Dur­ban’s boats STAY AFLOAT

Two sub­stan­tial in­vest­ments in the ship- and boat-build­ing in­dus­try in­ject much needed cap­i­tal into the ail­ing sec­tor

CityPress - - Business - PADDY HARPER busi­ness@city­press.co.za

Two pil­lars at di­verse ends of Dur­ban’s ship- and boat-build­ing in­dus­try have re­ceived a new lease of life as a re­sult of mul­ti­mil­lion-rand in­vest­ments that have pro­vided a wel­come respite from the pres­sure fac­ing the sec­tor. Both in­vest­ments – the ac­qui­si­tion of en­gi­neers and ship re­pair spe­cial­ists El­gin En­gi­neer­ing in Bay­head by Zungu In­vest­ments Com­pany, and that of leisure boat builder Aus­tral Marine by Nau­tic Africa – are set to bring sig­nif­i­cant change to a sec­tor that has taken a ham­mer­ing in the past five years.

El­gin, or Zungu-El­gin as the new en­tity is known, was born in Au­gust through a buy-out by Zungu In­vest­ments in con­junc­tion with the Na­tional Em­pow­er­ment Fund and the In­dus­trial Devel­op­ment Cor­po­ra­tion.

Zungu In­vest­ments chair­per­son Sandile Zungu be­lieves the ac­qui­si­tion of Dur­ban’s lead­ing en­gi­neer­ing com­pany, which is 67 years old, will both en­hance the group’s port­fo­lio and help bring sta­bil­ity to the sec­tor.

The com­pany spe­cialises in the man­u­fac­ture of medium- to heavy-duty equip­ment for a va­ri­ety of in­dus­tries, in­clud­ing petro­chem­i­cals and su­gar, and car­ries out ship re­pair work.

“Zungu-El­gin will act as a cat­a­lyst to ac­cel­er­ate black eco­nomic par­tic­i­pa­tion in the en­gi­neer­ing in­dus­try through own­er­ship, man­age­ment and con­trol. This will se­cure an en­gi­neer­ing in­dus­try that is di­ver­si­fied and in­clu­sive. The ad­vance­ment of women re­mains high on our trans­for­ma­tion agenda,” Zungu said at the launch of the com­pany.

The in­vest­ment car­ries se­ri­ous po­lit­i­cal clout and slots in with the vi­sion of in­vest­ment in crit­i­cal sec­tors of the econ­omy while trans­form­ing them, ac­cord­ing to the province’s Eco­nomic Devel­op­ment MEC Sihle Zikalala.

“It is en­cour­ag­ing to note that Zungu In­vest­ments, a black-owned com­pany, has yet again made in­roads into a sec­tor that holds im­mense po­ten­tial for turn­ing around the province’s eco­nomic for­tunes through job creation and skills trans­fer,” Zikalala said.

Not far from the Zungu-El­gin site in Bay­head, Aus­tral Marine, a pres­ti­gious lux­ury boat builder that man­u­fac­tures the Angler range of leisure craft, is gear­ing up to move into the se­cu­rity and mil­i­tary boat sec­tor af­ter it was ac­quired by Nau­tic Africa.

The Nau­tic in­vest­ment comes at a key time for Aus­tral, a fam­ily busi­ness started by Don­ald Jar­ratt and his brother Tony in 1986, which has faced tight times along with the rest of the leisure craft in­dus­try over the past five years.

Nau­tic CEO James Fisher be­lieves the move will help sta­bilise Aus­tral’s ex­ist­ing busi­ness, and give it ac­cess to new in­ter­na­tional mar­kets and new busi­ness through the com­mer­cial craft mar­ket.

Fisher says Aus­tral’s strong ex­ist­ing dealer net­work and its “im­pres­sive” man­u­fac­tur­ing process, most of which is in-house, is key to its suc­cess and is the main rea­son Nau­tic de­cided to buy the com­pany.

Aus­tral cur­rently pro­duces about six boats a week, and Fisher aims to dou­ble this ca­pac­ity that serves ex­ist­ing Nau­tic mar­kets, and to in­crease as the com­pany – whose craft cost from R300 000 to R800 000 – grows.

Fisher said the move into the in­dus­trial and com­mer­cial sec­tor would work in tan­dem with sus­tain­ing Aus­tral’s leisure craft brands.

Speak­ing to City Press at the Bay­head plant, which was packed with craft in var­i­ous stages of pro­duc­tion, Jar­ratt (70) said he be­lieved the move would ex­tend Aus­tral’s life by decades.

The com­pany em­ploys 65 staff, most of whom have worked there for more than 20 years, and Jar­ratt is happy that the their jobs will be safe­guarded by the move.

“I would hate to see this not sur­vive. It would kill me,” said Jar­ratt. “We’ve con­cen­trated on build­ing a skilled team of peo­ple who are di­ver­si­fied enough in their tal­ents to tackle most chal­lenges.

“Most of the peo­ple we have here have been with us for be­tween 20 and 25 years, and re­ally know their job, which has given us a rep­u­ta­tion of pro­duc­ing ex­cel­lent boats, but the in­dus­try has been un­der pres­sure.

“This move will al­low us to grow our busi­ness through Nau­tic’s net­works, which will give us ac­cess to new mar­kets. At present, our busi­ness is sea­sonal. I wish it was busy like this all year round. This move will al­low us to sus­tain pro­duc­tion like this,” he said.

At present, Aus­tral is pro­duc­ing about 140 boats a year. Five years ago, the fig­ure stood at about 700 a year.

“We’ve had to build more ex­pen­sive units and sell fewer of them to keep up rev­enues,” said Jar­ratt.

LUX­URY LIV­ING Aus­tral Marine, a pres­ti­gious lux­ury-boat builder, is gear­ing up to move into the se­cu­rity and mil­i­tary boat sec­tor

Sandile Zungu

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