SPECIAL FEATURE Ports
SPECIAL FEATURE Ports and exports: KwaZulu-Natal has an abundance of both Companies in a wide range of sectors are seeing potential in Africa and China. A new era in trade and export has begun and the traders, logistics operators and ports of KwaZulu-Natal are in pole position to take up new opportunities. Not only is the province strategically located on the Indian Ocean but it already has excellent infrastructure which is being upgraded and improved. The official date for the new era was 1 January 2021 for that date marked the launch of the African Continental Free Trade Area (AfCFTA). All but one of Africa’s 54 countries have signed the agreement and a majority of countries have ratified it. Implementation was postponed for six months because of Covid-19. Tariffs on 90% of items are due to be reduced in the next decade although more time has been allocated to poorer countries to allow them time to adapt. The African market of 1.3-billion people is expected to grow to 2.5-billion by 2050 but the key statistic targeted by AfCFTA is intra-African trade. Credit: TNPA Exports to the rest of the world made up between 80% and 90% of Africa’s total trade from 2000 to 2017 (UNCTAD). In 2019 about 27% of South Africa’s exports were delivered to the rest of the continent. As part of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), South Africa is already part of the most active regional bodies which are promoting integration and intra-regional trade. These regional groupings are best placed to start thinking beyond tariffs: more efficient customs posts, lower air-freight costs, better-run ports, regulatory alignment and improved rail and road infrastructure. Even before AfCFTA was signed, one of the largest independent wire manufacturers in the country, Hendok Group, set about steadily increasing its exports to other African countries. With more than 1 000 employees at the factory in the Phoenix Industrial Park in Durban, the company makes a number of types of wires and is the country’s biggest producer of nails. KWAZULU-NATAL BUSINESS 2021/22 18
SPECIAL FEATURE Donald Trump’s interests did not stretch to Africa during his presidency of the US but he preferred bilateral, rather than regional agreements so it is surprising that the African Growth and Opportunity Act (AGOA) survived the Trump years. The deal, which gives duty-free access to about 6 500 products from 39 Sub- Saharan countries, is due to expire in 2025. As much as African countries’ trade within the continent will grow, exports will remain key to adding value and attracting good prices. Trade between the US and Africa in 2018 was valued at .2-billion. Awards and China Opening up new markets is a priority for local business leaders. The Durban Chamber of Commerce and Industry partners with Transnet Port Terminals (TPT) in hosting the annual KwaZulu-Natal (KZN) Exporter of the Year Awards. At the 2019 ceremony, Durban Chamber Deputy President Gladwin Malishe said, “With the global economy in a state of flux and several developed economies becoming more protectionist, KwaZulu-Natal and our emerging exporters need to scout for non-traditional points of entry into the global market, which are more open and have more liberal trade policies and procedures such as China. This is an ideal time to visit a growth market like China if you have export aspirations, hence the theme for our event being Shanghai Nights.” The award winners on that occasion offer a good sample of the strength and variety of the provincial economy. Winners included Imperial Armour (body armour), Sappi (forestry and paper), Sumitomo Rubber (tyres) and the Mediterranean Shipping Company. Finalists came from sectors as diverse as engineering, condiment-making and boat-building. Approximately 220 TEU equivalent containers (20-foot containers) of Sappi products pass through the Port of Durban every day. At the awards evening, the Emerging Exporters Development Programme was launched, a joint initiative by TPT and the Durban Chamber to develop emerging exporters. The first beneficiaries were Get2Natural Beauty; Gugu Mobile Boutique; Samac Engineering Solutions; Siyazenzela Trailers & Truck Bodies and Zikhe. The award for small and medium exports (a new category) was sponsored by the Small Enterprise Development Agency (Seda KZN). One of the event sponsors, Trade & Investment KwaZulu-Natal (TIKZN), is an agency dedicated to promoting the province as an investment destination and to facilitating trade by helping local companies to gain access to international markets. In 2020, 103 export opportunities were created with 20 companies enrolling for the exporter competitiveness programme. This initiative sustained 1 605 jobs, according to the Provincial Government of KwaZulu-Natal. Another awards ceremony, organised by the South African Capital Equipment Export Council (SACEEC) and Specialised Exhibitions Montgomery as part of the Southern African Local Manufacturing Expo, saw Bell Equipment win the “Exporter of the Year” in the large category (over R200-million turnover). Exports to more than 80 countries make up about 40% of the company’s turnover and local content of those exports is at 70%. Bell is best known for its heavy equipment which is primarily used in the mining and construction sectors. Infrastructure With two of Africa’s biggest ports in Durban and Richards Bay (pictured) and the King Shaka International Airport and associated Dube TradePort, KwaZulu-Natal has superb infrastructure to support trade and export activity. The N3 highway linking Durban with the Highveld and the industrial hub of South Africa is the country’s busiest road. Durban harbour is South Africa’s premier multi-cargo port and is Africa’s busiest, handling in excess of 80-million tons of cargo per annum (StatsSA). The Port of Durban is a key hub in the transport and logistics chain, with 60% of all imports and exports passing through it. The Port of Durban exports a broad range of products, including automotive vehicles. In 2018/19, the year in which South Africa’s total vehicle exports topped 350 000, Durban’s Car 19 KWAZULU-NATAL BUSINESS 2021/22
