SA no longer only gateway
East, West Africa also catching up
SOUTH Africa was no longer the only gateway into Africa as other ports elsewhere in the continent were heavily investing in infrastructure making the trade business more competitive.
This is according to Jonathan Horn, the managing director for Mearsk Line Southern Africa.
Horn said yesterday, during the group’s global results report in Durban, that ports in east and west Africa were slowly catching up with South Africa’s ports.
Horn said although South Africa made up a sizeable proportion of the Mearsk business, “it was no longer the only gateway to the continent”.
“If you look at the emerging markets of West and East Africa, they are slightly smaller, but their growth rates there are increasing significantly and on a much higher level.”
“It is certainly not the only gateway to Africa anymore. It is an important gateway and would continue to be so but its not the only gateway,” he said.
Transnet Port Terminal (TPT) is in charge of all the seven ports in the country.
The biggest of the seven ports being the Port of Durban.
All seven commercial South Africa’s ports handle about 7.4 million twenty-foot equivalent units (TEUs) per annum.
The Port of Durban houses the Durban container terminal, which handles about 2.7 million TEUs of cargo a year.
Mearsk, which is one of Transnet’s biggest customers and the world’s largest shipping liner, said in its global results report that the volume of imports and exports into South Africa fell by 3 percent in 2014, which was attributed to the lack of demand as well as mining sector strike.
Mearsk said trade within the African market, excluding South Africa, was expected to grow around 10 percent over the next five years.
“From February and as a clear signal of Mearsk Line’s commitment to the African continent and our view of the growth potential, we have launched a direct vessel service from South Africa to both west African coast and the Middle East,” said Horn.
Jim Farara, the deputy head of Africa liner operations cluster at Mearsk, agreed that ports were getting more competitive in terms of infrastructure expansion as well as efficiencies.
“What is important is that we get value for money, when rates are going up we need to see the productivity improvement,” Farara added.
“As a shipping liner we are looking for good productivity rates and pay for that. If the rates are inflationary they should at least be linked with productivity in that port, we have seen satisfactory improvement in Durban when compared with other ports.”
Capital projects
Transnet plans to spend about R17 billion in capital projects in the Port of Durban in the next seven years, this will include deepening of the berths in the busiest and biggest part of the port, Pier 2.
Horn was also impressed by the amount of work done by TPT in the Durban container terminal. “The amount of work done by Transnet, in terms of infrastructure at its ports was encouraging.”
He said it was like living in the house that was going through renovations.
“We know that there is a bigger price down the line and we work closely together to make sure the disruption was minimal.
“Of course it is not pain free but we work together to minimise that.” He added that expansions were happening a little bit ahead of the curve and the worst thing that one could do is to run of capacity and then you had to start building.