Grindrod gets involved in infrastructure upgrades to harness opportunities

Even with the slowdown of growth in China, demand for African commodities continues to grow. The need therefore for ongoing partnerships between government and the private sector in developing infrastructure and capacity necessary to meet current and future demand is paramount, according to Dave Rennie, CEO Grindrod Freight Services – Ports, Terminals and Rail. “Most of the continent’s coal production is done in South Africa as a result of significant investments made in the sector over the years. But despite impressive resources, infrastructural challenges have inhibited the growth in coal production. “Other countries, most notably Mozambique and Botswana, have impressive coal resources and projects to deliver resources to market are at various stages of development,” said Rennie. “Tete in Mozambique is the largest underdeveloped thermal and coking coal resource in the world. The existing railway line, the Sena, is inadequate for the volumes required which by 2020 will be 100mtpa. Botswana sits on an enormous coal field, estimated to be over 20 billion tons.” According to Rennie, having the right infrastructure to harness these opportunities is important. Governments cannot do it alone and therefore it is necessary for the private sector to become involved. Grindrod, he said, had a growth strategy based on the opportunities presented in Africa. “We want to establish a presence at strategic locations along development corridors in Africa, assisting customers in bringing commodities through the corridors and shipping them out to international markets,” he said. “In this regard we are heavily involved in developing and extending freight infrastructure that benefits African trade.” He said various partnerships had been formed in recent times to allow the company to reach its goal. “To assist Grindrod in the expansion of the coal terminal in Maputo, we introduced Vitol, one of the world’s largest energy trading businesses, as a 35% partner in the concession. In addition to this, Vitol and Grindrod entered into a partnership (65% Vitol/35% Grindrod) to combine their respective sub Saharan coal trading businesses. Vitol is considered to be an ideal partner to grow the coal trading business by providing opportunities to junior miners,” he said. “Good progress has been made towards completing the feasibility study to expand the Maputo coal terminal to 20 million tonnes of coal and 10 million tonnes of magnetite while a project to expand the terminal by 1.3 million tonnes commenced in April 2012 and is scheduled for commissioning in 2013. This will increase the capacity to 7.3 million tonnes per annum and is fully supported by the current rail capacity.” Furthermore the company executed a number of other transactions this year including the sale of shares to Vitol in the bunker trading business, and the shipping joint venture specifically for the building of four product tankers, while the logistics division acquired Petrologistics Botswana, and Röhlig-Grindrod merged with Calulo’s clearing and forwarding business. “The merger of Grindrod Ships Agencies and Sturrock shipping in a 50:50 joint venture also took place, while our rail division, RRL Grindrod, has made great strides in expanding its locomotive fleet and has extended its spectrum of rail services across Africa, including Congo Brazzaville, Mozambique, Sierra Leone, South Africa, Nigeria and Kenya,” said Rennie. “Partnerships are a key way to ensure the continent has the ability to take advantage of the many opportunities that are coming its way.” CAPTION 1 Dave Rennie … ‘We want to establish a presence at strategic locations along development corridors in Africa.’ CAPTION 2 Demand for Africa commodities continues to grow – despite the slowdown in China.