36 minute read
Healthcare
Health counselling at work is a growing trend.
One of South Africa’s most innovative and successful manufacturing companies signalled in 2018 that its growth path is continuing. Aspen Pharmacare sells medicines and products in 150 countries from 25 manufacturing plants at 17 sites. In 2017, revenue was R41.2-billion.
The opening in May 2018 of a R1-billion specialised product facility in Port Elizabeth will add 500 jobs to the existing complement of 2 000 staff members. The new plant will make products for chronic conditions, a new departure for the company which until now has focussed on generics. Annual production is planned of about 3.6-billion tablets.
South Africa has one of the world’s biggest HIV/Aids programmes. The National Department of Health’s Centralised Chronic Medicines Dispensing and Distribution programme aims to reach six-million patients on treatment by 2021: it is currently serving 4.4-million patients. In mid-2018, Pharmacy Direct, an Afrocentric business, spent R100-million on upgrading a warehouse for distributing medicines to state patients.
This business is likely to grow if the state goes ahead with plans for National Health Insurance. The NHI intends to create a single fund that will buy services on behalf of all South Africans.
South Africa’s pharmaceutical sector is worth approximately R20-billion annually. Although there are more than 200 pharmaceutical firms in the country, large companies dominate, with Aspen (34%) and Adcock Ingram (25%) the key players, followed by Sanofi, Pharmaplan and Cipla Medpro. A number of large pharmaceutical firms have made significant investments. The National Association of Pharmaceutical Manufacturers (NAPM) has re-branded as Generic and Biosimilar Medicines of Southern Africa.
A new field opened up in the pharmaceutical industry when the South African Health Products Regulatory Authority (SAHPRA) gave the go-ahead for the production of a biosimilar drug in July 2018, the first time this has been allowed in South Africa. Teva Pharmaceutical Industries became the first company to win a licence with its version of Amgen’s filgrastim, a white blood cell booster.
Taking health education and counselling into communities and the workplace is a trend that is growing. A focus on prevention, risk assessments and profiling assists people in avoiding illness or managing their health.
A cheap plastic heart valve, research on radiation treatment of cancer using Gold Nano particles and posture support wheelchairs and positioning devices that allow greater independence and participation of disabled people – these are some of the inventions and innovations coming out of the Western Cape health research and manufacturing sector where provincial and national funding is available for innovation.
ONLINE RESOURCES
Generic and Biosimilar Medicines of Southern Africa: http://gbmsa.org National Health Insurance: www.health.gov.za/index.php/nhi Innovative Pharmaceutical Association South Africa: http://ipasa.co.za/ South African Medical Research Council: www.mrc.ac.za South African Medical Technology Industry Association: www.samed.org.za
SECTOR INSIGHT
National Health Insurance could be a game changer.
Christo Becker
BIOGRAPHY
Christo started his 21-year career in healthcare as a paramedic in Fire and Disaster Management Services. In 2001 he completed an MBA with the intention of moving his career towards hospital management. He has worked as hospital manager in several private facilities. His passion for people and strategy has ensured that the hospitals he has managed have grown rapidly while focusing on sustainability. With selfmotivation and a commitment to continual improvement, Christo implements positive changemanagement.
Selfmed Medical Scheme
Christo Becker, the Principal Officer at Selfmed Medical Scheme, outlines the advantages of a self-administered scheme.
How did Selfmed begin and how has it evolved?
The Scheme initially formed part of the Sanlam Life Insurance stable, created in 1965 and formally registered in 1972. This makes Selfmed one of the most experienced medical aid schemes in the industry. At Selfmed we have a handson approach, and this resulted in our taking control of our own Client Services Centre, or Excellence Centre in 2006. We thereafter progressed to taking over the full administration function in 2010; also recently bringing our Managed Healthcare inhouse.
What is your market?
Historically membership comprised individuals and their families. The introduction of the Selfnet options in 2015 and 2016 allowed us to reach a younger audience. This was also the opportunity to branch out into corporate marketing, offering membership to blue-collar employees. We have seen great success in this area.
Is there flexibility for clients?
The scheme currently has five products: Selfmed 80%, Med Elite, Selfsure, Med XXI, Selfnet and Selfnet Essential. Each product is designed specifically for a life stage, as the needs of a member changes. As the person advances in life and starts a family they will move towards the Med XXI or Selfsure options, for example, which have a wider range of benefits relevant to a young family.
How is Selfmed handling ever-rising costs?
The biggest challenge facing the healthcare industry is the significant rise in healthcare costs, with healthcare inflation exceeding general inflation. This compels us to proactively introduce mechanisms to manage these costs. Selfmed is applying machine learning to the claims database to draw a more accurate picture of a member’s specific needs. The information can then be used to engage members on an individual basis – if we can intervene early it is to the benefit of all parties.
How does SelfMed Medical Scheme differentiate from competitors?
In a traditional medical aid/administrator environment all administered functions rest with an administrator. As such, a medical aid would be fully dependent on its outsourced administrator to inform it of any issues relating to its members. Being fully self-administered allows Selfmed to take total ownership of all its member interactions and can address any administrative problems or complaints immediately. We do not have an electronic routing system, you speak to an individual. This personalised hands-on approach is fundamental to our model of building a credible member experience.
Business in Africa
Trading with African neighbours is set to become easier.
The signing of the Kigali Declaration in March 2018 marks a significant shift in expectations for intra-African trade. Regarded as the first step towards the establishment of a Continental Free Trade Area (AfCFTA), the commitment shown by African political leaders shows that the issue is receiving priority status.
The continent’s population of 1.2-billion represents a huge and potentially lucrative market, with the 55 members states of the African Union having a combined gross domestic product (GDP) of $2.5-trillion. However, many African countries have stronger trading ties with countries on other continents that they do with their neighbours.
The reasons for this are long-standing and complex and will require investment in logistics and infrastructure to overcome. But political will is a major component in the equation and the Kigali Declaration shows an intention to make trading among Africans easier.
An AfCFTA Business Forum has been established to allow for private sector engagement with the formulators of policy. This should allow for realistic and workable trade agreements. The United Nations Economic Commission for Africa (ECA) has suggested that by the year 2022, the AfCFTA could lead to an increase in intraAfrican trade by as much as 52%. Fully 30% of South Africa’s exports are to other countries in Africa, but a massive 83% of this volume is into Southern Africa.
This means that the potential for South Africa to grow its exports into other parts of Africa is enormous, if the infrastructural obstacles can be overcome.
The Southern African Development Community (SADC) is a 16-member inter-governmental organisation with its headquarters in Gaborone, Botswana. Other members include South Africa, Lesotho, Malawi, Namibia, Tanzania, Comoros and Mozambique.
SADC is one of several regional organisations on the continent and there have been moves in the past for cooperation between these bodies. For example, a tripartite summit was held between the leaders of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and SADC. The AfCFTA may supercede these agreements as it applies to all of Africa.
SADC’s theme for 2018/19 is “Promoting Infrastructure Development and Youth Empowerment for Sustainable Development”. This is an extension of the body’s focus on industrialisation, while also putting the focus on infrastructure development, youth empowerment and sustainable development.
The 38th summit of SADC held in Namibia in 2018 approved the creation of the SADC University of Transformation, in the form of a virtual university. This is further intended to support industrialisation through subjects such as technology transfer, innovation, digital and knowledge economy, entrepreneurship, commercialisation and enterprise development. SADC has a Revised Regional Indicative Strategic Development Plan (RISDP) 2015-2020, which deals with industrialisation, regional infrastructure, agriculture and strategy.
Corridor development is an important part of growing intra-African trade. Within the corridors of development, red tape and infrastructure are other key elements.
South African retailer Shoprite spends about R20 000 per week in permits, and long waits at border posts are routine. But the Chirundu one-stop border post in Zambia has reduced transit times by a third. Passenger transport delays have been reduced from three hours to 30 minutes and freight is now cleared in one day instead of three.
A number of corridor projects are in the pipeline or have already been implemented. The Maputo Development Corridor has successfully linked the thriving industrial and business centre of Gauteng Province in South Africa with the Mozambican port city of Maputo. The idea of corridors has been adopted by the Infrastructure Consortium for Africa (ICA), and several corridors have been conceptualised since that decision, for example the Northern Corridor of Central and East Africa.
A corridor strategy relies on infrastructure, with inter-related plans being developed involving the upgrading and standardisation of facilities at ports, railway lines, customs posts and energy projects.
South African rail, ports and pipeline operator Transnet is already very active in African countries north of the South African border and is intending to offer its services more widely.
The Sustainable Development Investment Partnership (SDIP) comprises 30 institutions which aim to see 16 African infrastructure projects (valued at more than $20-billion) carried out. The founders of the SDIP were the World Economic Forum (WEF) and the Organisation for Economic Co-operation and Development (OECD) and other members now include the Bill and Melinda Gates Foundation, the Senegal Strategic Investment Fund (FONSIS), the US Agency for International Development (USAID), the Industrial Development Corporation of South Africa (IDC) and the Development Bank of Southern Africa (DBSA).
The Export Credit Insurance Corporation of South Africa (ECIC) exists to help trade and investment across borders. ECIC can provide insurance for bank loans that are taken by investors and South Africans can get insurance for investments and for small and medium enterprises there is a product available (performance bonds to anyone exporting capital goods and services.
The South African Department of Trade and Industry plays a key role in terms of promoting trade between South Africa and the rest of Africa, but also supports regional bodies such as SADC and promotes the kind of integration contained in the plans of the New Partnership for Africa’s Development (NEPAD) and the African Union’s Agenda 2063. The dti’s Africa Export Council (AEC) was inaugurated in 2016 with the goal of promoting South African products and services in Africa.
The ECIC proudly supports South African exporters and investors.
The Export Credit Insurance Corporation of South Africa SOC Limited (ECIC) was formed as a dedicated export credit agency to cater for medium to long-term export transactions.
The short-term transaction market was amply catered for, but medium to long-term export transactions still had a need for a dedicated export credit agency, hence the formation of the ECIC. Acting as a catalyst for private investment, the ECIC steps in where commercial lenders are either unwilling or unable to accept long-term risks. Along with the ECIC’s major shareholder, the Department of Trade and Industry, the ECIC makes use of market research tools and specialised business development units to create new insurance products that support the government’s export promotion objectives. The revised performance bond insurance product, which was launched in 2016, is one such example.
“The ECIC has recently developed new products, including lines of credit, lease and return of plant equipment. It also continues to be a catalyst for an increased lending capacity by financial institutions by entering agreements with other export credit agencies (ECAs). In this way, it creates a framework for both re- and coinsurance,” explains the Chief Executive Officer, Kutoane Kutoane. To this end, it has adopted a comprehensive plan of action aimed at actualising cooperation programmes for mutual benefit in conjunction with, among others, BRICS ECAs, Afreximbank and African Trade Insurance. The ECIC is also able to price African risk more competitively, given its knowledge of the African market. A $1-billion financing programme
In 2018 the ECIC, in partnership with the African ExportImport Bank (Afreximbank), launched the South AfricanAfrica Trade and Investment Promotion Programme (SATIPP), a $1-billion financing programme to promote and expand trade and investments between South Africa and the rest of Africa.
The financing institutions will work together to identify, prepare and appraise trade transactions and projects, explore co-financing and risk-sharing opportunities and share knowledge, with particular emphasis on intraAfrican trade matters, through technical cooperation, staff exchange, research and joint events.
The joint initiative will support businesses through capacity building and market information initiatives. It will also provide advisory services and guarantees to South African investors seeking trade and investment opportunities in selected African countries.
Investing in Lesotho to become easier and faster
The new Lesotho National Development Corporation (LNDC) Strategic Plan is outlined by the incoming Chief Executive, Mohato A Seleke.
As the main parastatal of the Government of Lesotho, the Lesotho National Development Corporation (LNDC) is charged with the implementation of the country’s industrial development policies. The corporation’s role is to promote Lesotho as an attractive investment location for foreign, domestic and indigenous investors. The LNDC is the first point of contact for investors who intend to set up operations in Lesotho. In 2016, the LNDC received an Investment Promotion Award from UNCTAD (United Nations Conference on Trade and Development) at the 14th UNCTAD Conference.
We are a commercially operated entity that has been making good profit and maintaining a healthy balance sheet in striving to pursue its founding mandate and higher purpose to the people of Lesotho. We are committed to moving into the next five years with a new and strong sense of meaning: to make an impact in a truly fundamental way in Lesotho’s economy. To this effect we have developed and launched a Strategic Plan 2018-2022 which intends to mobilise our private sector and the resources at our disposal around one common purpose, to develop the first generation of Basotho industrialists. This is crucial to lifting thousands of rural communities out of poverty and unemployment by consciously mainstreaming their participation in the supply chains of strategic investments.
This is not only about jobs. It is also about raising income levels and creating generational wealth and capital gains for the people of Lesotho. This is our raison dêtre.
We seek to put significant financial resources and technical know-how into a sector where over just 70% of our people earn a living, subsistence agriculture. This is critical to realising the ideals of shared, inclusive and sustainable growth as espoused in the National Strategic Development Plan II (NSDP II). We are repositioning the country as an agricultural powerhouse in Southern Africa by developing local supply chains and plugging into regional value chains.
We have identified 21 priority products which already have international market access or hold a great potential to do so. These include meat and meat products, fruits and vegetables, utilising our abundant and quality natural resource. The textiles and apparel manufacturing value chains also hold potential and we aim to gain a bigger share in the light-engineering value chain.
We are aiming to partner with, support, incentivise and reward leading export-oriented companies by scaling up their productive capacity, facilitating international market access and integrating them into supply chains.
National champions
Secondly, we are going to set up new companies, or national champions, within the priority areas and related product categories. We have already made great strides here to attract the necessary Foreign Direct Investment by initiating partnerships with renowned regional and global players in those target product lines. We can no longer afford to look only inward within the geographic borders of Lesotho in diversifying our economy. We are talking to strong partners and are seeking more of those to initiate, promote and facilitate the development of vertically integrated industrial activities. The intention is to establish national champions that are capable of competing at par with their regional and global peers in strategic industries, particularly in manufacturing and hightech agri-processing. For the first time, building industries and diversifying our economy will mean cross-border acquisitions of strategic assets, raw materials, distribution channels and technology by these national champions. This represents a real chance to turn the tide for Lesotho. These companies will be pitched at the necessary scale and scope with the right technology, product and process certifications and with top talent to lead them.
Entering foreign and regional markets early is no longer an option for us as a country, but it has now become a vital necessity.
With this strategic roadmap, we are flipping our resource allocation almost completely, to cover talent, capital and time commitment. Activities in high-value manufacturing and high-tech agri-business and related supply chains will consume a significant portion of these resources. In the next five years, we are looking at modern high-tech agriculture as an area for big business, big investment,and big impact in terms of jobs, incomes and overall economic competitiveness. In manufacturing, Basotho entrepreneurs will be integrated into local, regional and global supply chains. We will meticulously assess and evaluate the impacts of these investments on the economy, on social equity and the environment.
Thirdly, in line with the NSDP II, we aim to facilitate further investments in our national priority sectors such as tourism and the creative industries as well as the development of infrastructure and technology-based industries. We are keen to welcome the world to experience our mountainous scenery, green summers and snowy winters on their visits to Lesotho or in consuming film and digital products made in Lesotho.
We recognise that a superior strategy and a winning business model are not enough. We are therefore building our nation brand “Brand Lesotho” and undertaking a reform process to streamline our investment climate to deliver on our promise. This new strategic posture also demands a reconfigured organisational platform. The LNDC is therefore being realigned to deliver on its key performance parameters with speed and excellence in execution.
I invite investment and technical partners to come and build this new impactful and rewarding journey of Lesotho’s with us.
CONTACT DETAILS
Lesotho National Development Corporation Address: Development House, P Bag A96, Kingsway Road, Maseru 100 Contact person: Marina Bizabani, Foreign Investment Manager Tel: +266 22 312012 Email: bizabani@lndc.org.ls or ip@lndc.org.ls Website: www.lndc.org.ls Mohato Seleke joined the Lesotho National Development Corporation in December 2017. Within six months he released a five-year corporate strategy mapping the direction for the development of industry, and its contribution to the creation of inclusive economic growth in Lesotho.
Botswana: investment and trade hub
Botswana is a peaceful country with a fast-growing economy at the heart of Southern Africa, bordered by Namibia, Zambia, Zimbabwe and South Africa. Its central location makes Botswana the perfect gateway for reaching the whole of the Southern African Development Community (SADC), making it the ideal investment and trade hub.
With a stable political system, real GDP growth rate of 4.3% (2016) and an adult literacy rate of 83% (World Bank), Botswana truly is an ideal investment destination.
Botswana has deservedly become a favoured destination for international tourists as a land of unmatched beauty, plentiful in wildlife and rich in culture. The landscape gives it a magical and dreamlike quality, from its prominent salt pans to diamond-rich deserts and lush flood plains. The business potential of this friendly nation is less well known.
Since peacefully gaining its independence in 1966, Botswana has managed to exploit its wealth of underground resources, especially diamonds, to develop not only its diverse economy but also its people. Botswana is the biggest producer of diamonds in the world by value. Its people have a rich, diverse culture and embrace all who come to Botswana with a welcoming warmth. The official language of the country is English; Setswana is the national language. • Gross Domestic Product 2016: $15.6-billion • Per capita GDP: $7 018
Investment Opportunities
There are investment opportunities in each of the following sectors: • Mining, including diamond beneficiation, coal and soda ash • Cargo, freight and logistics • Leather and leather goods • Automotive • Agriculture • Financial and business services • ICT • Health • Education
The Big Five – reasons to invest
Botswana provides a peaceful and stable environment to its citizens and investors and has maintained peace since independence in 1966. Reasons to invest include: • Zero tolerance for corruption, a sound legal system and adherence to the rule of law • Botswana is the least corrupt country in Africa, ranked 35 out of 176 in the world in 2017 (Transparency International) • World’s second most attractive investment location (Altman’s Baseline Profitability Index (BPI), New York University) • Highest sovereign credit rating in Africa • One of the world’s fastest growth rates in per capita income.
Trade agreements and access Easy to do business
Botswana provides preferential access to the entire marketplace of the Southern African Development Community (SADC) which has more than 292-million people, duty-free access to South Africa, Namibia, Lesotho and Swaziland, and duty-free and quota-free access to the European Union (EU) market. Imported machinery and equipment for manufacturing purposes do not attract duties.
In addition, Botswana is signatory to an extensive range of protocols and trade agreements that give access to lucrative markets around the world.
Incentives for investors
• No foreign exchange controls or restrictions on business ownership • Taxes are very low, 15% for manufacturing and
International Finance Service Centre (IFSC) companies, 22% for other businesses and 25% for individuals • Remittance and full repatriation of profits and dividends is allowed • Development Approval Order: tax holiday (zero corporate tax) can be available to investors for a period of five to 10 years • Operational double taxation avoidance agreements with South Africa, United Kingdom, Sweden, France,
Mauritius, Namibia, Zimbabwe and Russia • Companies accredited by the Innovation Hub pay tax at 15% of profit.
CONTACT DETAILS
Botswana Investment and Trade Centre (BITC) is an integrated investment and trade promotion authority with an encompassing mandate of investment promotion and attraction, export promotion and development, including management of the nation’s brand.
The organisation plays a critical role of driving Botswana’s economic growth through attraction of FDI, domestic investment, facilitation of expansions and further spearheads the growth of exports by promoting locally manufactured goods to regional and international markets.
BITC has committed to deliver on making investment as easy a process as possible, through facilities such as the One Stop Shop. Services include helping with office space and registrations, visas and licences.
Botswana Investment and Trade Centre (BITC): Private Bag 00445, Gaborone, Botswana Plot 54351, off PG Matante Road, Exponential Building, Central Business District (CBD), Gaborone, Botswana Tel: +267 363 3300 | Fax: +267 317 0452 South Africa: 88 Sandown Mews, West Wing, Stella Street, Sandton, Johannesburg Tel: +27 11 884 8959 | Fax: +27 11 883 7798 Website: www.bitc.co.bw
A hub of economic activity
Shopping, trading and entertainment are now accepted parts of the airport experience for travellers, but new thinking is being applied to how airports can spark economic growth in surrounding areas.
By definition, airports play a role in tourism, logistics and trade but the concept of an aerotropolis takes this further in finding ways to leverage the advantages that the facility brings to the region. The airport becomes a hub of economic activity in the same way that cities anchor different economic sectors that grow up around the centre.
Several South African airports and regions are using this thinking to underpin new approaches to economic planning.
OR Tambo International Airport is the biggest airport in Africa. The City of Ekurhuleni, where OR Tambo is located, is hoping to be the national centre for logistics and to boost its already impressive manufacturing capacity by building more
infrastructure and freight hubs. It also wants the aerotropolis concept to play a role in helping to consolidate the integration of the nine town councils that went into making up the current metropole.
The Tambo Springs inland port and logistics gateway has been established near Katlehong as an inter-modal facility which can transfer containers from rail or road to storage facilities and ultimately to the customer. Existing freight rail lines run through the site and link it to the seaports of Durban, Cape Town and Ngqura (Port Elizabeth). The aim with this new facility is to improve efficiency. It is run by the Tambo Springs Development Company.
Logistics is obviously a major part of the equation and facilities such as the Tambo/Springs inland port will add capacity to the region. However, using closeness to the airport as a factor in driving down costs can also be a way of promoting manufacturing. When this factor is supported by national, provincial and local government incentives, the business proposition for investors becomes very attractive.
The OR Tambo Industrial Development Zone is one of several sites allocated by the South African government to stimulate investment in targeted sectors. The OR Tambo IDZ supports the development of businesses that work in the beneficiation of precious metals and minerals sector, with a focus on light, high-margin manufacturing of South African precious and semi-precious metals. Export is encouraged.
The National Department of Trade and Industry (dti) is the lead agent in the creation of Special Economic Zones, which are part of the national Industrial Policy Action Plan (IPAP). SEZs are designed to attract investment, create jobs and boost exports. Industrial Development Zones are a type of SEZ.
Other important participants in building on the aerotropolis concept include Airports Company South Africa (ACSA), operator of nine of the country’s airports, Air Traffic Navigation Services (ATNS) and local and provincial governments and their agencies.
In the Free State, Bloemfontein is pursuing an Airport Node project within a broader N8 Corridor development scheme. A project covering 2 000ha and expected to cost in the region of R100-billion over several phases has been initiated at the Bram Fischer International Airport. A development plan for the area has designated five precincts: Terminal, Boulevard, General Aviation, Airport Industria and Grasslands. The Road Lodge Hotel was built within this conceptual plan. A range of land uses beyond the hotel are envisaged, including warehousing, hospital care, commercial, service stations, conferencing, retail, motor vehicle dealerships, car rental, logistics hub and a showground.
A major reason for the building of a new airport north of Durban was to stimulate cargo volumes, particularly in the agricultural sector. King Shaka International Airport (KSIA) and the nearby Dube TradePort are intended to complement one another, a good example of the aerotropolis idea. The opening of a R99-million cold-storage facility at Dube TradePort in 2017 gives farmers and exporters additional flexibility, allowing them to store chilled and frozen perishable goods.
Dube TradePort is a 3 000-hectare development that encompasses the airport and is ideally situated for any logistics business as it is very close to Africa’s busiest cargo port (at Durban) and 140km from the deepest natural harbour in the southern hemisphere where the Port of Richards Bay and the Richards Bay Industrial Development Zone (RBIDZ) are located.
Dube TradePort is a Special Economic Zone and it encompasses a cargo terminal, a serviced industrial estate, 12 hectares of office, retail and hospitality space and an agri-zone for growing, packaging and distribution of high-value perishables and horticultural products.
The focus in Cape Town in recent years has been on growing the number of direct flights to the city. A record 10-million arrivals passed through the gates of Cape Town International Airport in 2016 as a result of a programme called Air Access. The next big thing at CTIA is going to be a new runway. Airport Industria is already a well-established commercial and industrial zone. With increased volumes into the airport, it likely to continue to grow. The re-aligned new runway will also open up new commercial opportunities. ACSA is looking to promote economic activity in the previously undeveloped Symphony Way area through site zoning. Commercial and logistics are the two most likely kind of activities suited to the newly targeted area.
The Oceans Economy
There are massive opportunities in new maritime sectors.
Anew university campus, a new institute, new training programmes at several venues across the country, investment in ports and equipment – the Oceans Economy is no longer just a concept talked about at conferences, it is a reality that is starting to have an impact on South Africa.
South Africa has 3 000km of coastline and the extent of the country’s territorial waters is greater than its land size. And yet the country does not have a merchant marine fleet and only scrapes the surface in terms of the percentage of repair and maintenance of boats and oil rigs which could potentially bring work to its ports.
What is also called the Blue Economy has enormous potential for economic growth and concomitant job creation. National government wants to see the Oceans Economy contribute a R177-billion to gross domestic product by 2033. This is part of the National Development Plan (NDP).
National strategy on the Oceans Economy is also aligned with Operation Phakisa, a plan that targets sectors that can best achieve quick returns in terms of growth and job creation. The four target areas within the maritime strategy are: aquaculture; offshore oil and gas; marine protection and governance; marine transport
and manufacturing. Transnet National Ports Authority is spending heavily on upgrading the nation’s ports.
One statistic illustrates the potential: South Africa does maintenance on only 5% of the 13 000 vessels that uses its ports and services 4-5% of the approximately 130 rigs that pass along the coast each year. Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East.
South African companies are alert to this potential. More than 7 000 direct jobs were created in the Western Cape ship and rig repair sector in 2015.
Port Elizabeth has positioned itself at the centre of the academic side of the Oceans Economy. Nelson Mandela University launched the Ocean Sciences Campus in 2017 and the South African International Maritime Institute (SAIMI) has chosen the city as its base as it sets about supporting the sector through research and training. SAIMI runs the National Cadet Programme which is paid for by the National Skills Fund.
The curriculum for these institutions ranges from the law of the sea, shipping and transport, to aquaculture, boat-building, oil and gas exploration, repair and maintenance and environmental management. The university has four marine sector chairs funded by the South African Research Chair Initiative (SARChI) and the National Research Foundation (NRF).
Special Economic Zones
South Africa has a number of licenced Special Economic Zones (SEZs), some of which are called Industrial Development Zones (IDZs). The best established of these are the coastal IDZs at Saldanha, Coega (Port Elizabeth), East London and Richards Bay.
These areas are central to the Oceans Economy strategy because of their strategic positions and the favourable environment created for investment by specific legislation related to SEZ tariffs, tax deductions and grants. The first illustration of national commitment to the strategy came late in 2016 with the allocation by the Department of Energy of two Liquefied Natural Gas (LNG) plant options, one each to the IDZs of Richards Bay and Coega.
The Saldanha Bay Industrial Development Zone is central to a plan to grow the oil and gas sectors although it was not allocated a possible LNG plant. Large industrial operations already exist at Saldanha and the Port of Saldanha Bay is the portal for the export of South Africa’s iron ore. The SBIDZ is set to become a hub for a range of maritime repair activities and oil rig maintenance and repair.
The ports of Ngqura and East London are well positioned to act as container transit points and the skills set of the Eastern Cape’s workforce, particularly in the automotive and automotive parts sector, could be attractive to repairers and manufacturers in marine subsectors. Both Eastern Cape IDZs have aquaculture sections. The East London IDZ already has investors such as Pure Ocean Aquaculture and Ocean Wise.
Durban’s annual throughput of containers is about one-million, more than 60% of the country’s total. As part of Operation Phakisa, the Port of Durban is upgrading its dry dock and buying new cranes to speed up operations.
There is also an ambitious plan to dig out the old airport south of the city, connect the big hole to the sea and make it a harbour; this would allow Toyota to roll their new vehicles directly from the factory floor to the hold of a ship.
The Port of Durban is already home to a variety of maritime companies. EBH-SA has been in the business marine engineering and repairing ships since it began as Elgin Brown and Hamer in 1878. To improve their competitiveness, three South African shipbuilders (SAS, Damen Shipyards Cape Town and Nautic Africa) have agreed to pool their resources on contracts.
Cooperation pacts like this one might be a good template for the nation’s ports and the rig/boat repair and servicing sector. With the Angolan and Mozambique oil and gas industries growing bigger every day, it is unlikely that one port could cope with demand anyway.
The Port of Richards Bay has added a new berth on average every second year. It has deepwater infrastructure and the huge Richards Bay Coal Terminal, the country’s primary site of export for coal. The Richards Bay IDZ intends becoming an energy hub.
Partnering for maritime growth
SAIMI supports maritime research and innovation.
SAIMI hosted maritime business students from the Massachusetts Maritime Academy, USA, on an experiential learning tour in January 2018 to understand the South African maritime sector. Pictured with the group at the Port of Ngqura are (front, from left) senior student Nick Zaia, the academy’s South African-born Dr Portia Ndlovu and Transnet representative Ntshantsha Buyambo.
The South African International Maritime Institute (SAIMI) supports research and innovation that will help unlock the growth potential of the local maritime industry. SAIMI worked in collaboration with other research roleplayers to draw up the Maritime Research, Innovation and Knowledge Management Roadmap which presents a vision, and sets objectives and action steps for South Africa to be globally recognised as a maritime nation by 2030.
The map provides direction for research, innovation and technology development to support achievement of the Operation Phakisa growth objectives in the Oceans Economy. It also guides SAIMI’s knowledge management strategy.
The next step is dissemination and implementation of the road map, and SAIMI is working with the Council for Scientific and Industrial Research (CSIR), universities and leading research centres, to support postgraduate studies and commission new high-level research in key areas.
Launched in late 2016, the road map is the result of an extensive review of existing tertiary qualifications, research and innovation activity and current strategies, together with wide-ranging stakeholder consultation in charting the way forward.
It is aligned to the vision and objectives of Operation Phakisa in the Oceans Economy and integrates the research and innovation needs of the maritime economy, which takes in everything from aquaculture to tourism, environmental protection to oil and gas exploration, and maritime transport and manufacturing.
Another initiative is to drive a maritime awareness campaign to develop a national maritime culture and consciousness, contributing to awareness of maritime economic opportunities, the development of a sustainable blue economy, and the profile of South Africa as a maritime nation.
SAIMI also acknowledges the importance of interacting with other major institutions, not only in South Africa, but also on the African continent and in the global maritime industry.
Work on SAIMI’s Africa Focus is well underway with leading teams from Kenya, Ghana and Nigeria all part of the research process. Partnerships are also being explored with universities and maritime authorities in China and Southeast Asia.
SAIMI works with organisations such as the NSRI to support programmes developing life skills and maritime skills for school learners and future seafarers.
South Africa’s blue economy offers a beacon of hope for sustainable job creation and economic growth in a field of almost unending potential.
Playing a vital role in developing this burgeoning industry, the South African International Maritime Institute (SAIMI) facilitates the skills development to support growth in the sector and the country’s aim to be a leading maritime nation.
“Essentially, our role is to help South Africa steer the right course in growing the skills needed for the rapid development of the maritime sector as envisaged under Operation Phakisa,” says SAIMI’s acting chief executive Odwa Mtati.
Boasting, as it does, more than 3 000km of coastline and territorial waters larger than its land size, South Africa is extremely well positioned to explore the diverse economic and job creation opportunities that lie within the marine sector.
“All the natural foundations are in place. South Africa is the African continent’s only country with access to and control over sea waters covering three oceans,” says Mtati.
“While South Africa’s land surface is 1.21-million square kilometres, the waters under its control cover some 1.6-million
square kilometres. The coastline stretches from the cold Atlantic Ocean in the west to the Southern Ocean in the south, and then to the warm Indian Ocean in the east.”
Headquartered in Port Elizabeth, and with plans to eventually be represented in all of South Africa’s major coastal cities, SAIMI works with educational institutions, government departments and the private sector across South Africa.
Its primary role is to respond to industry needs by identifying skills gaps, facilitating collaboration and development of new programmes, and coordinating maritime education and training in areas across the diverse maritime economy spectrum – from shipping and transport, to aquaculture, boat-building and oil and gas exploration, through to ocean governance and environmental management.
One way of doing this is by reaching out to the younger generation, educating them about sea-going career opportunities and also offering training facilities through its management of the National Cadet Programme.
Funded by the National Skills Fund, the programme – which was SAIMI’s first and still its largest project – offers practical training and sea time with international shipping lines, enabling maritime diploma students to obtain the internationally recognised Standards of Training, Certification, and Watch-keeping (STCW) qualifications and become globally sought-after seafarers.
Innovative approaches to seafarer training, which have the potential for replication if successful, are being followed with some of the partner shipping companies, which recruit a small number of cadets into an intensive programme aimed at developing their own future officer corps from cadet to apprentice to fully-fledged officer.
The programme has also extended its reach to school level in an effort to encourage interest in maritime careers, sponsoring holiday camps and maritime experiential programmes for school learners, along with maths and science support to ensure entry to maritime studies programmes.
In addition, the institute is currently facilitating a pilot project with the Transport Education and Training Authority (TETA) for training of deck and engine ratings towards Certificates of Proficiency as Able Seafarers, to work in areas such as vessel maintenance, rigging and cargo handling for merchant shipping and the fishing industry.
In a long-standing partnership with the Africa region of the International Oceans Institute, SAIMI supports the annual IOI Ocean Governance for Africa course which equips public sector officials from South Africa and the African continent to understand the maritime aspects of environmental management and planning.
SAIMI is funded by a threeyear grant of R296-million from the National Skills Fund for the skills and capacity-building work to support Operation Phakisa, an initiative of the South African government.
The initiative was designed to fast-track the implementation of the oceans economy and address issues highlighted in the National Development Plan 2030 such as poverty, unemployment and inequality.
A common thread running through all Operation Phakisa initiatives is the need to develop the skills to operate the engine room, as well as to navigate the way forward. SAIMI is at the helm of this skills development as well as capacity building and empowerment of people to support the goals of Operation Phakisa and growth of the maritime economy.
CONTACT DETAILS
Physical address: Ocean Sciences Campus, Gomery Avenue, Summerstrand, Port Elizabeth, South Africa Postal address: PO Box 77000, Nelson Mandela University, Port Elizabeth 6031, South Africa Tel: +27 41 504 4038 Email: info@saimi.co.za Website: www.saimi.co.za
EBH South Africa
High-quality ship repair and marine engineering.
Elgin Brown and Hamer, proudly a level 2 B-BBEE contributor, is among one of the largest and oldest shipyards in Southern Africa, having been founded in 1878. EBH South Africa was originally known as James Brown and Hamer. The company was later acquired in December 2012 by the DCD Group and then became known as EBH-SA.
Operations
EBH South Africa provides the international shipping industry as well as the oil and gas sector with a full in-house service in all aspects of ship repair through its operations in Durban, Cape Town and East London. The company offers a dedicated team of employees focused on superior quality service, delivered by skilled craftsmen, and an extensive network of experienced subcontractors through a full range of utilities. This ensures efficient ship repairs, conversations or new construction projects.
What sets us apart?
In addition to all our service offerings, Elgin Brown and Hamer purchased its first floating dock, Eldock, in 1998, which was originally built in Russia. EBH South Africa has a privately-owned floating crane which has a lifting capacity of 60 tons at 10 metres.
Achievements
The Oliver Top Empowerment Awards honours and awards outstanding contribution to the national vision of the country.
In 2016 EBH-SA won the Oliver top empowerment award for skills development.
In 2017/18 Transnet awarded EBH with the best-performing ship repairer of the year.
In 2018 EBH was once again nominated as finalist for skills development in the Oliver Top Empowerment Awards.
Services
• Pipe repairs • Steel repairs • Underwater services • Electrical • Scaffolding • Mechanical • Blasting and coating • Riding crew • Hydraulics
Skills development
EBH-SA passionately believes in artisan and engineering training and development. We regard apprenticeships and engineering investments as being key to the ongoing success of our organisation. Our involvement in these programmes since 2010 has produced numerous qualified artisans and engineers.
