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Southern Exposure

Exporting to South Africa and more.

In 1993, E. Gerald Parker started Cincinnati-based Pharmaceutical Sources International Inc. while working full time as a buyer for a food and drugstore chain. For two years, Parker, 53, spent his lunch hours at a local Department of Commerce office learning about exporting. In 1996, intrigued by the rapid and positive sociopolitical progress occurring in South Africa, he quit his job and began exporting health-care products to South African pharmacies and grocery stores.

Since the United States began lifting trade sanctions against South Africa in 1991, foreign companies have cautiously been returning to the nation. If you're considering exporting to South Africa, keep the following in mind:

South Africa boasts the most advanced and productive economy in Africa as well as a highly developed infrastructure. Over the past 50 years, the country's economy has diversified from diamond and gold mining to manufacmanufacturing, finance and business services, and commerce.

"South Africans are very interested in American products," says former assistant secretary of commerce Lauri Fitz-Pegado. South African youths, in particular, clamor for products with a "Made in the USA" label. "It's a young culture," she says, "and one that needs basic necessities, such as food, clothing and housing." U.S. franchises are also a hit--McDonald's and Toys "R" Us are two favorites. South Africa also has a rapidly growing tourism industry, so related products and services are popular.

According to the U.S. Department of Commerce, the best American export prospects for South Africa are industrial chemicals, computers and peripherals, software, drugs, and medical and pharmaceutical equipment.

Small-business owners who can't yet afford to open an office in South Africa should contact the Commerce Department in Johannesburg. The facility provides entrepreneurs with office space and equipment, secretarial assistance, research and information, and meeting space (fees were not available at press time).

In the wake of anti-apartheid sanctions, exporting to South Africa hasn't been a cinch for Parker. "Under sanctions, South Africa has learned to do business with other [nations]," he says. "Now we must compete with countries we didn't have to compete with before sanctions." However, says Parker, "[the experience] has strengthened our business by making us sharper businesspeople."

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This article was originally published in the July 1997 print edition of Entrepreneur with the headline: Southern Exposure.

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