11 months ago

South African Business 2023

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A unique guide to business and investment in South Africa. Welcome to the 11th edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by a website at www. A special feature in this journal focusses on the importance of partnerships as the way forward for the country’s growing number of Special Economic Zones. There are now SEZs in eight provinces and collaboration between the private sector and government and its agencies is proving a crucial element in pursuing the goal of industrializing the South African economy. These zones intended as catalysts for economic growth in established sectors and in stimulating new industries. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provinces. The fact that South Africa’s law-enforcement agencies are arresting people alleged to have been involved in state capture and the Reserve Bank has started freezing assets in other matters leads the national overview because business can’t function properly without the rule of law. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at These unique titles are supported by a monthly business e-newsletter with a circulation of over 35 000. Journal of African Business joined the Global African Network stable of publications as an annual in 2020 and is now published quarterly.

OVERVIEW Transport and

OVERVIEW Transport and logistics The value of goods transported along the N3 continues to grow. SECTOR INSIGHT Private investors are sought to improve roads, railways and ports. Defy’s new warehousing and distribution centre in Danskraal, Ladysmith (pictured), is more evidence of the importance of the N3 Corridor that carries enormous amounts of cargo between Johannesburg and Durban. The new facility represents a R170-million investment into the area and will create more than 130 jobs. The warehouse can process the loading and unloading of more than 200 trucks per day and has a storage capacity of 100 000m³ of product. The strategic location of the distribution centre creates the opportunity to move product by rail from the Ezakheni manufacturing facility to the Durban port 250km away. Since 2012, Defy has invested approximately R642- million into the Ladysmith economy. Studies have shown that up to 45 000 vehicles use the N3 highway on a normal day, and that figure can rise to 130 000 in busy times. More than 75-million tons worth of freight is carried annually along the route. The Harrismith Logistics Hub at the Maluti-A-Phofung SEZ on the N3 is an inland port that can handle cargo containers and shift cargo from road to rail, reducing congestion and costs. State-owned Transnet is expanding its programme to get the private sector involved in the country’s railways, ports and terminals. Because of the dynamics of South African politics, this can never be referred to as “privatisation” in any shape or form, but the trend towards having private companies involved in some way is increasing. To run two of biggest container terminals (in Durban and at Ngqura), the plan is to create a special purpose vehicle that includes new subsidiary of Transnet National Ports Authority (TNPA), Transnet employees and a private operator. This SPV would run the terminals on a 25-year contract. A R100-billion master plan is intended to underpin the upgrade of the Port of Durban on the back of private investments linked to contracts. South Africa has 8 000km of rail line that is defined as a “branch line”. These are typically smaller lines serving a particular farming or mining area and transporting a single commodity, such as wheat. Transnet Freight Rail announced in April 2022 that 16 slots would be available for private operators, including six between Johannesburg and Durban and eight between Springfontein in the Free State and East London. However, the suggested contract period – two SOUTH AFRICAN BUSINESS 2023 70

FOCUS years – almost guarantees that no investor will touch the project. The cost of investment would be too high against the short period in which returns might be made. Despite uncertainties such as this, the private sector seems quite bullish, with trade in shares of logistics companies (Zeder Investments sold its share of The Logistics Group to Old Mutual Infrastructure for R1.6-billion) and interest being shown in Imperial Logistics by foreign buyers such as Dubai-based DP World. Transnet Freight Rail’s operations represent about 80% of Africa’s rail infrastructure. With 25 000 employees TFR has specialist divisions for hauling coal and iron ore together with a general freight division which transports everything from grain to chemicals. While there is concern about the performance of South Africa’s ports in getting goods in and out in the best possible time, a record was set in 2020 by Transnet Freight Rail in transporting 66 train lots and 3 662 FEU reefer containers from Limpopo and Gauteng to the Port of Durban. The Citrus Growers Association was very happy about this, which represented a 20% increase on the previous year’s volumes and was some way towards the target of 15 000 reefer containers. A mandatory automated truck booking system has been introduced at Durban Container Terminal Pier 1 and Pier 2, while the Grindrod, FPT and Bulk Terminal depots have also piloted their own booking systems. The building of the Musina-Makhado Special Economic Zone (SEZ) will boost Limpopo’s role as a transport and logistics hub. The Musina Intermodal Terminal is 15km from the busy Beit Bridge border crossing. It will boost efforts to move cargo from road to rail. The Maputo Development Corridor is Africa’s most advanced spatial development initiative. Run by the Maputo Development Corridor Logistics Initiative (MCLI), the corridor runs from near Pretoria in Gauteng toMaputo in Mozambique. South Africa’s logistics and courier market is worth R10-billion. Transport systems Large amounts of money are to be spent on various forms of public transport in the short term. Investments in rapid transit systems in the big metropolitan areas of Johannesburg and Cape Town are now being followed by other South African cities such as Polokwane and Rustenburg, the Gautrain is looking to expand its routes, and a taxi infrastructure programme is in place. In Limpopo’s provincial capital of Polokwane, operations of the Leeto La Polokwane public transport system were launched in 2021. In the North West, the Rustenburg Rapid Transport Project (Yarona) aims to integrate busses, taxis and improved pedestrian access throughout the city. The South African Department of Transport has several agencies and businesses reporting to it: Air Traffic and Navigation Services Company, Airports Company South Africa (ACSA), National Transport Information System, Road Accident Fund, South African Civil Aviation Authority, South African Maritime Safety Authority (SAMSA), South African National Roads Agency Limited (Sanral) and Passenger Rail Agency of SA (PRASA). Several airports are possible future regional freight nodes: Wonderboom Airport in Pretoria, Polokwane International Airport in Limpopo and Mafikeng. South Africa has 22 000km of railway lines and 747 000km of roads, 325 019 heavy-load vehicles and the road freight industry employs 65 000 drivers. There are 135 licensed airports in the country, 10 of which have international status. ■ ONLINE RESOURCES African Rail Infrastructure Association (ARIA): Airlines Association of Southern Africa: South African Heavy Haul Association: 71 SOUTH AFRICAN BUSINESS 2023

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