Transnet’s division investing in new capacity and looking for opportunities on the continent

Transnet Port Terminals (TPT), South Africa’s leading terminal operator is poised to help drive Africa’s growth through investment in new capacity and collaborate with other ports on the continent on efficiency improvements. This is according to Zeph Ndlovu, General Manager for KwaZulu Natal at TPT.

Ndlovu was speaking at the Africa Ports and Harbour’s conference, which is taking place in Johannesburg this week. “South Africa is well positioned to service the world’s key trade routes as global trade recovers and TPT is preparing for this growth by investing in new capacity ahead of demand,” said Ndlovu. This is with reference to Transnet’s Market Demand Strategy, which will see TPT invest billions over seven years in new capacity and equipment. The programme is now in its third year.

TPT runs seven ports and 16 terminals across South Africa. These are the Durban Container Terminal and the Richards Bay Terminals in the KwaZulu Natal Region; the East London and Port Elizabeth Terminals including the Ngqura Container Terminal in the Eastern Cape Region; as well as the Cape Town Container Terminal and Saldanha Terminal in the Western Cape Region. TPT operates in four sectors namely containers, bulk, breakbulk and automotive. TPT container terminals combined currently handled over 4.5 million TEUs in the past financial year, the multi-purpose terminals loaded and offloaded over 11 million tons of breakbulk cargo, the bulk terminals handled 77 million tons of bulk cargo and the RORO terminals moved 690 000 cars. The operator has plans to diversify and grow into liquid bulk terminal operations.

Ndlovu notes that South Africa operates in a competitive landscape from key global ports and terminals, but the country is improving competitiveness which will enable TPT to attract and increase market and trade volumes. South Africa services the Southern African, Asian, European and South American trade routes. Therefore the country is ideally positioned to be a transhipment hub.

Ports and terminals compete on location, price, transit time as well as other factors such as port infrastructure and vessel turnaround time. An example of extreme points in world trade from Beunos Aires in Argentina to Singapore (which can either go via South Africa or the Suez Canal), South Africa offers a shorter distance and transit time and a lower risk of piracy for this route.

Ndlovu says growth in trade volumes will be primarily driven by the recovery of the global economy. Global trade will fuel Africa’s growth which will create opportunities for TPT in South Africa and elsewhere on the continent. Africa’s growth continues to be driven by demand for the continent’s minerals. This has led to continued investment in critical infrastructure such as energy, road, rail and ports. This is complemented by the growth of a youthful dynamic population of more than a 1 billion which has urbanized and is rapidly fuelling consumer demand.

Of all world merchandise trade, 90% is seaborne and of that, 50% is containerised. Port operators such as TPT play a vital role in facilitating global trade. South Africa houses 4 of the 14 development corridors identified by the African Union and this presents significant opportunities for TPT and the Transnet Group. Transnet is involved in the development of these corridors and TPT already plays an advisory role to a number of countries on the continent. TPT is also in search of opportunities to operate terminals in other markets on the continent, most notably East Africa and West Africa, as well in neighbouring ports such as Maputo.