China becomes South.Africa's top export destination

China overtook the United States as South Africa's biggest export destination in the first half of 2009, reinforcing the Asian country's push to build trade links with Africa.

South African trade and industry department data also showed on Friday China replaced Germany as its largest country trade partner.

The European Union remains, by far, South Africa's largest regional trading partner for both imports and exports.

Data for South Africa -- Africa's biggest economy -- showed exports to China stood at 27.6 billion rand for the year to June, against 35.8 billion rand for the whole of 2008.

Exports to the U.S. were 19.1 billion rand compared with 66.5 billion rand for 2008.

China has ramped up trade with Africa this decade, particularly looking for the continent's abundant mineral resources, surpassing competing countries in Europe and the United States that have been harder hit by an economic downturn.

China's overall trade with Africa has increased tenfold over the past decade, hitting $107 billion last year, narrowly eclipsing the United States.

South African imports from China measured 35.24 billion rand for the six-month period against 31.45 billion rand for Germany and 23.3 billion rand for the United States.

"China has already increased their footprint throughout Africa, not just South Africa," Efficient Group economist Freddie Mitchell said.

"With South Africa, a lot of doors have opened up to them," referring to China's biggest bank ICBC buying 20 percent of South Africa's Standard Bank, the continent's biggest bank by assets.

Wisconsin exports dive 21.5% in 1st half of year

Wisconsin's exports, from paper products to massive shovels used in coal mines, appear headed for their sharpest yearly decline since at least the 1980s - the latest indicator that the economic slump has been as wide as it is deep.

Foreign demand for made-in-Wisconsin goods declined 21.5% in the first six months compared with the same period a year ago, paralleling a 23.8% national decline in U.S. exports, according to the U.S. Census Bureau.

Exports from the state previously had grown every year since at least 1987, except for three minor declines in the period from 1998 to 2001, according to state and federal records.

The decline so far this year has been unusually severe, in Wisconsin and globally.

"This is by far the deepest decline in world trade since the 1930s," said Bernard Hoekman, director for international trade at the World Bank, a multinational lender to developing nations.

Cross-border trade always has been a lubricant of global growth, but the World Bank expects the overall volume of international trade to retreat by 9% to 10% in 2009. That, in turn, has gummed up global economic output, which is expected to decline in 2009 for the first time since World War II, the World Bank said.

Foreign demand for industrial machinery from Wisconsin - the state's single biggest export category - fell 24%, to $1.4 billion, in the second quarter from the same period a year ago.

The impact on southeastern Wisconsin is acute, said Tim Sullivan, president and chief executive officer of Bucyrus International Inc., the Milwaukee-based maker of mining equipment. Most jobs at Bucyrus in the Milwaukee area - where it employs more than 1,300 people, out of a global workforce of 7,200 - "are very dependent on foreign business," Sullivan said.

Of the $1 billion a year in parts and equipment that Bucyrus ships from metro Milwaukee, 75% goes overseas, Sullivan said. That could climb to 80% next year as the company continues to seek business abroad to offset weakness in its North American markets.

The company's traditional export markets - Australia, South America and southern Africa - have all seen orders fall by double digits in the first half of the year, Sullivan said. But Bucyrus has stabilized itself by working off a strong order backlog that it accumulated last year, which has kept production at last year's level.

Also, new markets including China, India and eastern Europe have continued to expand. "Those markets are carrying us right now," he said.

In recent weeks, there have been indications that foreign markets have hit bottom, Sullivan said, echoing a recent analysis by the World Bank.

Gamut of goods

In addition to the drop in exports of industrial machines during the first half of this year, declines were spread among a gamut of Wisconsin-shipped goods: plastics, down 15%; paper goods, down 26%; and medical instruments, down 27%.

Declines also were evident among many of the state's major export destinations, from Mexico to Canada to Germany.

Declines in exports to China, the No. 3 buyer of goods from both Wisconsin and the U.S., were less severe.

"Mexico has slowed down, and so has all of Latin America," said Bill Niehaus, chief financial officer of Medica International Ltd., a Port Washington firm that acts as the export arm for U.S.-based pharmaceutical makers that aren't large enough to have their own international logistics staff. Medica offset the international slowdown by adding new clients, Niehaus said.

GE Healthcare Ltd. said its exports from Wisconsin have fallen in 2009 but wouldn't give precise figures. The medical technologies division of General Electric Co., which has a big base of manufacturing in southeastern Wisconsin, has been focused this year on turning around a slump in sales. Late last year, GE began cutting jobs in Wisconsin, where it employed nearly 7,000 workers before the downturn began.

The government does not track imports on a state-by-state level. Wisconsin is the nation's No. 27 export state, in the middle of the national rankings, census numbers show.

In 2005 and 2006, Wisconsin accounted for 1.7% of the nation's total exports. That slid to 1.6% in 2007 and 2008.

Slow recovery

Even as economists talk hopefully of a turnaround, however, sluggish international demand could mean the U.S. recovery will be slow to gather momentum, Hoekman said. Growth in trade volumes is expected to resume next year, but Hoekman said there's too much uncertainty to offer a more precise outlook.

Pockets of growth remain, although they are easier to find in China and India than in North America and western Europe. The Asian Development Bank last week said it expects China to post 8.2% economic growth this year, while India clocks in at 6%.

Around the world, exports are the locomotive that pulls other cars on the economic train, analysts argue. Just as a household needs income to pay bills, national economies need exports to afford imports and accumulate the national currency reserves to drive new investment and growth. Jobs created through foreign demand rank at the top of the economic food chain because they import new income into a region.

"Exports equals jobs; that's about as basic as it gets," Hoekman said.

That raises the stakes for the United States. As a nation, the U.S. buys more than it sells and borrows more than it lends. A drop in exports only widens those gaps and makes the U.S. more reliant on foreign loans, Hoekman and other economists note.

China ranks as the No. 1 supplier of U.S. imports. For every dollar of made-in-America goods sold in China, the U.S. purchased $4.84 in made-in-China goods. In 2008, the U.S. ran a record $268 billion trade deficit with China, which also ranks as the biggest trade deficit between any two nations in history.

To pay for imports, the U.S. borrows funds, often from the central banks of China, Japan and the Middle East.

"The U.S. is building up a pretty large pile of debt," Hoekman said.

By John Schmid of the Journal Sentinel

California exports drop for ninth straight month

Signs of global economic recovery were nowhere to be found in California's latest trade figures, although national figures did point to an uptick in spending.

California exports were down sharply for the ninth straight month in July from the same period a year ago, according to the University of California Center Sacramento.

Exports were valued at $9.77 billion, down 23.5 percent from $12.77 billion in July 2008.

"Adjusting for inflation, this was the lowest export total for the month of July California has recorded since 2003," said Jock O'Connell, the UC center's international trade and economics adviser.

The center based its analysis on data released Thursday by the U.S. Department of Commerce. As reported by the Associated Press, the department said international trade activity was on the rise, boosting foreign demand for U.S. goods for a third straight month. However, the United States also saw its appetite for foreign products increase.

U.S. exports rose 2.2 percent to $127.6 billion from June to July, and imports rose 4.7 percent to $159.6 billion, the largest monthly advance since record-keeping began in 1992.

The Commerce Department said those corresponding increases pushed the U.S. trade deficit to $32 billion in July, its highest level in six months.

Some economists saw increased imports as a sign that retailers and manufacturers are rebuilding their inventories, which could lead to greater production.

"Eventually the factories have to come back online to restock the shelves," said Carl Riccadonna, senior U.S. economist at Deutsche Bank Securities, which raised its forecast for third-quarter U.S. economic growth from 2 percent to 3 percent. In its analysis of California trade, the UC center said manufactured exports from the state fell by 25.2 percent in July, compared with a year ago, while agricultural goods and other non-manufactured exports dipped by 29 percent. Re-exports of goods previously imported into the state were off by 13.2 percent.

The UC center said California's year-to-date exports of $66.12 billion are down 23.1 percent from $85.99 billion in the 2008 January-to-July period.

The center said the value of foreign goods entering the United States through California in July was $29.1 billion, a 29 percent decrease from $41 billion last year.

State-specific imports are not broken down, because some goods entering California are bound for other states. Consequently, exports of California-produced goods are considered the key indicator of Golden State trade.

O'Connell pointed to some slivers of hope, noting that some California agricultural imports were up and that export totals have been edging up since spring.

Still, he said California's high unemployment and wobbly economy are "not likely to produce any robust recovery."

Other financial experts agreed.

"It's going to be very tough, because unemployment in this state is probably close to 25 percent if you consider the level of underemployment," said Keith Springer, president of Capital Financial Advisory Services in Sacramento.

Springer cited major losses, such as the scheduled March 2010 closure of the NUMMI vehicle-assembly plant in Fremont, the 25-year-old General Motors-Toyota joint venture that once employed 20,000.

"That's big and there's really no place to make up that many job losses in this economy," Springer said.

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As housing craters, Exports boom

WICHITA, Kan. -A tumbleweed rolled over the tarmac at the Wichita airport last week, its scraggly, dry branches blowing in the hot Kansas wind. Lest the reference to the Dirty Thirties goes too far in these Depression-obessesed times, the tumbleweed is an actual plant that grows in Kansas.

Still, anxiety levels in this stoic Midwestern city have shot higher as the financial crisis rages around it and economic indicators show a sharp deterioration in U. S. and global growth.

For global growth has been the lifeblood of Wichita, which has leveraged a weak greenback to sell a stream of grains, business jets, navigation equipment and conveyor belts to a hungry and prosperous world. Exports, the silent strength of the U. S. economy in recent years, are also now at risk as this made-in-America crisis circles round to bite the domestic economy in the back.

"Leading up to the August/September time frame everything had been business as usual and the news within the economy hadn't been directly impacting the aviation industry," said Jack Pelton, chief executive of Cessna Aircraft Co., one of the world's largest makers of corporate jets. "We were still taking lots of orders, and we have the strongest and biggest backlog in our entire company's history and production rates that are the highest in our company's history."

The subprime mess may have been rumbling in the background for months but the freeze in the credit system and the meltdown in the stock markets came at lightning speed, Mr. Pelton said.

"If I try to look back and see if I missed anything ... we knew the subprime issue was problematic, but that subprime issue had been really contained to the mortgage industry and not really manufacturers here in the U. S.," Mr. Pelton said during an interview at Cessna headquarters near the Wichita airport.

Now Mr. Pelton expects an inevitable slowing in orders, even possible cancellations, if the credit issues do not sort themselves out quickly.

"The big unknown is, will people be able to get their financing and how will that manifest itself?" said Mr. Pelton. "Will it be where we can work with customers and have enough lead time to react to that? Or will it come time for delivery and they just don't show up and say 'Sorry, what I thought I had in the way of financing went away.' That can be very serious."

Across town, where manufacturing companies had been working up a head of steam in recent years, events have been moving far too quickly for Leon Trammell as well.

"It's in the territory I can't get my arms around," says the chief executive of Tramco, a conveyor-belt manufacturer, which sells its products in 53 countries. Mr. Trammell, 75, was dumbfounded by the government's move to wade heavily into the U. S. banking system. Like many in this conservative city, he lives, breathes and dreams the American free-enterprise system. "I don't know anything the government has been involved in that they haven't screwed up."

While the U. S. housing bust has been hogging all the attention, the U. S. export sector here and in other cities around the United States has been quietly flexing its muscles, aided by a near-40% decline in the U. S. dollar on a trade-weighted basis since 2001. In August, exports hit the second-highest mark on record at US$164.7-billion, more than a 100% increase since early 2001.

Ever so slowly, the United States' giant trade deficit has begun to decline, dropping to US$59-billion in August, almost 12% better than the low hit in October, 2005.

Wichita, with its huge aerospace industry, and Kansas have gone along for the ride, with state exports hitting a new record of US$10.3-billion in 2007 for the third year in a row.

The biggest problem faced by Mayor Carl Brewer was finding the staff to fill the thousands of new positions at companies such as Hawker Beechcraft Corp., Bombardier Inc.'s Learjet and Spirit AeroSystems (part-owned by Canada's Onex), which ring the city's airport.

Some 6,800 jobs have been created this year, driving the city's unemployment rate down to between 3% and 4%.

Stephanie Kaiser, a waitress at the Whiskey Creek Wood Fire Grill in Wichita's Old Town, where the steak knives are as big as axes and the wines have names like Wild Horse Cabernet Sauvignon, is one of the beneficiaries of the jobs boom.

The tips she has earned from the aerospace workers who have filled the steak house nightly have been helping put her through university.

Next year, Mayor Brewer says he needs to find about 10,000 new workers for products set to come on stream and 1,000 every year after that until 2015.

"Currently, we can't find enough engineers," he said in an interview at Wichita City Hall.

For Cessna, owned by Textron Inc., markets such as Europe, Russia and Brazil have been driving demand. Some 68% of its orders have come from outside the United States in recent years.

Its order backlog stands at a record US$15.6-billion, after 770 orders last year and 387 business-jet deliveries, including the Citation X, the world's fastest non-military jet on the market. It nudges the sound barrier at Mach .92.

But with once-booming emerging markets being sideswiped by the U. S. credit crisis and the plunge in commodity prices -- not to mention a 15% recent rebound in the greenback -- the outlook is far from rosy for U. S. exporters.

Mr. Trammell has already begun to feel the slowdown. His banner year for exports was 2003, when 66% of his manufacturing capacity was shipped outside the United States, a big chunk to China. Sales then doubled from 2006 to 2007 as the agricultural boom boosted domestic sales for his conveyor belts.

But business began to fade through the end of the summer and Mr. Trammell had to cut back staff hours. "Business is 40 hours, which is something we've never done before," he said. "It's always been 45-plus in the factory."

Still, Cessna is ploughing ahead with its plans. The company is set to start construction on a new 600,000-square-foot production facility at the end of the month and is on track to raise business-jet deliveries to 470 this year and 535 in 2009.

The long cycle of aircraft development can be both a beast and a boon for the aerospace industry. Orders can dry up mighty fast but a company that continues to invest will be prepared when the business cycle picks up.

Mr. Pelton says there is one major emerging market where the private jet has yet to make inroads and holds enticing possibilities for the future --China.

So far, Cessna sales to China have been to government agencies and training facilities as the country's airways are still not open to the public.

"Once that starts occurring there certainly is enough individual wealth out there to create demand," Mr. Pelton said.

Like many in San Diego, though, faith in the U. S. government is fading fast in Wichita.

"I have real concerns and [they are] not with either one of the [presidential candidates]," said Mr. Pelton. "The real issue of how government works is [my concern]. Can the parties come together with some agendas they both agree on and work to the common good to get those agendas to move forward? That's what we are not doing today as a nation. It's so bipartisan that nothing is happening in Washington, D. C. Hopefully, whoever is elected will provide the leadership to cause both sides to come together."

Financial Post Published: Saturday, October 18, 2008 www.financialpost.com

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SBA Offers New Online Training for Exporters

 A new online course will help small businesses explore exporting opportunities in international markets. Global Enterprise: A Primer on Exporting is a free, self-paced course that provides practical guidance on exploring international markets.

The new course is available from the Small Business Administration training Web site at www.sba.gov/training. To access the course, click on "Free Online Courses," and then select the first course listed under International Trade.

The course is a comprehensive training module using script and audio to provide fundamental information about selling in global markets. It illustrates how to identify international markets, develop an export strategy, make and receive international payments, and finance trade operations, plus guidance on determining a firm's readiness and suitability for exporting. The Exporting Primer includes more than 45 direct links to many key international resources.

Exporting can be an avenue to tap into the increasing global marketplace. There are some 236,000 small business exporters, representing 97% of all U.S. exporters,and they generate some 30% of export sales. In 2007, U.S. exports of goods and services amounted to $1.6 trillion, with small businesses accounting for nearly $500 billion of those exports.

"The advantages to exporting can mean big opportunity for entrepreneurs that want to capitalize on emerging markets worldwide," said SBA Acting Administrator Sandy K. Baruah. "The SBA recognizes the value of reaching out to small businesses early in the trade game by using technology that is readily accessible and easy to use."

In addition, the SBA's partnership with the U.S. Department of Commerce and the Export-Import Bank offers federal export programs and services through the U.S. Export Assistance Centers. Small businesses can receive a full range of business export assistance under one roof to makes it easier to get the help needed to compete and succeed in the global marketplace.

"More now than ever, small business exports play a major role in our economy," said Luz Hopewell, SBA Director of International Trade. "Through the new online exporting course, the SBA will be able to help more small businesses access new markets, sell more goods overseas, and create new jobs at home."

Course participants completing the 30-minute online training programs can earn a certificate of completion from the SBA, with their name, date and course title. The Export Primer course is one of nearly 30 online tutorials offered by the SBA on its virtual campus, the Small Business Training Network (www.sba.gov/training). SBTN is part of the SBA's Office of Entrepreneurship Education (OEE), which combines the agency's online education programs, youth outreach, and outreach to underserved markets under a single umbrella.

SOURCE: U.S. Small Business Administration (SBA)

WASHINGTON, Oct 14, 2008

U.S. Small Business Administration (SBA)  Cecelia Taylor, 202-401-3059   http://www.sba.gov/news

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

U.S. High Tech Exports, Support 900,000 Jobs.

Idaho topped Washington by $300 million in high-tech merchandise exports last year, with both states cresting the $3 billion-a-year mark, according to a study released last month. Total U.S. high-tech exports fell by 3 percent, however, to $214 billion, the data showed.

The study, titled “Trade in the Cyberstates 2008,” looks at high-tech trade flows at the national level and tech-goods exports for all 50 states, the District of Columbia, and Puerto Rico. It was conducted by AeA, which claims to be the nation’s largest technology trade association, with 2,500 member companies representing all facets of the high-tech industry.

The study found that Idaho and Washington had $3.3 billion and $3 billion in high-tech exports last year, respectively, ranking 16th and 20th nationally. Idaho’s high-tech exports increased by $695 million, or 27 percent, over 2006, while Washington’s grew by $43 million, according to the data.

AeA notes, though, that 70 percent of all exports from Idaho are high-tech exports, the second-highest tech-export concentration in the nation, and the vast majority of those exports—$2.8 billion worth—are semiconductors. Just 5 percent of the exports from Washington are tech exports, ranking it 45th nationally.

The organization says 13,500 jobs in Idaho and 12,400 jobs in Washington are supported by tech exports.

“Idaho has a strong semiconductor industry that makes up the majority of the state’s exports,” and the jobs in the state that the industry supports pay well, says Terry Byington, executive director of AeA’s Lynwood, Wash.-based Washington Council, which represents Idaho.

Along with its high ranking for semiconductor exports, Idaho ranked 26th in exports of computers and peripherals, at $350 million, and 38th in industrial-electronics exports, at $84 million. 

J.D. Hammerly, chairman of AeA’s Washington Council, says, “When most people think of Washington’s high-tech economy, they think of one thing—software, but tech manufacturing exports from Washington have been steadily growing for five straight years.” Altogether, they’ve increased 27 percent over that period, AeA says.

Last year, Washington ranked sixth nationally in consumer-electronics exports, at $269 million; 13th in electromedical equipment exports, at $344 million; and 14th in industrial electronics exports, at $794 million. Canada was the state’s top export destination, at $540 million, followed by The Netherlands, at $286 million, and Taiwan, at $255 million.

High-tech is the single largest merchandise export sector in the U.S., representing 18 percent of all U.S. exports to the world, AeA says.

 Yet, while total U.S. high-tech exports fell 3 percent to $214 billion last year, high-tech imports rose by that same percentage to $333 billion, resulting in a high-tech trade deficit of some $120 billion, the organization’s study shows.

“Trade is critical for the U.S. high-tech industry and for every state’s economy,” says Christopher W. Hansen, the organization’s president and CEO.  “The bad news is that U.S. tech exports declined slightly in 2007.  The good news, however, is that tech exports rose in 29 states. These exports support nearly 900,000 American jobs—an often overlooked fact.”

Among the 29 states that saw tech export growth last year, Virginia, Florida, Idaho, New Jersey, and Utah had the highest percentage gains. 

California was the leading high-tech export state with $48.2 billion in exports, followed by Texas with $35.9 billion. California, Texas, and Colorado had the largest decreases.

The largest overseas markets for U.S. high-tech exports last year were the European Union, $46.6 billion; Canada, $29.4 billion; Mexico, $26 billion; China, $14.5 billion; Japan, $11.9 billion; and Singapore, $9.2 billion. 

The fastest-growing export markets having $1 billion or more in U.S. tech exports between 2006 and 2007 were Portugal, the Domin ican Republic, Belg ium, Colombia, and Argentina.

On the other side of the trade picture, the U.S. imported the most high-tech products from China, at $112.3 billion; Mexico, $51.3 billion; the European Union, $33.4 billion; Japan, $29.2 billion; and Malaysia, $25.1 billion. 

High-tech was the second largest import sector, just behind energy products. The largest high-tech import subsectors last year were computers and peripheral equipment, $103.2 billion; communications equipment, $74.0 billion; and consumer electronics, $54.4 billion.

Spokane Business Journal - Special Report http://www.spokanejournal.com/spokane_id=article⊂=3762

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VW South Africa wins $2 bn filter export contract

Volkswagen South Africa, along with catalytic converter and exhaust systems manufacturer Eberspächer SA, have been awarded a $2 billion contract to supply the Volkswagen Group with diesel particulate filters for the next five years.

"It is a coup for the South African automotive component manufacturing industry," Volkswagen SA managing director David Powels said in a statement this week, adding that the deal was one of the biggest export contracts for a single part ever awarded to the company.

A diesel particulate filter is a device designed to remove diesel particulate matter or soot from the exhaust gas of a diesel engine. The component forms part of the latest common rail engines manufactured by the Volkswagen Group.

Volkswagen SA and Eberspächer SA, who will share the production volume, are to invest approximately R55-million in tooling and equipment to manufacture the parts. In addition, the investment in the national supplier base - 80% of whom are based within the Nelson Mandela Bay region (greater Port Elizabeth) - will be approximately R26-million.

The new contract will secure more than 100 jobs in the region, with intensive training of operators and quality personnel to ensure that strict international standards on diesel particulate filters are met.

The training will include processes involved, particulate filter handling and inspection criteria, quality requirements, important part characteristics, world-class manufacturing, tool change skills, effective problem solving and team work.

"The skills transfer opportunities from this contract are significant," Powels pointed out.

At the forefront

According to the statement, Volkswagen SA and Eberspächer SA are at the forefront of diesel particulate filter manufacture, having secured access to the most modern manufacturing method, known as calibrated stuffing, which encompasses new laser measuring and sizing technologies.

"This is the benchmark in the Volkswagen Group and will benefit the South African catalytic converter industry as a whole," said Powels, adding that production would commence in November this year.

The parts will be shipped to the Volkswagen Group's Kassel plant in Germany, where they will be completed and sent to various user plants in the group's global network.

"The decision to award the contract to Volkswagen SA proves emphatically that South Africa can be globally competitive in terms of pricing and technology, even when measured against the best global players in the diesel particulate filter industry," said Volkswagen SA purchasing division head Karlheinz Hell.

Benchmark for the future

Eberspächer SA managing director Henry Eksteen said the project was unique in its approach of co-operation and utilisation of manufacturing capabilities of two companies.

"This type of parallel project, we believe, will become the benchmark for the future, where an [original equipment manufacturer] can join forces with a specific technology partner to optimise processes and, thereby, be able to gain access to global business for their region and country," he said.

Eksteen added that the diesel particulate filter technology was a rapidly advancing field of expertise, and with global emissions standards becoming more stringent, the company would strive to remain a provider of innovative exhaust gas treatment solutions through their global research and development teams.

"We are very proud to be involved in this joint program with Volkswagen SA and look forward to further enhancing our presence with global platforms such as this one," he said.

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

Volkswagen South Africa

Volkswagen South Africa, along with catalytic converter and exhaust systems manufacturer Eberspächer SA, have been awarded a $2 billion contract to supply the Volkswagen Group with diesel particulate filters for the next five years.

"It is a coup for the South African automotive component manufacturing industry," Volkswagen SA managing director David Powels said in a statement this week, adding that the deal was one of the biggest export contracts for a single part ever awarded to the company.

A diesel particulate filter is a device designed to remove diesel particulate matter or soot from the exhaust gas of a diesel engine. The component forms part of the latest common rail engines manufactured by the Volkswagen Group.

Volkswagen SA and Eberspächer SA, who will share the production volume, are to invest approximately R55-million in tooling and equipment to manufacture the parts. In addition, the investment in the national supplier base - 80% of whom are based within the Nelson Mandela Bay region (greater Port Elizabeth) - will be approximately R26-million.

The new contract will secure more than 100 jobs in the region, with intensive training of operators and quality personnel to ensure that strict international standards on diesel particulate filters are met.

The training will include processes involved, particulate filter handling and inspection criteria, quality requirements, important part characteristics, world-class manufacturing, tool change skills, effective problem solving and team work.

"The skills transfer opportunities from this contract are significant," Powels pointed out.

At the forefront

According to the statement, Volkswagen SA and Eberspächer SA are at the forefront of diesel particulate filter manufacture, having secured access to the most modern manufacturing method, known as calibrated stuffing, which encompasses new laser measuring and sizing technologies.

"This is the benchmark in the Volkswagen Group and will benefit the South African catalytic converter industry as a whole," said Powels, adding that production would commence in November this year.

The parts will be shipped to the Volkswagen Group's Kassel plant in Germany, where they will be completed and sent to various user plants in the group's global network.

"The decision to award the contract to Volkswagen SA proves emphatically that South Africa can be globally competitive in terms of pricing and technology, even when measured against the best global players in the diesel particulate filter industry," said Volkswagen SA purchasing division head Karlheinz Hell.

Benchmark for the future

Eberspächer SA managing director Henry Eksteen said the project was unique in its approach of co-operation and utilisation of manufacturing capabilities of two companies.

"This type of parallel project, we believe, will become the benchmark for the future, where an [original equipment manufacturer] can join forces with a specific technology partner to optimise processes and, thereby, be able to gain access to global business for their region and country," he said.

Eksteen added that the diesel particulate filter technology was a rapidly advancing field of expertise, and with global emissions standards becoming more stringent, the company would strive to remain a provider of innovative exhaust gas treatment solutions through their global research and development teams.

"We are very proud to be involved in this joint program with Volkswagen SA and look forward to further enhancing our presence with global platforms such as this one," he said.

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US charges Dubai firms over illicit Iran Exports

NEW YORK/DUBAI // Five Dubai-based companies are among 16 firms and individuals charged by the United States with exporting “dual use” items to Iran that could be used to make weapons and explosives.

Eight individuals and eight companies based in Malaysia and Iran as well as Dubai have been accused of buying US-made goods and transporting them to Iran through countries including the UAE, Malaysia, England, Germany and Singapore.

A sealed indictment issued by a federal grand jury on the seventh anniversary of the September 11 attacks, unsealed late Wednesday, alleged there was a case to answer.

Iran is subject to UN sanctions related primarily to material used in the manufacture of weapons of mass destruction, in addition to unilateral sanctions imposed by the United States, which prohibit the sale of most goods of US origin to the Islamic republic. The charges relate only to alleged violations of the unilateral US embargo.

Saeed al Marri, the deputy director of the Federal Customs Authority, said the UAE was committed to upholding sanctions imposed through the United Nations.

“If there is a UN resolution regarding certain goods not going to Iran, we will uphold it,” he said.

The electronic items which the five UAE-based firms are accused of exporting to Iran are “dual use” products that could have civilian or military applications.

The US has previously accused Iran of using such items to manufacture the improvised explosive devices (IEDs) that have been responsible for the deaths of US soldiers in Iraq and Afghanistan.

Nasser Hashempour, the vice president of the Iranian Business Council in Dubai, said the historical business, cultural and family links between the GCC states and Iran meant the United States was seriously challenged in imposing unilateral sanctions in this region, especially on dual-use goods easily obtained by civilians.

“An individual can buy something from a supermarket here and take it to Iran,” he said. “How can you stop that? It is untraceable.

“The ties between Iranians and the Gulf countries are unbreakable. Unfortunately, in a very unprofessional way, the US has approached businessmen here and asked them not to trade with Iran, which I don’t think would ever work in this region.”

In a separate development, the US Treasury said it would impose sanctions on six Iranian military companies because of their roles in Iran’s nuclear and ballistic missile programmes.

“The US government is wielding a powerful array of authorities against Iran’s proliferation supply chain,” Adam Szubin, director of the US Treasury’s foreign assets control office, said.

“In concert with today’s unsealed indictment against Iran’s suppliers and middlemen, [the] Treasury is levying sanctions against Iranian military end-users that procured goods from those named in today’s indictment.”

The indictments came after a two-year investigation following a 2006 case involving the Dubai-based Mayrow General Trading, which the US accused of diverting controlled US goods to Iran that found their way into bombs used in Iraq. The company, which still has an address and phone number listed in Deira, could not be reached for comment yesterday.

As well as Mayrow General Trading, the recently charged companies include Dubai-based Atlinx Electronics, Micatic General Trading, Madjico Micro Electronics and Al-Faris. Also charged were Neda Industrial Group, an Iran-based business, and Eco Biochem and Vast Solution of Malaysia.

The US is seeking the extradition of eight individuals currently overseas but authorities did not say if they had been arrested. They were Ali Akbar Yahya and Farshid Gillardian, both Iranian nationals who are naturalised British citizens; FN Yaghmaei, Bahman Ghandi and Ahmad Rahzad, all Iranian nationals; Kaam Chee Mun, a resident of Malaysia; Djamshid Nezhad, a resident of Germany, and Majid Seif, an Iranian national residing in Malaysia.

The US authorities are still investigating the case and have appealed to people with knowledge of the companies’ activities or the individuals to contact them. Some of the charges against individuals, relating to violations of the Iran Trade Embargo, carry sentences of up to 20 years in prison.

Sharmila Devi and Gregor McClenaghan

http://www.thenational.ae/article/20080918/NATIONAL/307082198/0/art

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