South African Business 2020 edition

SPECIAL FEATURE
transported around the Cape of Good Hope every year: 32.2% of West
Africa’s oil and 23.7% of oil emanating from the Middle East.
South African companies are alert to this potential. More than
7 000 direct jobs were created in the Western Cape ship and rig repair
sector in 2015.
Port Elizabeth has positioned itself at the centre of the academic
side of the Oceans Economy. Nelson Mandela University launched the
Ocean Sciences Campus in 2017 and the South African International
Maritime Institute (SAIMI) has chosen the city as its base as it sets about
supporting the sector through research and training. SAIMI runs the
National Cadet Programme which is paid for by the National Skills Fund.
The curriculum for these institutions ranges from the law of the
sea, shipping and transport, to aquaculture, boat-building, oil and gas
exploration, repair and maintenance and environmental management.
The university has four marine sector chairs funded by the South
African Research Chair Initiative (SARChI) and the National Research
Foundation (NRF).
Special Economic Zones
South Africa has a number of licensed Special Economic Zones (SEZs),
some of which are called Industrial Development Zones (IDZs). The
best established of these are the coastal IDZs at Saldanha, Coega (Port
Elizabeth), East London and Richards Bay.
These areas are central to the Oceans Economy strategy because of
their strategic positions and the favourable environment created for
investment by specific legislation related to SEZ tariffs, tax deductions
and grants. The first illustration of national commitment to the strategy
came late in 2016 with the allocation by the Department of Energy of
two Liquefied Natural Gas (LNG) plant options, one each to the IDZs
of Richards Bay and Coega.
The Saldanha Bay Industrial Development Zone is central to a
plan to grow the oil and gas sectors although it was not allocated
a possible LNG plant. Large industrial operations already exist at
Saldanha and the Port of Saldanha Bay is the portal for the export of
South Africa’s iron ore. The SBIDZ is set to become a hub for a range
of maritime repair activities and oil rig maintenance and repair.
The ports of Ngqura and East London are well positioned to act
as container transit points and the skills set of the Eastern Cape’s
workforce, particularly in the automotive and automotive parts
sector, could be attractive to repairers and manufacturers in marine
subsectors. Both Eastern Cape IDZs have aquaculture sections. The
East London IDZ already has investors such as Pure Ocean Aquaculture
and Ocean Wise.
Durban’s annual throughput
of containers is about one-million,
more than 60% of the country’s
total. As part of Operation Phakisa,
the Port of Durban is upgrading
its dry dock and buying new
cranes to speed up operations.
There is also an ambitious plan
to dig out the old airport south of
the city, connect the big hole to
the sea and make it a harbour; this
would allow Toyota to roll their
new vehicles directly from the
factory floor to the hold of a ship.
The Port of Durban is already
home to a variety of maritime
companies. EBH-SA has been in
the business marine engineering
and repairing ships since it
began as Elgin Brown and
Hamer in 1878. To improve their
competitiveness, three South
African shipbuilders (SAS, Damen
Shipyards Cape Town and Nautic
Africa) have agreed to pool their
resources on contracts.
Cooperation pacts like this
one might be a good template
for the nation’s ports and the
rig/boat repair and servicing
sector. With the Angolan
and Mozambique oil and gas
industries growing bigger
every day, it is unlikely that one
port could cope with demand
anyway.
The Port of Richards Bay has
added a new berth on average
every second year. It has deepwater
infrastructure and the
huge Richards Bay Coal Terminal,
the country’s primary site of
export for coal. The Richards
Bay IDZ intends becoming an
energy hub.
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SOUTH AFRICAN BUSINESS 2020