Ports & Ships Maritime News

Nov 20, 2007
Author: P&S

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TODAY’S BULLETIN OF MARITIME NEWS

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Richards Bay not reaching target

Why China comes out tops

US officials say AFRICOM will promote security and spur development

African conference to tackle economic issues/a>

SA companies get R860m from frigate deal

Durban port dropped by SAECS ship

Pic of the day – INGWENYA





Richards Bay not reaching target

A Business Day report says that the Richards Bay Coal Terminal (RBCT) underperformed during October when compared with the same month last year. According to the report RBCT shipping 5.53 million tonnes of coal – 23 percent down on the 7.71mt in October 2006. Blame for the shortage is placed on a train derailment near Witbank.

The report added that RBCT received 5.74mt by rail during October (5.91mt in 2006) which is a 2.9 percent decrease and that in September 2007 RBCT received 6.25mt and exported 5.73mt.

If these figures were annualised the terminal will achieve 64.69mt of exports this year, which is well below RBCT’s capacity of 72mt.

The derailment in October is one of several that have occurred this year, but for our part (Ports & Ships) we don’t believe derailments are the sole or even the major reason for a drop in exports through Richards Bay.

Under most conditions the stockpile would have taken care of any short-term shortfall resulting from a train smash, assuming that the heavy-haul line was not out of service for a lengthy period.

It appears more likely that the coal mines and RBCT are not exporting to their full ability, for reasons they will know. Because the coal mining industry is a private business they are under no obligation to share that with anyone else, but the regularity with which there are empty berths at the port has been noted, suggesting that there is actually no great demand on coal from this port.

In other regions of the world ships are still queuing outside harbours to load coal – For much of this year there have been long queues outside Newcastle in Australia – up to 60 ships at a time – and delays of 20 days and more have been commonplace. Richards Bay on the other hand seldom has a coal ship delayed by more than a day and even that is rare.

Which brings into question the need for Transnet to provide all those expensive new locomotives for the coal line. Is the business really there and are the coalminers deliberately holding back on exports?

If we may borrow a comment from a road haulier in reaction to Transnet’s announcement of a five-year, R67bn programme to revamp SA's ports and freight rail facilitiesseen, as seen in another publication, Railways Africa. “What's the good of owning a Ferrari if you can't unlock the garage?” he asked. What indeed.



Why China comes out tops

by Helen Kilbey (AllAfrica.com)

Cape Town - Low costs give Chinese investors in Africa a competitive advantage over their counterparts from other countries, a Chinese analyst told the US - Africa Business Summit in Cape Town.

Professor Yang Guang, director-general of the Institute of West-Asian and African Studies of the Chinese Academy of Social Sciences, was addressing an audience of mostly American and African business leaders.

"They [China] possess low-cost technology for resource development," he said. "They enjoy a low cost of labour – not only unskilled labour but also... engineers and managers; they employ cheap 'Made in China' electrical machinery, and they earn the support of the government."

Yang was speaking at a plenary session of the summit focussing on Chinese and American perspectives on investing in Africa.

Ambassador Princeton Lyman of the US Council on Foreign Relations told the same session that the US could not compete with China's offerings.

"China is able to package their government programmes, their state-owned enterprises, their aid programmes in ways that the United States can't," Lyman said.

"We can't assist an oil company in making a deal by saying if they win [a contract with an African country] we'll build a road [for that country], and it's a challenge for those of us who do things differently."

China's rapidly growing economic presence on the continent has been taking up more and more space on the agendas of a range of entities interested in African business, including governments, local industries, and foreign companies operating on African soil.

The Council on Foreign Relations, the Chinese Academy of Social Sciences, the Leon H. Sullivan Foundation of the US and the Brenthurst Foundation of South Africa have been running a trilateral dialogue on how Chine – United States relations can benefit African economies.

Giving feedback on the dialogue to the summit, Lyman described China's recent activities in Africa as "almost breathtaking. They've come with such vigour and such energy and resources."

Yang backed Lyman's observations with evidence. China now has more than 800 companies operating in Africa in a wide variety of sectors, he said. About 100 are state-owned and the rest are private but still supported by the Chinese government.
 
In monetary terms, Yang added, the cumulative value of Chinese investment in Africa totalled 11.7 billion US dollars by the end of 2006.

"We began by investing heavily in the resource development industries," he said, "but nowadays Chinese investment is widespread in industries such as textiles, agro-industries, electricity, road construction, tourism, and telecommunications…"

Africa has had a mixed response to China's increased presence on the continent.

Sindiso Ngwenya, assistant secretary-general of the Common Market of Eastern and Southern Africa (COMESA), told the summit Africa should focus on its own interests at the same time as trying to meet China's needs.

"There's nothing wrong with them [China] being after resources – everybody is after resources," he said, "but the issue is... what is it that they bring to the table?"

He cautioned that China was "awash with cash, and they are looking for investment opportunities," adding that "we need to engage them with open eyes [and] ensure that it is a win-win situation."

South African trade minister Mandisi Mpahlwa agreed: "Africa, your problem is not the self-interest of the Chinese. Your problem is... how do you leverage this growth, this demand, for maximum benefit?"

This article appeared on 16 November 2007 in www.allAfrica.com



US officials say AFRICOM will promote security and spur development

Washington - Helping Africans confront security challenges in their region long has been a priority of the United States, say senior US officials. But the military’s new Africa Command (AFRICOM) also will prove an essential tool in continuing an equally long-standing commitment to helping communities across the continent strengthen governance, improve health care and meet economic development goals.

In 14 November congressional testimony, however, Stephen Mull, acting assistant secretary of state for political-military affairs, said that in meetings with leaders from Africa and Europe, he continues to encounter many misperceptions about AFRICOM, established by the Defense Department in February as the newest of its six geographic divisions to monitor security threats.

Mull was joined by Ryan Henry, principal deputy under secretary for policy at the Defense Department, and the AFRICOM commander, Army General William “Kip” Ward, at a House Armed Services Committee hearing, to dispel the prevailing myths about the new command, such as the notion that AFRICOM represents a ‘military takeover’ of US foreign policy toward Africa.

AFRICOM’s purpose, said Mull, is to build strong military-to-military partnerships in the region. By doing so, it will support and complement, not overshadow, aid programs offered through American embassies by the State Department and the US Agency for International Development (USAID).

Henry said the United States spends $9 Billion a year through the State Department and USAID to help Africans deliver medical care, promote trade and new business opportunities and build more effective governance structures. In contrast, he said, the United States spends only $250 million a year for security assistance programs -- half of which goes directly to supporting the African Union’s peacekeeping mission in Sudan.

Like other military commands monitoring Latin America, Europe, the Middle East and Asia, Ward said, AFRICOM will coordinate its activities with embassies in the region. But in doing so, the new command also will use an innovative new organisational structure that brings together military and civilian experts from across the US government to formulate and exchange new policy ideas with their African partners.

“When coordinated and nested in this manner, AFRICOM’s contributions can help African countries effectively address threats such as political instability, terrorism, human rights abuses, cross-border trafficking and international crime,” Mull said.

Another myth, the officials said, is that AFRICOM represents a move by the United States to place a large troop presence in Africa.

While the United States is in discussions with several African nations on a possible headquarters for the command, no new bases will be established, said Henry. Unlike other US military commands, he added, AFRICOM will have a relatively small staff that is able to ‘reach back’ to the United States for resources if needed.

This structure, Ward said, reflects AFRICOM’s mission to work with regional organisations such as the African Union and its regional economic communities, the nations of Africa and their citizens to provide the tools and training needed to solve regional security challenges before they grow into international crises.

A third myth is that AFRICOM is geared exclusively to fighting terrorism and countering a rising Chinese presence at the expense of other challenges facing the region.

“The United States, China and other countries share a common interest in a stable, secure and rising Africa,” Henry said. “And though we may differ on the means, we look forward to cooperating with China as a responsible international stakeholder to achieve that end.”

While helping governments combat terrorists will be one mission, Ward highlighted several other ongoing activities in the region that illustrate AFRICOM’s future, including joint medical training programs that provide aid to poor communities, training African troops to serve as peacekeepers, and the recently established Africa Partnership Station - a US Navy ship in the Gulf of Guinea that serves as a ‘floating school for military and law enforcement personnel from across the region. (See related article
http://ports.co.za/news/article_2007_11_12_0211.html#four)

“It begins with understanding our African partners’ definitions of their own environment and interests and understanding the complexities of the diverse countries and cultures across the continent,” said Ward. “Appreciation of their perspective will allow us to jointly identify ways and means that address both African and American interests.”


(USINFO is produced by the Bureau of International Information Programs, US Department of State. Web site: http://usinfo.state.gov)



African conference to tackle economic issues

Addis Ababa (BuaNews) - The 2nd African Economic Conference will provide a platform for African academics and policymakers to exchange views on economic development problems and challenges facing Africa.

The conference opened on Thursday under the theme: "Opportunities and Challenges of Development for Africa in the Global Arena."

Ethiopian Minister of State for Finance and Economic Development Mekonen Manyazewal said according to the Economic Commission for Africa's (ECA) 2007 Africa Economic Report the continent's growth in real GDP in recent years had averaged about five percent.

This is a strong performance compared to the past, he said, but the sustainability of growth in Africa is still an unfinished business, particularly due to the continually changing external environment testing African countries' capacity to accelerate and sustain growth.

ECA Executive Secretary Abdoulie Janneh said Africa's economy had shown an encouraging improvement over the past few years.

This kind of conference, which creates an opportunity for economists and policy makers to discuss on the issue, is essential to sustain the growth, he added.

The conference is aimed at promoting knowledge management as an important component of good policy design and implementation, to foster dialogue and the exchange of ideas among economists and African policymakers as well as encouraging and enhancing research on economic issues related to the development of African countries.

Some 65 papers on various issues will be presented at the conference co-organised by the African Development Bank and the ECA.

According to the World Bank's Africa Development Indicators 2007 released Wednesday, many African economies appear to be on a path of faster and steadier economic growth.

Speaking at the annual release of the continent's development indicators, World Bank Country Director Ritva Reinikka said African economies' performance over 1995-2005 reverses the collapses over 1975-1985 and the stagnations witnesses over 1985-1995.

"Average growth in the Sub-Saharan economies was 5.4 percent in 2005 and 2006. The consensus projection is 5.3 percent for 2007 and 5.4 percent for 2008.

"Leading the way are the oil and mineral exporters thanks to high prices, but [also] 18 non-mineral economies, with more than a third of the Sub-Saharan African people, have also been doing well," said Ms Reinikka.

Chief Economist at the World Bank for the Africa Region, John Page, in his presentation of the indicators explained that African economies could be divided into three groups.

The groups can be divided as follows: the slow growth economies such as Zambia, Guinea and Zimbabwe; the diversified economies with Gross Domestic Product (GDP) growth of about 4 percent a year such as Mozambique, Rwanda, Uganda and Ghana; and finally the oil exporting economies such as Equatorial Guinea, Chad, Angola, Sudan and Nigeria.

The theme of the development report questions whether Africa's steady growth could be attributed to good policies or luck.

Mr Page said in his opinion it seemed to be a bit of both, quoting Einstein: "Fortune favours the prepared mind."

He said that if a country, or collectively a continent, has the correct policies in place, that it is more likely to experience stronger economic growth.

One of the worrying factors that Mr Page highlighted in the report was the lack of export diversification in many of the African economies.

"Many of these countries' exports that were important in 1975 are still important today. Despite the spread of growth in exports across the continent, the lack of diversification is still a worrying factor," he said.

With regard to the trend of GDP across the continent over the last decade, Mr Page said the trend for Africa had never really managed to top 2 percent.

Whilst the actual GDP growth of many African countries has in many cases experienced real growth, the volatility of Africa's actual growth remains a problem, he said.

Over the short to medium term much has happened in Africa, explained Mr Page.

"There have been several episodes of growth acceleration, but acceleration was usually followed by growth collapses.

"Thus the very slow long run growth cycles in which growth and then collapse preceded each other in an almost predictable pattern."

However, economists have, since 2005, noticed that the frequency between what he referred to as "the good and bad times" has started to shift in favour of the good times for the continent.

Explaining the term 'good times', Mr Page said it is when savings and investment are higher, trade is substantially greater and policies and institutions including government function effectively.

He highlighted that despite Africa managing to grow in tandem with many of the world's developed economies, the fact that the continent was a natural resource hub for the rest of the world made it increasingly vulnerable to outside shocks and changes in commodity prices.

Crucial to the acceleration of growth on the continent is increasing private investment and Mr Page highlighted that improving the investment climate, bolstering infrastructure, spurring innovation, and building institutional capacity are therefore crucial.



SA companies get R860m from frigate deal

by Shaun Benton

Cape Town (BuaNews) - South African companies received R860 million worth of contracts from the offset programme related to the purchase of the South African Navy's four new frigates, according to German shipbuilders ThyssenKrupp Marine Systems and Armscor.

The contracts were awarded to South African manufacturers as part of the Defence Industrial Participation (DIP) element of the roughly €500 million spent on the four frigate platforms, said Stephen Laufer, a public relations official for ThyssenKrupp.

The contracts spent on South African companies relates only to the actual frigate platforms, that is the ship without its weapons systems, which were integrated into the frigates in South Africa using high amounts of local content.

The R860 million (€88.124 million), relates directly to contracts for the construction of the actual platforms and not the weapons systems, reporters were told as they were shown around one of the four new frigates at Simonstown Naval Base.

The South African Navy received the last of the four Valour Class MEKO A-200 frigates, the SAS Mendi, in March this year in Port Elizabeth. All four are now in service, having had their weapons systems integrated into the platforms built in Germany.

Locally manufactured elements of the frigate platforms were exported to Germany, thus bringing foreign currency into South Africa, and contributing to the stabilisation of South Africa's balance of payments.

According to Ulrich Scheel, an offset manager for ThyssenKrupp Marine Systems, when the offset programme began South Africa's shipbuilding industry was "ailing" and was given an opportunity to grow and become integrated into global supply chains because of the DIP programme.

South African companies which benefited from contracts relating to the four new frigate platforms include DCD Dorbyl, Bennett's Engineering, Titanium Industries, Booyco Engineering, Siemens Pinetown and MTU in Cape Town.

Parts of the frigates' sophisticated titanium exhaust systems, designed to increase their stealth capacity, were made by South Africans, while the ships' masts were also largely made in the country, reporters were told.

Other South African elements include parts of the electrical, diesel engine, refrigeration and ventilation systems and hydraulic power units, as well as integrated platform management systems and superstructures, were produced by South African firms.

A helicopter refuelling system was built in Cape Town, electrical and power supply switchboards were made in Pinetown, while ventilation modules were made in Johannesburg.

This has given South African firms a competitive advantage internationally, said Andy Richter, formerly head of technology transfer and logistics management for the ThyssenKrupp and now in charge of special projects for the German shipbuilder.

This process has integrated these firms into the global supply chains, with the Malaysian Navy now using some South African-made equipment on the recommendation of ThyssenKrupp.

South Africans did "a good job" and now "we know what we get if we source it [equipment] from South Africa," said Mr Richter.

The Korean and Italian navies are now also using specially-welded titanium exhaust systems, while hydraulics systems are also being supplied internationally, according to ThyssenKrupp and Armscor.

Armscor is responsible for monitoring the Defence Industrial Participation programme, also known as the offset programme, while the Department of Trade and Industry monitors the separate, civilian offset component, which is known as the Industrial Participation Programme.

Separately, the National Industrial Participation element is worth about 500 million, in terms of investment and sales, amounting to 100 percent of the value of the full deal, reporters were told.

With the frigate platforms costing approximately €125m each, there is about R200 million worth of local content on each platform, according to Mr Laufer.

When it comes to the weapons systems added to the platforms, South African content is higher, boosting overall local content to about 60 percent.

The frigates are armed with uMkhonto surface-to-air missiles, which now come recommended by ThyssenKrupp for its other customers.

The Finnish Navy, for instance, has ordered South African-made uMkhonto heat-seeking, self-defence missiles, said Mr Richter.

Made by Denel Air Systems, the uMkhonto missiles are now a "design candidate" internationally, he said.



Durban port dropped by SAECS ship

Mitsui OSK Line (MOL) has advised that the container ship MOL SPRINGBOK is to omit the port of Durban on voyage 801B in order to make up lost time.

Accumulated berthing delays has resulted in the ship sailing for South Africa from Europe 10 days later than scheduled and to make up lost time the ship will now miss Durban on the current southbound voyage.

Cargo destined for Lisbon and Antwerp will be transferred to the DAL EAST LONDON on voyage 801B which is ETA Durban on 15 December and sailing Durban 17 December.

Cargo destined for Le Havre and Bremerhaven will be transferred to SAFMARINE NOKWANDA 801B arriving Durban 13 December and expected to sail 17 December.



Pic of the day – INGWENYA

Click on image to enlarge – with some browsers click twice



The Transnet NPA dredger INGWENYA, which is normally based at Richards Bay, has been doing a lot of maintenance dredging at other ports this year. She recently spent a short time at the Shop 24 repair quay in Durban undergoing maintenance but on 14 November was ready to sail and later that day was seen in the Maydon Channel heading for the port entrance. Picture Terry Hutson



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