A new strategic economic partnership between South Africa and Saudi Arabia would potentially create business opportunities worth R20-billion, Trade and Industry Minister Rob Davies said on Monday.
The establishment of the new joint holding company, Saudi Arabia South Africa Holding (Sasah), would seek to create mutual business opportunities in mining, petrochemicals and agriculture.
The holding company would be legally registered in South Africa and Saudi Arabia and would achieve the legal requirements of investment authorities and tax regimes of both countries. It might become a major shareholder in some strategic joint ventures, cochairperson of the Saudi Arabia South Africa Business Council Dr Iqbal Surve said.
Some companies had already indicated strong interest in the venture and he encouraged companies to approach the council to explore new funding opportunities.
The new partnership was in-line with South Africa’s strategy of seeking out new sources of investment and trade with dynamic economies, especially as trade and investment with most of South Africa’s traditional partners were either declining or stagnant.
Surve said that Sasah would enhance business activities between the two consortiums and improve the business relationships between Saudi Arabia and South Africa.
The new venture was initially launched during the fourth Saudi Arabian South African Joint Committee meeting held in Saudi Arabia’s capital, Riyadh, in April.
At the event, which was attended by Davies and his Saudi Arabian counterpart Minister Tawfiq Al-Rabiah, the two countries agreed to increase their total trade to a targeted R60-billion within the next five years.
Davies said the current total trade between the two countries stood at R34-billion in 2011. This represented a yearly growth rate of about 32.6% in one year.
Total trade in 2010 amounted to R26-billion.
He added that South Africa’s main exports to Saudi Arabia were oranges, iron-ore, ferromanganese, as well as machines and apparatus.