Saturday, 01 December 2012 13:19

Newsletter 22

In this newsletter:

  • China to launch second African Satellite
  • Total to sell Nigerian oil stake to China’s Sinopec
  • SA wines should target China

China to launch second African Satellite

 China Great Wall Industry Corp will launch the Democratic Republic of the Congo's first satellite, which will also be developed by China, before the end of 2015, according to a contract signed on Saturday Nov.17 2012.

The Chinese company is the country's only authorized provider of commercial satellite launch services for international clients.

The contract for CongoSat 1, a communications satellite to be developed and manufactured by the China Academy of Space Technology for the National Network of Satellite Telecommunications of the African country, was inked in Zhuhai, Guangdong province.

The signing was on the sidelines of the Ninth China International Aviation and Aerospace Exhibition, also known as the Zhuhai Airshow.

The contract shows the CongoSat 1 design will be based on the DFH 4 satellite platform, capable of covering the Democratic Republic of the Congo and all the central and southern parts of the African continent through the advanced transponders installed on the satellite.

China will build ground control and training facilities and will train satellite-control personnel for the client.

China Telecom, one of the country's biggest telecommunications companies, will also play an active role in the project by upgrading the operation system and providing management services to the network.

The deal marks the second time that China has exported a satellite to African nations, following the NigComSat 1,

Another communications satellite was launched for Nigeria in May 2007 by Great Wall.

"Today is a big day, a historic day, for us," Richard Achinda Wahilungula, director-general of the Congolese network, said after signing the contract.

"China has abundant experience in satellites and telecommunication. We came here because China can help us develop a satellite and telecommunication, and we never contacted anyone else for this project."

"Compared with Western nations, China's satellite technology may arguably not be the most advanced, but it definitely suits the demand of Africa. China has reduced African countries' satellite operation costs and trained a great number of professionals for us," said Bode Agusto, who was senior budget adviser to former Nigerian president Olusegun Obasanjo, according to an earlier report from Xinhua News Agency.

.As of now, Great Wall has launched 35 rockets carrying a total of 41 satellites for foreign clients. It has also provided seven piggyback launch services to foreign clients.

In addition to the African country, the Chinese Academy of Sciences and two Hong Kong-based satellite companies also signed service contracts with Great Wall.

According to China Aerospace Science and Technology Corp, China aims to take up 10 per cent of the international satellite market and 15 per cent in the world's commercial launch field by the end of 2015.


Total to sell Nigerian oil stake to China’s Sinopec

Total, France’s largest oil company is selling a 20% stake in a Nigerian offshore oilfield to China Petrochemical Corporation (Sinopec) for about $2.5bn as part of an asset-disposal programme.

Total said on Monday it had signed a deal to sell the stake in the OML 138 block, which produces 130,000 barrels a day of oil equivalent and contains the Usan field, which started production in February.

The asset accounts for about 10% of Total’s Nigerian production, which averaged 287,000 barrels a day last year.

The French group said in September that it planned to sell assets worth between $15bn and $20bn through to 2014 as part of a bolder approach to managing its business, which has seen it buy and sell assets more frequently.

China’s state-backed energy companies are seeking new oil and gas reserves abroad to feed the world’s second-largest economy, especially from regions such as Africa where government scrutiny is lighter than in North America or Europe.

Nigeria is Africa’s largest crude oil exporter and oil companies operating there have long had to deal with attacks on their pipelines and staff, with the country’s worst floods in 50 years seriously affecting their output.

Total CE Christophe de Margerie said earlier this month the group did not intend to disengage from Nigeria altogether.

"It doesn’t mean we are scared and intend to start some kind of walking out of Nigeria. Total is happy to develop its projects in Nigeria."


SA wines should target China

EXPORTING wine to China is not about just dipping in and out when occasional opportunities arise.

In order for South African wine producers to reap the benefits of the promising export market to China, they must establish a Chinese-focused producers' association, backed by the South African government, tasked with cracking this huge emerging market and making its commitment to the Chinese market crystal clear.

South African wine industry evolve from an unknown entity internationally, to one that still captures far too little attention outside of its borders, given its quality.

South Africa should stop bashing its head against the overtraded and oversaturated UK and US markets, and rather tap into other emerging markets, and in particular China.

China is one of South Africa's biggest trading partners yet we are paying steep taxes on our wine exports to China, whereas countries like New Zealand and Chile are not.

South Africa should lay the proper groundwork with China or it will miss the opportunity altogether to trade and thereby forgo a sustainable and profitable market in the future.

China gets things done in three years that the rest of the world accomplishes in a decade, and the fact that the Chinese have undertaken an aggressive vineyard planting programme, which looks to convert its rice wine drinkers to grape wine drinkers, freeing up much of its rice crops to feed more citizens, means that China will make very fast work of growing its own wine industry.

According to figures from Wines of South Africa (Wosa), the country exported just over 382million liters of wine worldwide from October 2011 to September 2012, of which China received only just over 5.8million liters, which means that only 1.52% of South African wine is headed to China.

Furthermore, in 2008 the South African wine industry's annual contribution to the economy grew to R26.2-billion, but this is still only 2.2% of gross domestic product (GDP), according to Sawis, leaving much room for growth. In layman's terms, SA is capturing a tiny fraction of the mega Chinese market. At a Shanghai wine shop, only five of 1600 wines on the shelf were from SA.

To be successful, South African wine producers must pitch at the premium level, instead of making the same mistakes made when entering the UK and European markets with "cheap and cheerful" wines. It is now difficult to break this perception of South African wines.

The South African fine wine market is highly underrated at home and abroad. On the international competition front, its wines cannot be disputed and continue to outshine and perform exceedingly well at the majority of accredited wine competitions.

However, its at the lower end of the scale when it comes to pricing its premium estate wines. Ultimately, premium wines will work to establish better margins for the industry and can only do it good.

The country needs a co-ordinated approach with the likes of Wosa, the Department of Trade and Industry and tourism bodies to really make inroads.

About 30% of wine in China is bought by the Chinese government as gifts or to entertain. These are key aspects of Chinese culture and provide yet another opportunity for South African government to get involved and help it come to the party.

An effective strategy would be to work through South African businesses that are already established in the Chinese market.

South Africa needs to give China a good reason to drink its wines and this can only be done through hard work.