING INDUSTRY ............................... 76 PAPER AND PULP INDUSTRY ................91 PHARMACEUTICAL INDUSTRY ............ 114 MINING INDUSTRY ................................ 137 TOURISM INDUSTRY ............................ 156 TELECOMMUNICATION INDUSTRY ...... 169 MEDIA INDUSTRY .................................. 192 CEMENT INDUSTRY .............................. 209 DAIRY INDUSTRY .................................. 234 CONCLUSION ........................................ 249 BIBLIOGRAPHY ..................................... 257

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List of Tables Table 1 Fiscal Position in 2003 to 2013 .........................................9 Table 2 Major players In FMCG In SA .........................................56 Table 3 Gap Analysis between Waghbakri and Tiger Brands ......70 Table 4 The World Bank Group has given ranking to Country South Africa ........................................................ 72 Table 5 COMPARISION BETWEEN STANDARD BANK OF SOUTH AFRICA AND BANK OF BARODA ................88 Table 6 Paper Production & Consumption in South Africa 2011 .93 Table 7 Estimated paper demand ................................................98 Table 8 Industry Comparison of India and South Africa ............. 103 Table 9 Comparison between BILT and MONDI ........................ 109 Table 10 Table-India’s export import .......................................... 117 Table 11 PRODUCT PORTFOLIO ............................................ 123 Table 12 PRODUCT PORTFOLIO ............................................ 126 Table 13 MARKET SHARE....................................................... 127 Table 14 self starter in SA.......................................................... 131 Table 15 Key Overseas M &A .................................................... 180 Table 16 Peoples Skill ............................................................... 212 Table 17 2011/2010 PERFORMANCE & IMPROVEMENT INDICATORS ............................................................................ 225 Table 18 ACC CEMENT FINANCIAL HIGHLIGHTS ................. 231 List of Tables Figure 1 India’s top PHARMA companies .................................. 119 Figure 2 Operating profit from continuing operations ................. 124 Figure 3 Normalised diluted headline ......................................... 125 Figure 4 EBIT CHART ............................................................... 128 Figure 5 PBT CHART ............................................................... 128

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PART – 1 MACRO ENVIRONMENT

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CHAPTER 1 PESTEL ANALYSIS

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1.1

POLITICAL ANALYSIS

The Republic of South Africa held its first universal suffrage elections in April 1994. The African National Congress (ANC), which led the resist against white minority rule and the apartheid system of state-enforced racial separation, won control of the National Assembly.

The Assembly chose as President Nelson Mandela, the ANC leader was set free from the prison in the year 1990, after serving for a period of 27 years. His release was followed by years of secret contacts between the ANC and the key white business and political figures. These contacts bought both the sides to the conclusion that a settlement could be mutually agreed upon that would protect all South African’s interests.

The settlements themselves faced many obstacles, including several outbursts of violence that were capable of destroying the peace process. Finally, however, in November 1993, all-party negotiations reached a stage of mutual agreement on a new constitution and free elections that were held in the year 1994. South Africa’s second universal right to vote elections were held in the year 1999, and the ANC managed to retain control of the National Assembly. The Assembly chose Deputy President Thabo Mbeki, who had served in key ANC posts overseas during the anti-apartheid struggle, to succeed Mandela. Mbeki managed to retain his position as the President following the April 2004 parliamentary elections, in which the ANC won almost 70% of the votes. South Africa’s politics continue to be subjugated by the ANC, which has enjoyed support among many black South Africans because of its role in spearheading the long struggle against the rule of the white minority. Until December 2007, Thabo Mbeki served as president both of the party and the country when he lost the party presidency to a rival. He was expected to remain President of South Africa until the 2009 elections but resigned from the position in September 2008. He was replaced by a temporary president,

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former Deputy ANC leader Kgalema Motlanthe. Post Mbeki’s resignation, many prominent members of the party led a breakaway faction, now known as the Congress of the People (COPE). Prior to the 2009 elections, the ANC held a 72% majority of the seats in the 400-member National Assembly, where the country’s legislative power is principally vested, way ahead of its closest opponent, the Democratic Alliance (DA), which had 12% of the seats. The Inkatha Freedom Party (IFP), headed by Mangosuthu Buthelezi, had about 6% seats of the Assembly. Buthelezi, an active member in South African politics for about decades, holds a Zulu chieftainship, and the party majorly is Zulu in membership.

The IFP experienced a consistent decline in the parliamentary seats since the election held in the year 1994, while parallely the ANC and the DA have gained electoral support.

Other parties represented in parliament include the New National Party (NNP), the United Democratic Movement (UDM), the Independent Democrats (ID), and the African Christian Democratic Party (ACDP). Over and above the National Assembly, there is a higher legislative body called the National Council of Provinces (NCOP) vested with limited powers. Governments of 9 provinces choose is members.

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The Democratic Alliance Strains in the ANC Alliance A New Party Emerges-The Congress of the People The Zuma Administration The Arms Deal and Corruption Scandals Press Freedoms HIV/AIDS Land Reform Crime U.S. Relations The United Nations 4|Page

1.2

ECONOMICAL ANALYSIS

Mortality levels especially in child or less than five years of age reflect: o The state of public health and hygiene, o The sanitation, cultural and more about feeding and clothing, o The social and economic growth and o The people’s outlook towards the dignity and value of human life itself. The Child Mortality Level is the statistical index which expresses the idea of whether environmental hazards, including communicable diseases, typhoid, cholera, jaundice, etc. are controlled effectively or not in the developing or less developed countries. The child mortality level can be used for strategic and national planning as well as a measure of social indicators like: o The quality of health care, o Food, o Family planning and o Usage. The level provides proof of policies and practices that guide to the improvement of health. Factors such as sanitation and disaster in and around the home are also shown in the child mortality rate. Child mortality poses problem to both society and the family. High levels of child mortality are a signal that basic health facilities to fight poor sanitation, environmental degradation and living condition are grossly inadequate. In addition to this they reveal that other basic facilities those are absent or are in a poor state, e.g. like: utilities, drainage, sewerage, etc... Where high level of child mortality is dominant, there is equal chance of infection of communicable and parasitic diseases. This is an indication of poor hygienic conditions and frequent occurrence of epidemic diseases. The Bivariate analysis shows that, on the basis of Chi-square test, 10/14 independent variables influence