1. SAPO Strategic Direction
South African
Port Operations
SAPO Strategic Direction
And BEE Opportunities
Presented by: Tau Morwe
CEO
Business Unit: S A Port Ops
Date: 21 October DBN
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2. Transnet Divisions & Subsidiaries
South African
Port Operations
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3. Background To SAPO
South African
Port Operations
Divisionalisation split Portnet into 2 independent units
South African Port Operations (SAPO) and
The National Ports Authority of South Africa (NPA)
An independent & sustainable SAPO culture was developed
A Corporate office, infrastructure and support systems were set up
Forums were set up to engage customers (BLOF, CLOF, etc
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4. Key Strategic Objectives
South African
Port Operations
Establish business planning & performance management as key business behaviours in the Business Units
Confirm the definition & complete ring-fencing of businesses
Increase the market value of cargo handling Business Units
Ensure business processes that are efficient and of a high quality
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5. Key Strategic Objectives (Cont.)
South African
Port Operations
Develop and activate a consolidated capital investment plan for Business Units
Establish effective communication mechanisms with key Clients
Develop the managerial & operational competency of SAPO staff in line with Transnet/SAPO equity and gender objectives
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6. SAPO Profile Primary business: Terminal operation in the ports of SA
South African
Port Operations
Primary business: Terminal operation in the ports of SA
• Container Terminals (3)
• Bulk Terminals (2)
• Multi-purpose (Breakbulk) Terminals (6)
• Car Terminals (2)
Services Offered:
• Handling of Cargo
• Storage of cargo
• Logistics Management Solutions
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7. SAPO Profile (Continued)
South African
Port Operations
Major Customer Clusters:
• Shipping Lines • Motor Industry
• Agriculture • Coal
• Granite • Metals
• Timber and forest products
Volumes and Market Share:
• Containers: ,1 million TEU’s %
• Bulk: ,5 million tons %
• Multi-purpose: 15,6 million tons %
• Cars: units %
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8. SAPO’s Performance
South African
Port Operations
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9. Major Bulk Commodities Exported Through SA Ports
South African
Port Operations
Port
Major Bulk Commodities
Volume million tons
Source
Approx. distance from source
Richards Bay
Durban
Port Elizabeth
Cape Town
Saldanha
Coal
Wood Chips
Rock Phosphate
Chrome ore
Steel
Timber
Coal and coke
Chemicals
Manganese Ore
Prepared Fruit
Iron ore 67
4.1
0.3
0.8
2.2
0.4
1.8
0.6
1.7
24.9
KZN/Mpumulanga
Nelspruit
Phalaborwa
Rustenburg
Middelburg
Pinetown
Welkom
Secunda
Meyerton
Ceres
Sishen km
585km
806km
721km
856km
30km
546km
569km
952km
110km
993km
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10. The Players involved in the Multinational Transportation of Containerised Cargo have a common objective for this Logistics Chain
South African
Port Operations
THE “PORT”
In 1999, the World’s Top busiest Container Facilities and Terminals were:
Hong Kong, China
Singapore
Pusan, South Korea
Kaosiung, Taiwan
Rotterdam, Netherlands
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11. Intermodal Diversification
Trends in the Logistics of Commodities indicate increasing Containerisation as one of the Six Major Trends
South African
Port Operations
Intermodal Diversification
Containerisation and Efficiency Increases
MAIN TRENDS IN LOGISTICS OF COMMODITIES
Alliances
- Strategic Partnering and Merging
Increasing Globalisation of the Economy and the flows of commodities
Increasing Demand for Advanced Information Systems
Increasing concern for the Environment
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12. World And South African Trade Volumes
Port Operations
Growth in container volumes is unprecedented
Worldwide growth projections (pessimistic view)
1995 – 142 million teus
2000 – 222 million teus (56% growth over 5 years)
2005 – 306 million teus (38% growth over 5 years)
2010 – 391 million teus (28% growth over 5 years)
Source: Ocean Shipping Consultants, The World Port Container Market to 2010
South African container volumes have grown significantly
Durban - From 887,000 in to 1,422,000 teus in 2003 (62%)
Cape Town - From 319,000 in 1995 to 538,000 teus in 2003 (59%)
Port Elizabeth – From 157,000 to 263,000 teus in 2003 (60%)
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13. The South African Container Terminals are NOT situated on the major East / West container liner trade routes thus limiting the opportunities for large volume growth but are however strategically positioned on trunk routes serving the Southern hemisphere
South African
Port Operations
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14. World Areas IMPORTS % of Cargo
MARKET SIZE/PRODUCT MIX The dominant markets for imports lie in the Far East and Europe
South African
Port Operations
World Areas
IMPORTS
% of Cargo 5%
23%
13%
31% 7% 8%
11%
2% OTHER
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15. World Areas EXPORTS % of Cargo % of Cargo
MARKET SIZE/PRODUCT MIX The dominant markets for exports also lie in the Far East and Europe
South African
Port Operations
World Areas
EXPORTS
% of Cargo
% of Cargo 8%
38% 3%
43% 4% 3% 1%
0% OTHER
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16. S A Container Growth Volumes per Terminal
South African
Port Operations
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17. Durban Container Terminal Actual & Expected Growth
South African
Port Operations
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18. Private Sector Involvement In World Wide Port Operations
South African
Port Operations
In excess of 70% of Container Handling Capacity is under Private Sector Control (250 million TEU of 350 million TEU)
Africa Container Handling Status
54 countries in Africa
39 with direct access to Sea
90 sizable ports – 52 handle containers
In 2001, African ports handled:
6 % of world wide water borne traffic
3 % of worldwide container traffic
13 % of worldwide population resides in Africa
Less than 10% of capacity under private sector control
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19. SAPO Capital Investment Plan (Rm)
South African
Port Operations
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20. are affected by a ports standing in 4 key areas
Port requirements for container terminals show that shipper requirements
are affected by a ports standing in 4 key areas
South African
Port Operations
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21. Black Economic Empowerment
South African
Port Operations
Black Economic Empowerment
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22. SAPO Procurement Philosophy
South African
Port Operations
Pursue optimum value and efficiency
Adopt best purchasing practices
Ensure open, equitable and fair competition with due regard to
- Transnet Policy
- Black Economic Empowerment
- Promotion of local and regional enterprises
- Ethical and moral values
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23. BEE Targets As % Of Total Spend
South African
Port Operations
50%
50%
45%
30%
20%
For 2002/2003 SAPO spent R1 346 million, of which R600m was to BEE companies
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24. BEE Groupings BEE Spend is split into Black Business Enterprise
South African
Port Operations
BEE Spend is split into
Black Business Enterprise
Woman’s Business Enterprise
Disabled People’s Business Enterprise
Small Medium & Micro Enterprise
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25. Current BEE Products And Services
Stationery
Fuel
Fasteners (ie Bolts and nuts)
Consumables
Catering and refreshments
Minor Engineering
Steel
Tyres/tubes and puncture repairs
Petroleum Products
Electric motor rewinding
Auto spares
Straddle Carrier Parts
Computer consumables
Computer
Security
Labour brokers
South African
Port Operations
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26. Target BEE Products And Services
Major engineering
Electrical contractors
Capital equipment
Lifting components
Information technology
General engineering
Manufacturing
Armature winding
Engine repairs
Safety wear
Transmission repair
Office automation
Civil works
Plumbing
Sprockets and chains
South African
Port Operations
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27. Way Forward……. Our areas of focus will be:
South African
Port Operations
Way Forward…….
Our areas of focus will be:
To empower in those areas where our spend is low
To empower newly identified HDI’s
Automate our communication systems to ensure timely and usable
information for analysis in creating prosperous suppliers
Involve HDI’s in capital investment programmes
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28. South African
Port Operations
THANK YOU!
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