A REGIONAL OVERVIEW OF
A REGIONAL OVERVIEW OF KWAZULU-NATAL The first shipment of goods under the under the African Continental Free Trade Area (AfCFTA) from the Port of Durban brought into sharp focus the urgent need for the province – and the country – to upgrade its ports and logistics infrastructure. By John Young In January 2024 President Cyril Ramaphosa was on hand to oversee the first goods leave South Africa from the Port of Durban under the African Continental Free Trade Area (AfCFTA), the agreement whereby most African countries will trade with one another with greater freedom. Unlike other continents where intra-continental trade has boosted economic growth, exports between African countries is at about 16%. Asia is 55%, North America 49% and the EU 63%. The first steps in a move by national government to partner with the private sector in boosting efficiency at ports were taken in 2022: deals were signed at the Port of Durban and at Richards Bay. In 2023, these first steps became a giant leap when International Container Terminal Services Inc (ICTSI), a Philippines-based port operator, was announced as the preferred partner for a joint venture (JV) to run the Durban Container Terminal with Transnet. Getting the deal over the line might take longer as logistics giant Maersk has lodged objections over the process. ICTSI operates in 20 countries and employs more than 11 000 people. Transnet will hold 50% plus one share in the JV for 25 years, with an option to extend to 30 years. From the initial list of 17 potential partners, ICTSA was eventually chosen from a shortlist of six. Part of the plan for Durban Container Terminal Pier 2 is to increase traffic in such a way that it will be able to increase its handling capacity from the present 2.9-million TEUs (twomillion 20-foot equivalent units) to 11-million TEUs by 2032. KWAZULU-NATAL BUSINESS 2024/25 6 PHOTO: GCIS
The 2022 deal involving a 15-year concession for the loading of grain at one of Durban’s agricultural terminals was won by Afgri, one of South Africa’s biggest agricultural firms. Afgri will deal with the operation and maintenance of all landside operations, and the deal includes a similar arrangement at East London. The other two terminals in Durban are operated by SA Bulk Terminals and Bidvest Bulk Terminals. At the event, pictured, President Ramaphosa commented, “Industrial development is core to Africa’s integration. It builds Africa’s productive capacities, adds greater value to our products and diversifies trade beyond the traditional commodities. We have already seen the potential of greater cross-border collaboration. “South African automotive companies source leather car seats from a factory in Lesotho employing close to a thousand workers and wiring harnesses from Botswana at two plants employing several thousand workers.” He further noted that copper wire is sourced from Zambia, rubber from Cote d’Ivoire, Nigeria, Malawi, Ghana and Cameroon, and steering wheel components from Tunisia. Ramaphosa’s attendance at another event signalled that there is sincere interest in the upgrading of logistics infrastructure. The President returned to Durban in April 2024 to officially launch the Newlyn PX Bayhead rail terminal. The multimodal hub will handle, store and make possible the loading and movement of many kinds of cargo, including containers. The facility is adjacent to the Port of Durban. KwaZulu-Natal’s two big original equipment manufacturers (OEMs), Toyota South Africa and Bell Equipment, are among the province’s biggest exporters. From its factory south of Durban Toyota exported 71 014 Hilux vehicles in 2023, to go with the 37 382 units of the same model that it sold locally. About 40% of Bell Equipment’s South African turnover is accounted for by exports, which are sent to more than 80 countries. The company has a large plant in Richards Bay as well as a facility in Germany. Bell was the first winner, in 2019, of the Exporter of the Year Awards for capital equipment Bell Equipment has launched a new division, Bell Heavy Industries. manufacturers offered by the South African Capital Equipment Export Council (SACEEC). In 2023, Bell launched a new division, Bell Heavy Industries. Project engineering and contract manufacturing will be the focus of the division, which builds on seven decades of experience in complex engineering, heavy fabrication, and machining for its own range of material handling equipment. In 2024, the company welcomed a new Group CEO. Having previously worked at the company his grandfather Irvine Bell founded in 1954, Ashley Bell co-founded Matriarch Equipment with his brother, Justin Bell, in 2009, and continued to act as a director of Bell from 2015. One of the first tasks of the new CEO was to announce that a new Bell Motor Grader would be manufactured at the Richards Bay plant from 2025. Energy plans The Provincial Government of KwaZulu-Natal has created a KZN Energy War Room. Over and above the interventions into energy efficiency of government buildings and investments in things like solar panels, and plans to continue rolling out electricity connections to previously unserviced households, the administration intends turning Richards Bay into an energy hub. This ambition received a boost in 2023 with the decision by the National Energy Regulator of South Africa to approve Eskom’s application to build a 3 000MW gas power station at Richards Bay. Battery storage has made a debut in the province as well. South Korean firm Hyosung Heavy Industries has signed on to implement the Eskom project to create a battery energy storage system, in this instance in the uMgungundlovu District Municipality. PHOTO: Bell Group 7 KWAZULU-NATAL BUSINESS 2024/25
