Portnet red tape blocks Mersey Docks investment

Ray Smuts CONTRARY to expectation, the deal is not quite done. Mersey Docks and Harbour Company is still intent on investing R100 million for a 50% stake in fledgling Fresh Produce Terminals, but whether this materialises depends entirely on whether various port lease agreements can be reached with Portnet. Nevertheless, the would-be British investor must feel comforted that FPT - a fusing of the four previously independent-of-each-other port cooling terminals in Cape Town, Port Elizabeth, Durban and Maputo into one company - has done pretty nicely this year. In conversation with FPT in April, when the prospective Capespan/ Mersey bonding was announced, Des Crampton, a director of Mersey Docks division Medway Ports, admitted: "We cannot go back to our shareholders and tell them we've done a bum deal." Capespan's executive director: operations Dr Dawie Ferreira told FTW the delay in the deal going through had been due to uncertainty by Portnet, caught up in the process of restructuring, on how it wished to restructure the new lease agreements. As to whether Mersey may not go ahead with its investment at the end of the day, Ferreira believes this unlikely. "They will only pull out if we cannot reach agreement with Portnet." Fresh Produce Terminals expects to turn over R177 million this year - 12% up on last year - and m.d. Ronnie Kingwill anticipates a further 20% increase next year. He believes the bringing together of the four terminals into one entity has significantly benefited South African fruit exports. "We have seen optimised utilisation of cold store space, been able to redirect traffic where there were blockages, focus more closely on each terminal and stabilise performance, in addition to enjoying greater productivity from a sound workforce, primarily in Durban and Cape Town." A significant development this past year, impacting on both FPT and competitor Southern African Fruit Terminals, is that palletised fruit has lost ground to containerised fruit. Says Kingwill: "We have both suffered loss in marketshare as containers now account for 35% of all fruit exported, FPT 50% (down 10% on last year) and SAFT 15%." However, there are bright sides too in FPT's make-up, such as successes in attracting previous customers, among them two or three of the 'Top 10' exporters, back into the fold.