Indian industry’s inclusive footprint in South Africa Doing business, doing good
www.pwc.co.za PwC India Desk PwC’s India Desk provides a • M&A deal and corporate finance comprehensive range of tax, advisory services, including due diligence, India has a diverse and rapidly and assurance solutions. Our team of valuation, tax structuring and post- expanding economic relationship trusted business advisors works closely deal integration; with South Africa, and as India and seamlessly with colleagues in has progressed from a developing India to help clients address important • Tax compliance and optimization; nation to an economic powerhouse, issues facing their businesses. the market provides abundant and • Transfer pricing; unexplored opportunities for business. Cross-border solutions for South African and Indian • Financial reporting and compliance services, including audit and But divergent cultures and business businesses landscapes combined with unique assurance; legal and political environments can Our team provides assistance with make these ventures particularly meeting clients’ unique needs, • Risk and regulatory matters; and challenging. Indian companies that including those with respect to: seek to enhance their presence in • Business reviews and performance South Africa and the rest of Africa • Doing business in South Africa/ improvement. require a comprehensive suite India, including strategic options of services, as do South African and market entry analysis; companies evaluating opportunities in India.
Indian industry’s inclusive footprint in South Africa – doing business, doing good Contents
Foreword 1 About the CII 3 Historical ties 4 Trade between South Africa and India 5 Sectoral snapshots 8 Job creation 11 Skills development 12 CSR activities of Indian companies in South Africa. 14 Challenges faced by Indian companies in South Africa 18 Future growth areas 19 Moving forward 20 Conclusion 21 Contacts 23
Indian industry’sIndian industry’sinclusive footprint inclusive in footprint South Africa in South – Doing Africa business – doing business,while doing doing good good Foreword
Today, treatment costs less than These are indeed exciting times and US$1/day and the National Health I would like to thank the Consul Department’s Aids treatment General of India for inviting PwC programme reaches almost four South Africa to be its knowledge million South Africans, the largest partner in producing this report and programme of its kind in the world. participating in the India-South Africa As a result of the programme, Aids- Business Summit 2018. related deaths have decreased by almost a third since 2010.
But the good news doesn’t end there. The entry of these and other South Africa’s association with India companies’ into the South African market has also created jobs and led has evolved over centuries, through Dion Shango challenging periods of empire and to new investment worth billions apartheid, with the two countries of rand. Cipla alone has invested Regional Senior Partner & CEO emerging in the 21st Century as almost R500 million in one local ARV PwC Southern Africa vibrant democracies pursuing manufacturing plant. ambitious growth and development ‘Doing business while doing good’ is a agendas. Their membership of the mantra that naturally extends beyond BRICS group of major emerging day-to-day business to companies’ economies(together with Brazil, Russia corporate social responsibility and China) underscores not only the activities. As this report outlines, two nation’s parallel history, but more Indian companies are distinguishing importantly, the vast potential these themselves in this area too and two regional powerhouses share. demonstrating their commitment to sustainable development in South Beginning in the 1990s, the economic Africa in a number of areas. These relationship between India and South range from education and healthcare Africa has developed beyond a short- schemes to job creation, agricultural term view of trade and investment projects and empowering women and has increasingly expanded to in initiatives taking place across the include the transfer of technology, country. skills and knowledge. Such transfers are a growing trend and demonstrate Recognising the immense foresight and commitment to working opportunities that exist both in South together in the long term for mutual Africa and in India, and the in-depth benefit. local knowledge that is needed to succeed in their unique markets, we The role of Indian pharmaceutical find ourselves working more and more companies in South Africa’s fight closely with our colleagues at PwC against HIV is a good example of this India to deliver the services our clients kind of commitment and demonstrates need seamlessly on both sides of the how doing business can benefit people Indian Ocean. This has led to the on all sides. establishment of our PwC India Desk Before the introduction of affordable in Johannesburg to provide a full- generic treatments by companies such service offering through a single point as Cipla and Ranbaxy, antiretrovirals of contact, to facilitate inward and were out of reach for almost everyone outward investment and operational in the developing world. support.
1 Indian industry’s inclusive footprint in South Africa – Doing business, doing good Foreword
It is with great pleasure that the Some of the companies that have Confederation of Indian Industry (CII) invested in South Africa and are presents “Indian industry's inclusive conducting large-scale operations footprint in South Africa” to showcase in country, are among the largest the depth, importance and impact that conglomerates, not only in India Indian companies have had in South but globally, and employ over half a Africa. million people across the world.
There has never been a more This paper also addresses some of important and opportune time the key challenges being faced by to highlight the strong economic Indian industry in South Africa. It relationship between India and South highlights future growth areas along Africa, as well as to spotlight the with recommendations, which will quiet diligence, support, drive, hard hopefully encourage potential Indian work, innovation and creativity of the investors to further enhance economic majority of the Indian companies in activity. the country. On behalf of the CII, I wish to thank The relationship between South Africa our knowledge partner, PwC South and India – which spans nearly two Africa, and also extend my sincere centuries – is largely one that speaks thanks to all the Indian companies, of integrity, enthusiasm, development government bodies, and academic and and promise. financial institutions for their inputs that are reflected in this report. Evolving over the years from a strong political ally into a vibrant economic I believe that we will keep up the partner, the first point of reference momentum going forward, focusing to this relationship is always to on growth, and that our collective mark Mahatma Gandhi’s arrival in efforts will enhance India’s economic South Africa. The significance and and CSR footprint in South Africa, as importance of this cannot be more well as the rest of Africa. pertinent in the context of the India- South Africa relationship today.
With well over 150 Indian companies in South Africa having had an immeasurable positive impact on the country, this report aims to provide an overview of Indo-South African business relations, a snapshot of some of the key sectors reflecting India’s economic presence in South Africa, and a strong focus on the Chandrajit Banerjee CSR activities, as well as job creation Director General and skills development initiatives Confederation of Indian Industry being undertaken by Indian industry in South Africa – all of which are significant.
Indian industry’s inclusive footprint in South Africa – Doing business, doing good 2 About the CII
The Confederation of Indian Industry (CII) works to CII code of conduct create and sustain an environment conducive to the development of India, partnering industry, Government, Ethical business practices and civil society, through advisory and consultative processes. Ethical business practices are a journey. All member companies should adopt policies and procedures intended CII is a non-government, not-for-profit, industry-led and to achieve the following in their business practices: industry-managed organization, playing a proactive role in India's development process. Founded in 1895, India's Accurate books and records premier business association has around 9000 members, The company will maintain accurate accounts and records from the private as well as public sectors, including SMEs which reflect the true and fair picture of the company's and MNCs, and an indirect membership of over 300,000 affairs in compliance with accepted accounting principles enterprises from around 265 national and regional and standards for financial reporting. sectoral industry bodies.
CII charts change by working closely with Government Bribery and corruption on policy issues, interfacing with thought leaders, and The company will prohibit bribery in any form in all its enhancing efficiency, competitiveness and business business dealings and will maintain strong controls to opportunities for industry through a range of specialized prevent and detect improper payments. services and strategic global linkages. It also provides a platform for consensus-building and networking on key The company shall comply with anti-money laundering and issues. terrorist financing laws and report unaccounted-for cash or suspicious transactions. Extending its agenda beyond business, CII assists industry to identify and execute corporate citizenship Fair and equitable treatment programmes. Partnerships with civil society organizations carry forward corporate initiatives for integrated and The company shall not unfairly discriminate on the basis inclusive development across diverse domains including of race, caste, religion, colour, ancestry, marital status, affirmative action, healthcare, education, livelihood, gender, sexual orientation, age, nationality, ethnic origin or diversity management, skill development, empowerment disability. of women, and water, to name a few. The company shall not tolerate harassment, whether sexual, As a developmental institution working towards India's verbal, physical or psychological, against any employee. overall growth with a special focus on India@75 in 2022, the CII theme for 2018-19, India RISE : Responsible. Health and safety Inclusive. Sustainable. Entrepreneurial emphasizes The company shall provide a safe, clean and healthy work Industry's role in partnering Government to accelerate environment. India's growth and development. The focus will be on key enablers such as job creation; skill development; financing growth; promoting next gen manufacturing; Quality of goods and services sustainability; corporate social responsibility and The company shall strive to ensure that its products and governance and transparency. services meet the legally required safety and quality standards. With 65 offices, including 9 Centres of Excellence, in India, and 11 overseas offices in Australia, Bahrain, Environment and society China, Egypt, France, Germany, Iran, Singapore, South Africa, UK, and USA, as well as institutional partnerships The company shall strive to be a good corporate citizen by with 355 counterpart organizations in 126 countries, CII promoting social welfare activities, sustainability and by serves as a reference point for Indian industry and the minimising the adverse impact of company operations on international business community. the environment.
3 Indian industry’s inclusive footprint in South Africa – Doing business, doing good Historical ties
South Africa and India share a rich past and bright future. India has transitioned “India came to our aid when from being South Africa’s political ally to being a vibrant economic partner. the rest of the world stood Despite challenges, the opportunity for increasing the value of bilateral trade by or gave succour to our between the two countries is growing exponentially each year. oppressors. When the doors South Africa and India have nurtured a bilateral relationship since the 1860s, of international councils when the first Indians arrived in South Africa. India was one of the first were closed to us, India countries that rallied at the United Nations in support of the anti-apartheid opened the way. You [India] movement in South Africa. The strong bond established between the two countries during the struggle for democracy in South Africa became further took up our battles, as if they entrenched in post-apartheid South Africa.1 were your own. Now that we have been victorious, it cannot be said too often that residential visit y aco u a to India our victory is also India’s. 1990 2000 2010 – Nelson Mandela Indian i h o ission I SA ialo ue oru th I S Su it esta lished in SA esta lished hosted in ur an