Cash-flush Grindrod goes shopping

With cash in the bank, the Grindrod shipping and logistics group is out on a buying spree. According to Dave Rennie, CE of Grindrod Freight Services and group director, it’s a time of opportunity. The group anticipated the supply crisis, and fared surprisingly well during a global recession that has treated others harshly. As the results of the credit crunch filter down corporate pipelines it is inevitably a time of asset disposals for many – but a time of asset acquisition for the cash-flush Grindrod group. There are a number of potential opportunities in the ship-buying side of the business, according to Rennie, and these could include either individual ships or company fleets. But the bulk sector is Grindrod’s primary focus – strengthening its Unicorn Shipping chemical and product tanker operation, and its Island View Shipping (IVS) subsidiary, which is the largest owner and operator of dry bulk ships in SA. Rennie puts the containership trade to one side of his thinking, because he reckons they are an unattractive commercial proposition unless purchased as a whole group. But he does put a spotlight on port investments – like terminal operations in Africa and south-east Asia, where private sector capital is necessary to help upgrade the region’s infrastructure, and private sector expertise could help in reducing costs and improving efficiency. Rennie sees publicprivate partnerships (PPPs) as one way of injecting fresh capital into the region’s ports – and doesn’t ignore SA in this respect. He said that the phrase PPPs had become a bit of an expletive in union terms. It had therefore taken a bit of a back seat in government thinking and was sidelined by the state-owned Transnet freight group. But Rennie told FTW that he had recently been hearing reports that PPPs were again being talked about in certain sectors of the parastatal, and that they were being seen as a possible solution to Transnet’s shortage of development funding over the long-term. Grindrod had publicly stated that it strongly supported anything that would improve port productivity on a sustainable basis. Unreliable port operations have meant that SA is missing out on a lot of trade opportunities. “We need consistency,” said Rennie. And, he added, with logistics costs across the southern sub-continent being well above the global norm, “we have to bring down the cost of doing business in Africa.”