TRANSNET PORT TERMINALS
TRANSNET PORT TERMINALS
Making SA Ports
World Class
PRODUCTION: David Napier
Transnet Port Terminals Chief Executive, Nozipho Sithole talks to Enterprise Africa about some of the challenges and achievements that are making her tenure as the company’s first female leader a real thrill ride.
INDUSTRY FOCUS: LOGISTICS
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In July, Transnet released its annual results for the year ending 31 March 2017. CEO Siyabonga Gama held a presentation event where he spoke to colleagues and stakeholders about the company’s successes and failures. Fortunately, there were more success and the speech was largely positive. Highlights included an increase in revenue by 5.3% to R65.5 billion, general freight
business up 4.9% and EBITDA up 5% to R27.6 billion. These statistics suggest that, despite the bleak economic outlook that has engulfed the country over the past 24 months, Transnet continues to strategize correctly, focussing on the right areas of its business and making sound investments. In July, Transnet Port Terminals (TPT) – which operates 16 terminal operations across seven South African Ports and is a
vital cog in the country’s import-export business – announced the appointment of Nozipho Sithole as its new Chief Executive, succeeding Karl Socikwa. She was enthused by the Groups results and says that they prove the group’s strategy is correct. “It does feel like everything is going well. Obviously, when things are going well, we see it in the strength of the order book – our customers are bullish, they’re
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INDUSTRY FOCUS: LOGISTICS
//I AM BUOYANT, ESPECIALLY WHEN I SEE THE RESULTS THAT WE ARE GETTING. I SEE THAT EVERYBODY AROUND ME IS ENERGETIC AND KEEN//
NOZIPHO SITHOLE TRANSNET PORT TERMINALS CHIEF EXECUTIVE
currently moving more than a million tons on a weekly basis. The economy is doing better and we are seeing some good results. Post MDS, we are working on a revitalisation strategy – Transnet 4 Point strategy - which sees us move away from infrastructure development post-2019, and start focussing on a ‘one Transnet’ where we use the different expertise across the business units to grow the economy. We are now focussing very hard on the customer service offering and everything is working very well.” Siyabonga Gama said during his results presentation that ports remains a vital contributor to Transnet and reminded of the challenges faced by the business. “We do know that there are new ports in Togo, there are new ports in Mauritius; we operate in a competitive environment
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and if we are not responsive to what is happening in the market place, someone else is going to eat our lunch and if someone else eats your lunch, soon you will go hungry,” he said. He called the lack of investment into infrastructure, particularly at the Durban Container Port, ‘unforgiveable’, and reminded of the importance of reliability saying: “If we are going to become a world class transport and logistic giant, we need to make sure that we are reliable, we need to make sure that our customers can say that we are predictable and we need to make sure that the promises we make are promises we can keep.” Sithole states that the success of Transnet is linked to the overall health of the economy and one is unlikely to perform strongly without contribution
from the other. “We all have an understanding that if we are doing well then the economy does well,” she says. “There is a general understanding that we have been communicating with all of our employees that we are an enabler of economic growth and when everything is going well, we have had an input and our investments are paying off.” FIRST LADY Sithole’s appointment to the premier position at TPT attracted attention from commentators as she became the first woman to take the hot seat on July 1st. The company has a strong transformation policy in place, focussing on the promotion of previously disadvantaged individuals, women and youth among other groups.
TRANSNET PORT TERMINALS
“We continue to make good progress. We need to make sure female representation at all levels continues to grow,” Siyabonga Gama said in July. In August, Transnet National Ports Authority followed TPT by announcing the appointment of Shulami Qalinge as its first female Chief Executive. When pressed on what is different about her leadership style, and what differences employees can look forward to through her tenure, Sithole lists a democratic, hands off approach as a key strength. “I give people that I work with the space in which to execute,” she says. “I give people the vision and the targets and I leave them to work on the how. I allow them to execute their own initiatives and achieve. My second role is to remove stumbling blocks and deliver resources that are required; it could be funding, it could be people, it could be equipment. I know that our people know more about the business that I do so I allow them to come up with ideas and we agree on what should be implemented. Speed of execution, safety, customer service, costeffectiveness and people productivity are the criteria by which we select ideas.” She is also hotly focussed on continuous improvement. “I prefer not to be autocratic and tell people what to do and how to do things. People stop taking initiative, they stop being innovative with ideas and they are always waiting to be told what to do and I don’t like that. I find this way, the energy is much better. Clearly, managing performance is critical and at this stage we manage some elements on a weekly basis but others on a monthly basis. I like to tell people that this is an operation so everything should be managed on an hour by hour basis. “I encourage escalation so we can solve problems before they become serious and find ways to improve in the future by understanding root causes.” A Transnet veteran with 23 years of experience with the SOC, Sithole has worked across various Transnet
businesses and is a member of South Africa’s Institute of Directors. EQUIPMENT INVESTMENT In August, TPT announced that it had erected the first two of 23 new straddle carriers at Durban Container Terminal’s (DCT) Pier 2. Straddle carriers are employed to move and stack shipping containers at port terminals and intermodal yards. Investment into new straddle carriers comes as part of a wider initiative to improve efficiencies. TPT is working closely with Transnet Engineering and Kalmar South Africa to install the new diesel-electric straddle carriers and Sithole says that when all 23 are fully operational, productivity at Pier 2 will be vastly improved. “We have been slightly delayed,” she says, “our expectation was that we would have all 23 by the end of October but there have been some issues. Right now, we have four new straddle carriers and we have a revised schedule which says we will have all 23 by the end of December. It’s very important as it’s going to make us more efficient and It’s going to increase our productivity. One of the current problems we have is that we have very old equipment which breaks down regularly and is often in need of repair – in fact some of it needs to be scrapped. We will soon be able to handle vessels in a shorter period of time; some global ports can offload 2000 TEUs in 24 hours and that is our benchmark and is why the straddle carriers are important for us.” TPT GM: Engineering, Josiah Mpofu said: “Our revised approach to maintaining and procuring new equipment has already had a positive impact on improving the agility and reliability of our operations for our clients and stakeholders, which ultimately results in better customer service. The terminal is working tirelessly to ensure that we continuously improve our service delivery.” With an annual capacity of 2.1 million TEUs, Pier 2 at Durban is a significant contributor to TPT business and takes more than just machine efficiency to run effectively. People are the heart of the
business and will always play a major role in driving customer service. “As well as equipment, we are also looking at people, productivity, planning and processes, and these are the main pillars that we use to drive an efficient port. We want continuous communication from our customers so that we can handle demand and the services they expect. We then check our capacity and go back to the customers with detailed analysis of what we can deliver,” says Sithole. “We are also effected by ‘element’ issues which we must prepare for where possible. For example, we are seeing rain and wind speeds that are much higher than we have seen previously. This can delay our ability to handle containers but we always strive to recover quickly,” she adds. Across its operations, at SA’s container terminals at Durban, Ngqura, Port Elizabeth and Cape Town, TPT is responsible for commercial handling services of sea-route freight across imports, exports and transhipments in containers, bulk, break-bulk and automotive, and efficiency and productivity are now more vital than ever. ECONOMIC UNCERTAINTY? The port terminal and container industry is one that has faced significant challenges in recent years. Since the 2008 global financial crash, there have been a number of hurdles that businesses in the industry have had to overcome. The readjustment of global trade flows post-2008, weak demand growth, larger vessels, and liner alliances are just a few of the major differences that have surfaced in the past decade, and combined with the uncertain and unstable political and economic environment in South Africa and the recent commodity price crash, it all makes for a challenging business environment for TPT. But in September, following months of negativity, it was announced that South Africa had exited technical recession and the economy had grown by 2.5% in the second quarter of 2017. Cabinet welcomed news of
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INDUSTRY FOCUS: LOGISTICS
GDP growth and said it was cautiously optimistic about SA’s economic recovery. With TPT’s focus on efficiency and productivity, now could be the time for the company to achieve new success. “For the container business, things are cyclical and we are in the peak season now,” says Sithole. “We’ve just finished the reefer season so from a container point of view we expect demand to taper. For bulk commodities such as coal, manganese, chrome, magnetite, commodity prices are holding and we expect demand to increase and our economists are confident about this. We also expect motor vehicles and automotive business to taper down before growing again in the new year. “In 2013/14 we saw bulk commodity prices going down and that put a strain on our customers. It gave us a chance to maintain our infrastructure and a chance to train our employees but we are not expecting that to happen again so we are continuing to invest. We are investing in port equipment and, as Transnet, we are extending the space that we use to
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spec particularly reefer containers. We are continuing with these investments on the understanding that we will continue to have strong demand but we are mindful of the cyclical nature of our business in certain areas.” The Chief Executive also reminds us that despite the less than favourable trading conditions, TPT’s Saldanha operation managed to achieve significant milestones and renewed its reputation as SA’s main iron ore export terminal. “Last year we exported 57 million tons of iron ore from Saldanha bulk terminal. Saldanha bulk terminal is one of our best performers; it’s a multipurpose terminal and we also export manganese and with the growth that we are seeing in manganese, that terminal is doing very well. This year, we expect to be able to export another 58 million tons of iron ore as well as 1.5 million tons of manganese, so it is a star performer,” says Sithole. COMMUNITY DRIVEN COMPANY Transnet at group level, and through its subsidiaries, is a company that employs around 60,000 people and recognises that the communities in which it operates, across SA and Africa, are imperative to its success. That is why Transnet invests heavily in community upliftment programmes that champion entrepreneurship, skills development and sustainable job creation. A recent example of success in this regard comes from KZN and small businesses that have benefitted from Transnet assistance in a big way. A total of nine youth and woman-owned rural cooperatives have received machinery from Transnet and forged business opportunities for the benefit of the community. In July, Sithole and a number of other delegates visited some of the businesses, including Amakhabela cc (one of the most successful), and saluted the success that is ongoing. “We are very proud,” explains Sithole. “What we are doing within the communities in which we do business is partnering with our suppliers to create enterprises. For example, in Pongola we have handed over equipment for the manufacturing of
TRANSNET PORT TERMINALS
nails and in Greytown, we have supplied equipment for the manufacture of toilet paper and other products. This creates opportunities for cooperatives and they can create products for sale in the open market. Our partners who are manufacturing toilet paper now have contracts with retailers all over South Africa. It’s our small contribution to the making these cooperatives selfsufficient. We hope that in the future they will come to us and ask for help in building export capacity and we will be in a position to provide assistance with connecting these enterprises with our customers in Europe or China or India. Our plan is to unlock manufacturing in South Africa and perhaps help move the economy from a consumption society to one which has a manufacturing base.” To date, Amakhabela cc has secured a number of important contracts including one with Spar to supply 40 Spar branches in KZN with their in-house branded toilet paper called Twin Twice. “If we see a depressed economy, that can have a disruptive effect on our core business which is rail so when we service our community we recognise that we need to add to our traditional CSI projects by supporting self-sustaining communities,” says Sithole. Still looking for proof that Transnet is heavily invested in its communities? The company, at group level, and through its subsidiaries including TPT, was named by the Dutch-based Top Employers Institute as one of South Africa’s 2017 most advanced employers, demonstrating leading edge employee conditions. The Institute’s comprehensive independent research revealed that Transnet Ltd and TPT provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation and has demonstrated its leadership status in the HR environment, always striving to optimise its employment practices and to develop its employees. “We always have to keep ourselves inspired,” says Sithole. “We don’t feel pressure but we do try to keep people energised. The planning process that we are embarking on, which basically cultivates capacity before we commit to
our customers, will be very helpful. The pressure to perform is always there but the role that I take is that we understand the root causes of problems and work on plans that will benefit us. I also like to communicate with our customers as they have been here longer than I have and they have global exposure and they have insight into how other ports operate and that can be helpful. I have no doubt in my mind that we will come through the issues we are faced with right now, particularly improving productivity at our Durban Container Terminal.” Looking to the future, Nozipho Sithole is optimistic. As the company’s first female Chief Executive she is keen to advance HR startegie so that more women get the chance to excel in what has been described as ‘man’s world’. “We have to make a difference with training programmes that focus on getting more women into a technical
environment and to help them to gain authentic leadership skills,” she says. And regarding the success of TPT, with many investments starting to pay off, right now is an interesting period for the company. “I am buoyant, especially when I see the results that we are getting. I see that everybody around me is energetic and keen. I will also be very happy when I hear our customers tell us that we are now delivering the world class services that they would expect from a port terminal so it is an exciting time,” she concludes.
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AFRICA
THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS
Published by CMB Multimedia Chris Bolderstone – General Manager E. chris@cmb-multimedia.com Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-multimedia.com www.cmb-multimedia.com
Issue No.63
www.enterprise-africa.net
TRANSNET PORT TERMINALS
Making SA Ports
World Class Exclusive Interview with
Nozipho Sithole
ALSO IN THIS ISSUE:
SANSA / Imperial Holdings / Select PPE / Matus
A S F E AT U R E D I N
ENTERPRISE AFRICA
OCTOBER 2017