Country Risk Analysis: Republic of South Africa The case of Snetor in Southern & Eastern Africa

Details

Supervisors

Defraigne, Jean-Christophe

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion

Abstract

The aim of this thesis is to assess whether South Africa is a promising country for the French SME (Small and Medium Size Entreprise) such as Snetor. Indeed, the company opened a new branch in Johannesburg betting on the future growth of the Austral African markets. Snetor has been present in Africa since 1981 but decided only recently to initiate some operations in Southern and Eastern Africa. The core business of the firm is the trading of polymers and chemical commodities in Africa, Europe, and Latin America (Snetor Chimie, s.d.). Indeed, the African continent hosts a booming industry full of potential but also facing upcoming challenges. Even though there is a growing demand for plastic products (AMI, 2017), new regulations and environmental considerations are also part of the equation reshaping the whole industry. Based on readings from scholars, private companies or public organizations, I will apply a Country Risk Analysis (CRA) to South Africa in order to outline the main risks faced by the country. I will lay particular attention on the risks that would hinder Snetor’s operations and development but also opportunities arising for the CRA. The first part of this thesis will start with the methodology of CRA, its history and its purposes. The different aspects included in a CRA will be outlined such as political, economical & financial and social & environmental risks. Then, a sub-part will be dedicated to the risk assessment and management in emerging markets, with organizations involved in the process such as rating agencies or insurance companies. In the second part, a CRA will be applied to South Africa covering economic, financial, commercial, political, social, human and environmental aspects. The goal is to give a complete overview of South Africa’s risk situation and lay the emphasis on risks that might affect the polymer industry and the firm’s performance. Finally, the last part will tackle the case of Snetor by selecting some key risks exposed in the second part and assess their impacts on the company. From these selected risks, methods to mitigate such risks will be described as well as opportunities arising in order to ensure stable growth in the upcoming years. Finally, it will be explained why South Africa and more precisely Johannesburg, are both the current hubs for companies willing to run operations either in the country or in South and Eastern Africa.