Since the end of apartheid in 2009, South Africa has not only emerged as a leader on the African continent, but its export products have become leading brands in Central Europe, the former Soviet bloc and beyond.
South African brewer SABMiller is now present in the entire Central Europe region, controlling half the Czech beer market and about 30 percent of market share in Hungary.
While promoting peace and security worldwide, South Africa’s foreign policy interests lie in a continental development and a continent-wide integration with its place and role in the forefront.
All South Africa’s official diplomatic representatives at 104 embassies and high commissions, together with 15 consulates, promote the country’s key strategic foreign policy objectives. Active assistance is given to South African companies to enter Central European markets. It is among South Africa’s priorities to increase exports and investments across the world, with a view to creating employment opportunities for South Africans.
Johann Marx is South Africa’s ambassador to Hungary and also accredited to Croatia, which became the 28th member of the European Union in 2013.
Hungary and South Africa share a common experience in that both countries emerged in the early 1990s from relative global isolation, due to the Iron Curtain imposed on Hungary by Soviet occupation following World War II, Marx said in an interview with AFKInsider. “During the same period, South Africa experienced the ideological ‘Iron Curtain’ of apartheid,” Marx said. It is not surprising therefore, that both Hungary and South Africa
were somehow “obliged in the years that followed to focus on their economic re-integration in their respective regions.”
In an earlier article, AFKInsider reported on the re-engagements of the four Visegrad countries with the African continent. Hungary, Slovakia, the Czech Republic and Poland formulate strategies and policies to be more visible in African societies to foster economic cooperation first and foremost. Playing a role in African development is not new to any of these countries –under former communist regimes they had managed linkages under the cloak of solidarity and ideology.
Today, the European Union as a bloc is South Africa’s most important trading partner, Marx said. “As relatively new members of the EU, the Central European countries are seen as important markets for the expansion of South Africa’s trade and investment with the
Union, also in the context of the Visegrad Four.”
In the past 20 years trade relations have grown from zero to up to $1 billion USD total turnover with Hungary’s export reaching $500 million to $800 million in the last three years. It now amounts to about 40 percent of Hungary’s total African export and places South Africa to the top 10 Hungarian export destination outside Europe, according to a recent report by Kalman Meszaros, economic and commercial counselor at the Embassy of Hungary in Pretoria.
Meszaros’ job of commercial counselor was created in August 2011 as part of the Hungary’s new strategy towards the continent.
In investments, large South African companies were rather active in Hungary in the 1990s including SAB, Mondi, Group 5, Intertoll, Ster-Kinekor, Steinhoff International, Meszaros said in an interview with AFKInsider. In the new millennium small and medium-sized companies such as Naspers and CNS started to expand business in both directions.
South African investments in Hungary are estimated at about $250 million USD, Meszaros said.
Economic cooperation between South Africa and the Czech Republic is also growing. Concerning the balance of trade, Czech Republic is a pro-export-oriented economy– an indication of future Czech-South African relations.
Linda Piknerova is a lecturer of political science and international affairs at the University of West Bohemia in Pilsen. Since the 1990s, Czech exports have been growing, with one exceptionally bad year in 2009 caused by the global financial crisis, Piknerova said in an interview with AFKInsider.
Top Czech exports include engines, gear units, pumps, generally engineering products, as well as iron, steel and chemical commodities. The auto industry – private cars and vans – are seen as having the highest potential for future trade cooperation, Piknerova said.
In terms of South African companies with investments in the Czech economy, Naspers is involved in well-known shopping portals such as www.mall.cz. The company focuses primarily on e-commerce, and has spread its full range of Internet-based services across Central and Eastern Europe.
Mondi Flexibles focuses on the paper industry and has a full range of products that it offers to multiple industries.
SAB Miller is also present in the entire region, controlling half the Czech beer market via Pilsner Urquell company, or having about a 30-percent market share in Hungary with major brands like Dreher and Arany Aszok. The company’s European regional operations are managed from its London headquarters.
“SAB Miller started its international expansion in 1993 in Hungary as a launchpad for its series of acquisitions that has propelled the group to No. 2 in the world,” Meszaros said. “Interestingly the now-No. 1 AB Inbev also started in Hungary by the Belgian
Interbrew acquiring Borsodi Brewery.”
The first major South African investment in Hungary was the purchase of the Kobanya Brewery for some $100 million USD, and ever since it has been a success story for SAB Miller with a steady presence in the region.
It’s important for both Hungary and South Africa to develop bilateral links. With this in mind, on May 13, 2013, they created the South Africa–Hungary Joint Economic Commission to develop and diversify relations. The embassy in Budapest, like all South African embassies in Central Europe, actively helps and encourages South African companies to enter markets in the region by providing local market information, Marx said. At the same time, the Hungarian government is assisting Hungarian companies, according to Counselor Meszaros, to enter the South African market by the Joint Economic Commission pinpointing business sectors for cooperation of mutual interest, facilitating market access for small- and medium-sized enterprises, supporting and sponsoring trade events for Hungarian ventures, and offering financing through Eximbank.
Istvan Tarrosy is assistant professor of political science and director of the Africa Research Center at the University of Pecs, Hungary. He was Fulbright Visiting Research Fellow at the Center for African Studies, University of Florida in 2013 and early 2014. He is co-editor of “The African State in a Changing Global Context, Breakdowns and Transformations” (Berlin, 2010) and editor of “Afrika Tanulmanyok,” the Hungarian journal of African Studies.
