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Small shipping firms struggle

Johannesburg - Small firms in the multimillion-rand maritime business this week voiced concern that transformation in the shipping industry is sinking.

The companies have put the blame squarely on the government and companies in the private sector that export and import goods.

The businesses said the various government departments had not created policies to ensure local maritime firms that generate a yearly revenue of between R250m and R350m got empowered.

As part of its empowerment drive, the transport department, in collaboration with the trade and industry department, launched the integrated industry transport sector charters in October.

The charter stated that the industry should be transformed by 2014 and become one of the world's 35 leading shipping nations.

Director of maritime company Southern Chartering, Nkanyiso Buthelezi, said he doubted the shipping industry would reach its sector charter objectives as the government had not formulated policies that would enforce transformation.

"The government could come up with a policy that would require local companies, especially mining houses, to give local companies at least five-year contracts to export a minimum of 25% of their goods and commodities," said Buthelezi.

He said not securing such contracts made it difficult for companies that wanted to venture into the shipping business to secure loans from financial institutions to purchase vessels.

"If South African companies could allow small maritime businesses to export 25% of their products, our entrepreneurs could operate up to 250 vessels. That would create about 14 000 job opportunities," he said.

Buthelezi suggested that the transport department should partner with the trade and industry and minerals and energy departments to create policies that would force companies exporting their goods to award locals long-term contracts.

Les Bucwa, chief executive of the Johannesburg-based Vinm Marine Holdings, said the implementation of the empowerment policies would also pave the way for foreign companies to transfer skills to locals.

Vinm is a freight forwarding business that transports goods from inland to the ports and vice versa.

"On average a vessel costs about R250m and there is no financial institution that would fund my company to buy a vessel if I did not get at least a five-year exporting and importing contract," he said.

Foreigners taking jobs

Another problem is that South Africa, unlike other developing countries such as China and India, does not have laws that limit the number of ports that ships from foreign countries may use to load or offload goods, he said.

"Foreign companies just come to the country's waters and take away business from local entrepreneurs," said Bucwa.

He said there was a need for black businesses to create an industry body to negotiate contracts with local companies and speak to the government with one voice.

Lance Manala, owner of Amistad, a consultancy in the industry, said the government and private companies should play a role in growing this sector to favour locals.

Manala added: "Once we can have control of the industry, we would start seeing indirect business opportunities where companies providing services like insurance, catering, shipping agents and fuel could also benefit."

Peter Copley, a transport analyst at the Development Bank of Southern Africa, said the only way the government could achieve transformation in the maritime industry was to form partnerships with companies that were responsible for managing the delivery of goods.

To run a ship cost at least R240 000 a day, he said.

He advised small businesses wanting to venture into the maritime sector to scout for second-hand vessels that had been repossessed by the sheriff of the ports.

- City Press

For more business news coverage, go to City Press.

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