Grindrod sells loco assembly business

In what has been a very
trying first half, Grindrod
has recorded a whopping R1.1
billion loss for the year to June
30, after a profit of R303
million for the same period last
year.
This as revenue plunged
from R14.4bn to R11bn.
And, as a major contributor
to this overall loss, it decided
to sell its locomotive assembly
business, which was not seeing
any orders coming in from
what is currently a pretty
depressed African market –
and no prospects of an order
book in the near future.
The company’s rail business,
therefore, mounted up an
impairment (loss) of R675m.
Its loco business, which
targets customers in the
mining, industrial and
transport sectors in Africa, is
currently looking for a strategic
partner with a broader market
to service.
And, according to Grindrod
CEO Alan Olivier: “We had
interest from a number of
parties to buy the business.”
That leaves the rail sector
free to focus on its rail
operations and leasing sections.
And, to the outsider, it looks
like the African market for
these products already has a
good base. This includes an
involvement in the North-
South rail corridor, a strategic
development backed by the
three regional economic
communities – the Common
Market for Eastern and
Southern Africa (Comesa),
the East African Community
(EAC) and the Southern
African Development
Community (SADC). Their aim
is to improve the reliability of
this transport corridor.
Grindrod’s rail business
will also continue with its
rail freight service between
Beitbridge and Victoria Falls,
and servicing mining and
shunting operations in the sub-
Saharan region.