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South African sourcing from China

Tuesday 30 April, 2013

The Durban Chamber of Commerce hosted a presentation by Cardinal Global Trading Ltd (CGT) on trade with China, which turned out to be a commercial for their China Trade Services.  CGT works with South African firms to source products from China.  They claim to be able to help their clients avoid the “hidden costs” of enabling a supply chain which includes China.

Here’s their presentation: China Trade Service Presentation Business in China does not take place in isolation.  The emergence of the BRICS consortium puts this into context, & now provides an opportunity to exploit.  Foreign products flooded the South African market in the 1990’s after apartheid fell.  Surprisingly the government did not erect any protectionist barriers to cheap foreign imports, so the flow proceeded unimpeded.

CGT has a sales office in Durban & it’s operations office is in Beijing.  Their role is to validate Chinese manufacturers, ship products, clear customs, & provide delivery to your desired doorstep.  They mitigate the risk of doing business with Chinese firms by doing extensive onsite quality inspections, & management, production facilities, & container load checks.  They make sure their clients do business in a legally sound way, verifying export licenses, etc.  Their staff is fluent in English & Mandarin Chinese in China.  They’ve found that potential suppliers in China are rebellious if they are hiding something, while those who have nothing to hide are much more open.  Shipping is their biggest problem, i.e. the client in South Africa ordered 1 thing, & something else was delivered.  To rectify these situations, they check every step of the way.

CGT was founded in 2007 when they brokered the sale of manganese from Zambia to China.  In 2010 they brokered manganese ore & chrome from South Africa to China.  Other products they’ve dealt with thus far are industrial products, such as grinding rods, belts, chemicals, agricultural goods, textiles, paint, gloves, etc.

The biggest reasons to work with CGT are:  they are on the ground in China, offer a quality solution, & are a turnkey operation.  In the future they plan to enter markets such as India, Taiwan, VietNam, & Malaysia, & export products back into China as well.  Their commission fees run 3-7% with a 30% deposit & 70% due upon shipment via letters of credit.  CGT can work with companies without an importer code because they can use their own.  Minimum order size is 1 container load.  Lead time for them is 7-10 weeks.  Their focus is specifically on serving the needs of customers in/around Durban & the province of KwaZuluNatal.

Q&A
•    Alibaba.com does not do the groundwork that CGT does.  Their access is limited to a certain extent.  In many cases, the 1st internet order is OK.  Then after trust is established, the 2nd order disappears.
•    Exclusivity depends on the product.  CGT works with different factories for different clients.
•    In the event of a problem, CGT will compensate/credit clients up to 100% of the value of a defective transaction.
•    Quality control inspectors ensure standardized products.
•    CGT works with the best freight forwarders & you can get competitive quotes from them.

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