GRINDROD
GRINDROD
Ground-breaking in Every Way PRODUCTION: William Denstone
Grindrod’s business is all about moving cargo, by road, rail, sea and air, and providing integrated logistical and specialised services en-route. The company reported a robust set of results last month as ground-breaking took place at its monumental Coega site, construction which includes the Port of Ngqura’s future liquid bulk tank farm and main access road. 2 / www.enterprise-africa.net
INDUSTRY FOCUS: LOGISTICS
//
Today, Grindrod is a world-class freight logistics operation. With more than 100 years of experience in South Africa’s freight movement and related industries the country is its definite hub and base, but the company is a global concern represented by subsidiaries, joint ventures and associated companies in more than 30 countries worldwide. In excess of 5000 skilled and dedicated people mean that Grindrod is uniquely positioned to service Africa trade flows. Grindrod was initially founded in 1910 as a small coastal shipping company, growing into a diversified business trading globally and employing crew from all over the world. In June 2018 its Shipping Division was separately listed on the Nasdaq in New York and on the JSE, a milestone in the Group’s history. Grindrod Limited now consists of two division: Freight Services and Financial Services. “The Freight Services executive team have developed comprehensive plans to improve the profitability of the business,” says Mike Hankinson, Chairman, and Grindrod continues to invest in assets and opportunities across its operations with specific focus on oil and gas, dry bulk, bulk liquid commodities, containerised cargo and vehicles.” “In the long term our strategy is to continue to add diversity and
// WE ARE FOCUSED ON UNLOCKING CORRIDORS TO ENABLE AFFORDABLE LOGISTICS FOR AFRICA’S RESOURCES IN A COMPETITIVE WORLD // 4 / www.enterprise-africa.net
scale,” explains CEO Andrew Waller. “We are focused on unlocking corridors to enable affordable logistics for Africa’s resources in a competitive world.” COEGA GROUND-BREAKING The last time that Enterprise Africa delved into what was in store for Grindrod, we shared its excitement in its Oiltanking Grindrod Calulo (OTGC) undertaking. The company had been appointed by Transnet Ports Authority (TNPA) to plan, fund, construct, maintain and operate a new liquid bulk handling and storage facility in Port of Ngqura, in the Eastern Cape Province. In February this year, after nearly a decade of graft, OTGC and TNPA announced the turning of the first sod at the site of the Port of Ngqura’s future liquid bulk tank farm and main access road, paving the way for Ngqura’s establishment as a new petroleum trading hub for Southern Africa. This will also allow South Africa to reduce its reliance on imports and ramp up annual distribution capabilities, while facilitating the much-needed refurbishment of a glittering waterfront in Port Elizabeth. Speaking at the sod-turning event, Mkhuseli Faku, Chairman of OTGC said: “Having been awarded the concession to develop a liquid bulk storage and handling facility in the Port of Ngqura, OTGC is now embarking on the first phase of construction. The terminal will be built to the highest international safety standards and provide exceptional service to its customers. “OTGC looks forward to becoming a contributing member of the Nelson Mandela Bay community and expects to continue on its growth path in the years ahead.” Port Manager of the Port of Ngqura, Tandi Lebakeng also welcomed the start of construction. “The new tank farm will develop the Port of Ngqura’s liquid bulk capacity
// OTGC LOOKS FORWARD TO BECOMING A CONTRIBUTING MEMBER OF THE NELSON MANDELA BAY COMMUNITY AND EXPECTS TO CONTINUE ON ITS GROWTH PATH IN THE YEARS AHEAD // for commodities such as petroleum, diesel, jet fuel, illuminated paraffin and liquid petroleum gas,” she explained. “Once operational, the terminal will facilitate substantially increased throughputs over present volumes handled at Port Elizabeth. The allocated 20 Ha site also provides ample space for future expansion of the terminal.” Liquid bulk products will be transported to the Port of Ngqura via ship and piped to the tank farm prior to local supply and global re-export. The new modern facility will service the oil majors, new entrants into the South African oil industry as well as international traders, all of which will underpin the local shipping industry. NEW AND IMPROVED FACILITIES Among the most notable news of late for Grindrod has been updates at some of its key facilities. After the award of a logistics contract by Syrah in 2017, Grindrod began construction of a dedicated Intermodal facility in Nacala, to move bagged graphite from Syrah’s mine in Balama to Nacala Port for export. Key services offered include long-haul transport from the mine to the warehouse in Nacala, and storage and containerisation of the product.
INDUSTRY FOCUS: LOGISTICS
The Nacala site is now operational, and at full production Grindrod will containerise 30,000 tonnes of bagged graphite per month. To service this contract in Northern Mozambique, Grindrod had to develop a warehouse and container and transport yard facilities, with a total footprint of 60,000m². Phase 1 - the construction of the warehouse and container yard - is now complete and fully operational, and the first cargo arrived in June 2018. Besides significant investment in infrastructure and equipment, 145 people have already been employed already employed 145 people, a significant boon for the Mozambique economy with 98% of these staff being local. The Port of Maputo took delivery in February of two new mobile harbour cranes to join the operational
6 / www.enterprise-africa.net
fleet. The acquisition of new equipment is in response to growing demand, specifically in bulk minerals, and will improve productivity. “In addition to the two mobile harbour cranes, we have recently acquired 14 payloaders, 8 tractors, 8 forklifts and 2 rail excavators. This investment is in line with the need to improve the berth usage and the rehabilitation and deepening works that are taking place at the moment,” said Chief Operations Officer, Marla Calado. The new fleet - larger and more modern - will allow higher productivity rates to be achieved supporting increased volumes handled in the port. Larger ships such as Capesize vessels have been calling at the port more frequently since the dredging of the access channel was completed in January 2017. “Our turnaround times have
// WE WILL CONTINUE TO INVEST IN STRATEGIC ASSETS, ENABLING EFFICIENT LOGISTICS CHAINS AT COMPETITIVE PRICES AND IMPROVING AFRICA’S GLOBAL COMPETITIVENESS // been improving,” Calado continued. “We believe this new equipment will enable us to further increase our operational efficiency, our competitiveness and our volumes in terms of cargo handling.” “I am extremely proud of what our logistics partners and Grindrod,
GRINDROD
in particular the Maputo teams, have done to unlock the Maputo corridor and provide an efficient solution to our customers”, said Andrew Waller, CEO Grindrod Ltd. ROCK SOLID RESULTS Following the listing of its Shipping arm in June 2018, a renewed focus on Freight Services yielded positive results for Grindrod at the close of 2018. Furthermore, while its repositioning is ongoing, earnings growth generated by Financial Services is pleasing. Earnings from continuing operations in Freight and Financial services stood at R803.4 million, an increase of 24% compared to earnings of R646.3 million in 2017. Headline earnings from continuing operations were stated at R716.6 million, a 26% improvement on the previous period.
Port of Maputo was among the star performers, achieving record volumes of 19.6 million tonnes, a 7% improvement on the prior year. Also of note was the effective dry-bulk terminal utilisation, which resulted in a marked improvement in volumes handled during the second half of 2018. Not to be outdone, the Logistics Division succeeded in expanding its footprint with the completion of the 60,000m² cross-docking facility in Nacala in 2018. The acquisition and integration of the NovaGroup, meanwhile, strengthened the division’s position in the niche marine technical market and in container storage. There were also strong results to report in the Financial Services division, as core deposits increased by 14% to R8.9 billion compared to the R7.8 billion of 2017.
Andrew Waller summed up the key aims for the coming year as the stars continue to align for his company. “Grindrod Freight Services’ focus is on unlocking trade corridors. We will therefore continue to invest in strategic assets, enabling efficient logistics chains at competitive prices and overall improving Africa’s global competitiveness. “The Financial Services business is focused on continued steady growth, developing a new retail business and increasing its focus on small and medium enterprises in South Africa.”
WWW.GRINDROD.CO.ZA
www.enterprise-africa.net / 7
Published by CMB Media Group Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. Š CMB Media Group Ltd 2019
AS FEAT UR ED IN
ENTERPRISE AFRICA
APR IL 2019