Last week saw the official
opening by ArcelorMittal
South Africa (Amsa) of
an interim distribution
centre in Isando,
Johannesburg that will
increase Transnet’s market
share of steel products
transportation from 13% /
400 000 tonnes in 2016/17,
to 34% / 1 000 000 tonnes
by 2018, in line with
Amsa’s growth projections.
It will facilitate a
large-scale shift of freight
from road to rail, seen by
Transnet as crucial for the
success of the country’s
integrated transport
strategy, which could result
in 42 000 fewer truck
journeys being undertaken
annually between Amsa’s
production plants and the
Isando hub.
Transnet Freight Rail
(TFR) will provide a
dedicated rail service
to Isando from Amsa’s
Newcastle and Saldanha
plants, promising reduced
lead times for Amsa’s
customers, domestically
and within SADC.
Around 700 000 tonnes
of steel will be railed to the
facility this year, creating
revenue of R100 million
plus for TFR, revenue that
would otherwise have been
spent on road transport.
In 2016, Level 4 BEE
company Amsa moved
10 million tonnes of
steel on TFR’s facilities,
at a cost of R3 billion.
Simultaneously, it paid
R700 million to truck
owners, with
2.5 million tonnes of steel
moved by road.
Amsa CEO Wim
de Klerk said TFR’s
shortcomings meant that
around 1.3 million tonnes
of total Amsa product was
taken by trucks, of which
iron ore constituted 900
000 tonnes, for which
Amsa paid an additional
R535 million.
Over two years in the
making, the Grindrodoperated
facility will
support the strategic
direction of Amsa’s steel
distribution programme
and is the result of a
determined, collaborative
effort between Transnet,
Barloworld Logistics,
Amsa, Grindrod and
Newlyn Investments.
Barloworld Logistics put
together the rail terminal
– within four months – and
will continue to optimise
and interface with
various components of the
steelmaker’s supply chain.
Department of Trade
and Industry Minister,
Dr Rob Davies, explained
that government had
provided support to Amsa
with tariff adjustments,
and through redefinition
of the designation for
its Infrastructure Build
Programme (IBP).
South African-made
steel products now qualify
for the IBP’s localisation
determinations.
The steel industry
contributes 1% to
the country’s GDP
and provides direct
employment to between
100 000 and 200 000
people, not including
sub-contractors and
downstream beneficiaries.
On December 2, 2016
Amsa transported steel
from Newcastle to the
Randfontein intermodal
terminal, the first time
that facility had received
rail cargo in almost 15
years, following a sixmonth
revitalisation
project.
That marked the
beginning of a process that
will see the construction of
a R140-million dedicated
distribution centre for
Amsa at Grindrod’s
intermodal terminal in
Denver, Johannesburg,
over the next three years.
ArcelorMittal South Africa CEO Wim de Klerk and Minister of Trade and Industry Dr Rob Davies
cut the ribbon at the opening of the Isando facility.
