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Last updated : Nov 2009
Cape Town Business Profile
Cape Town Business Overview - TravelPuppy.com
Cape Town is somewhat removed from the frantic business hype of the country’s major financial and industrial centre, Johannesburg. However, the Western Cape accounts for 14 % (R81,800 million) of South Africa’s Gross Domestic Product (GDP), the 3rd highest in the country, and the city is home to some of the country’s major financial institutions. These include insurance giants Old Mutual and Sanlam, financial houses like the Board of Executives, Merrill Lynch, Investec and Fedsure, and petroleum multinationals BP, Caltex (Chevron) and Shell.

The economic mainstays of the region are agriculture, tourism, information communication technology (ICT), manufacturing and construction and financial services and property. Since 2001, a general economic slowdown has occurred, largely due to the strengthening Rand and particularly affecting transport, agriculture, communication and financial services.

The ICT sector is currently the most significant for growth and employment, although the monopoly of telecommunications giant, Telkom, is limiting several companies and the industry has struggled since the 2001 downturn, as has the financial services sector.

The single most significant industrial source of employment in the region is the textile and clothing industry, which supplies jobs for a huge 170,000 people. Ever since the tourism boom in 1995, the city has been gathering rich rewards and tourism is now the largest overall employer in the region, supplying employment for a huge section of the workforce, both directly in the service industry and indirectly for street traders and other informal operatives.

Information Technology (IT) has also emerged as 1 of the major industries in the city, principally during the recent IT downtown, during which time it proved resilient. The industry is 1 of the largest employers, with Cape Town boasting about 1,200 IT companies employing roughly 27,000 people. Within the IT industry, the focus is largely on software development and consultancy, with 17% of the exported products and services going to the United States of America, 32% to Europe, and the rest to Africa.

The agriculture industry also employs numerous amounts of people, with the emphasis being on wine production and fruit farming. With 200 kilometres of commercial fishing zone and an expanding port, fishing and shipping are also significant industries in the city. Fishing alone provides jobs for 27,000 people. Another huge industry in Cape Town is the media. The city is favoured as the ideal location for international film crews, attracted by brilliant foreign exchange rates, a 1st rate infrastructure, a good film service industry, excellent weather, beautiful locations and well stocked modelling agencies. However, rising prices and a strengthening Rand are currently intimidating this industry.

Another important industry is printing and publishing, Cape Town has the lion’s share of this segment of South Africa’s economy.

The awarding of the 2010 FIFA World Cup will have significant benefits for the economy and is expected to contribute R21,3 billion to the country’s Gross Domestic Products, as well as create 159,000 jobs. Some, however, fear that the resulting construction and infrastructure of roads, hotels and stadiums will not be sustainable. Much of the action will be focused on Cape Town and the knock on effect for tourism and investment is predicted to be massive.

With the Western Cape boasting the highest adult education level in South Africa (with 93% of the people over the age of 20 having undergone schooling), 80% adult literacy (also the highest in South Africa) and 5 residential universities and technikons, Cape Town boasts a vastly skilled workforce. However, only 45% to 52% of school leavers matriculate and discrimination persists. Government spending on education currently falls short of the other provinces, although it is progressively increasing. This is undoubtedly a city on the grow, each year attracting around R1.1 billion foreign direct investment.

Poverty is still rife in Cape Town, with 29% of the population in the region living in poverty, which is nonetheless the lowest in the country. The official unemployment rate for South Africa is guessed to be almost 28% as of March 2004, while the expanded national unemployment rate is 42%. Unofficial unemployment rate approximations for 2004, according to the Cape Times newspaper, are 20% for Cape Town (set to rise to 21% in 2005) and 18% for the Western Cape. Another crisis facing the city is the increasing HIV infection rate, the Western Cape has an infection rate of 7.1%, which is already 1 3rd of the current average South African infection rate.

The Western Cape government is presently working on the iKapa elihlumayo project, which aims to increase economic growth, economic participation and employment, as well as reduce geographical and socioeconomic inequality, and provide a maintainable social safety net. Initiatives include the introduction of a Rapid Bus Transport system, the assembly of a film studio, and a further education and training programme.

Cape Town’s central business district is located in the city centre and Foreshore, although business and industrial parks can also be found in the southern suburbs (Rondebosch, Claremont and Wynberg) and on the outskirts, with Parow, Epping, Retreat and Montague Gardens the core industrial areas outside the city. New developments are appearing in Vredenburg and Saldanha, as a result of the massive Saldanha Steel Project.

The new Cape Town International Convention Centre is located on the Foreshore, linking the V&A Waterfront and the city centre.

Cape Town International Convention Centre
Address: Convention Square, 1 Lower Long Street
Telephone: (021) 410 5000
Facsimile: (021) 410 5001
Email address: info@ctconvention.co.za
Website address: www.capetownconvention.com

The centre opened in June 2003 and has proved a great success, contributing 2 and a half times more to the national economy (R2.4 billion) than was initially anticipated. It will also create around 3,900 direct jobs in the city during 2005, over and above the 3,668 created during its 1st year. Over the next 5 years, the centre is expected to earn another R9.5 billion for the country’s Gross Domestic Products. The centre has also had a massive knock on effect for Cape Town’s tourism industry. The V&A Waterfront, in the heart of the city, is an tremendously popular and ever expanding business district.

The University of Cape Town’s Graduate School of Business is situated here, producing some of the big minds in business, both for South Africa and abroad.

The University of Cape Town’s Graduate School of Business
Tel: (021) 406 1338/9 or 1175
Facsimile: (021) 421 5693
Email address: info@gsb.uct.ac.za
Website address: www.gsb.uct.ac.za

The Cape Chamber of Commerce and Industry was founded in 1804 and is a 1 stop shop for business information and advice.

Address: Cape Chamber House, 19 Louis Gradner Street
Telephone: (021) 402 4300
Facsimile: (021) 402 4302
Email address: info@capechamber.co.za
Website address: www.capechamber.co.za

Business Etiquette

Business practices in Cape Town and South Africa are very alike to those in the United Kingdom and the United States of America. Despite the fact that Cape Town is more informal than Johannesburg, most industries do suppose a suit and tie. The more modern or artistic industries, such as information technology and the media, tend to display a more informal attitude to dress, mainly in the summer months. However, it is recommended for foreign business visitors to maintain formality and only resort to the casual uniform of t-shirts, shorts, and sandals when the after hours entertainment begins.

Business hours are from 9.00 am to 5.00 pm, although several companies finish earlier on a Friday. The exchanging of business cards is a significant ritual in Cape Town and a firm handshake between both men and women is common. In some instances, the African triple handshake will be used, this is a usual handshake, then a tilt to the hand is performed to clasp the fingers at a 90 degree angle (but without letting go) and then a return to a normal handshake.

Socialising is a big part of the business scene in Cape Town and a lot of business is conducted over lunch. Wine will more than likely be incorporated and visitors should note that South African wines often have a slightly stronger alcohol content than the majority of European wines (generally nearer 13%). Admiration of the local wine will be appreciated, although over indulgence is certainly not advised. Capetonians pride themselves on being hospitable to foreign visitors and an invitation to a business contact’s home is not abnormal. These will, more than likely, take the form of a braai (barbecue), which tend to last throughout the complete afternoon and often into the night.

Alcohol flows freely here and a gift of a bottle of wine is always appreciated, unless the host is Muslim, in which occasion alcohol is strictly prohibited. In this case, a gift of flowers, chocolates or a speciality gift from the guest’s home country is more appropriate.