Transnet expands to the Middle East
Utility wants to depend less on South Africa
TRANSNET, the South African ports, rail and pipelines operator, is pursuing expansion on the continent and in the Middle East as the company seeks to redress an overdependence on its home market.
The state-owned utility wanted 25 percent of revenue to come from outside the country by 2025, acting chief executive Siyabonga Gama said on September 10. That compares with 4.2 percent of its R61.2 billion in the 12 months to March.
The company had started to form a new unit, Transnet International Holdings, which would oversee the foreign expansion, he said.
“We have a fairly good idea where it’s going to come from and how,” Gama said. “We are not just looking at Africa, we are also looking at the Middle East. There are a number of things that we are working on.”
Transnet leadership believes the company depends too much on South Africa, where it operates more than 20 000km of rail and facilitates 98 percent of South Africa’s global trade through its eight ports.
The opportunities for expansion included consulting, training and management contracts, as well as competing for, and operating concessions, Gama said. The international unit would be capitalised with “a decent amount” of funding, he said. Transnet last week signed a contract in Benin, to advise on the container terminal at the port there.
“We will try to improve their efficiencies, and we will make further investments once we have helped them with the port master plan,” Gama said. “It’s small but it indicates the direction that we are taking in a number of these markets.”
Transnet operates in Africa, including in Mozambique, Botswana, Zimbabwe and Zambia. Most of the foreign activities were rail-related, he said. Transnet also wants to invest in new natural-gas pipelines in South Africa, and elsewhere, including in Tanzania and Mozambique. – Bloomberg