Stronger rand cuts back export volumes at MPT

RAY SMUTS FRESH PRODUCE Terminal’s monopoly could be under threat in the port of Cape Town should South African Port Operations decide to invest in a terminal of its own, backed by a number of industry players. “We are looking at a 5 000-pallet, R60 million cooling facility for fruit at E-berth which would effectively make us a competitor to FPT, but the facility will not be brought in from a competitive point of view. “The only thing that will hamper us is the freight rates. It is still cheaper to send fruit by container,” says Earl Peters, acting business unit manager at the multi-purpose terminal. Looking at the past financial year (April 2004-February 2005) Peters says last year got off to a good start with budget up 14% within the first few months, but the strong rand has been responsible for “feeling the pinch” from mid-year to date, specifically in cement exports (83% down) steel (78% down) and fruit pallets (41% down). “To date we are down 24% in terms of volume and 14% in terms of rand value. We anticipated last year that the rand would level out at about R6.58/dollar but that is not good enough for us to export. If we wish to export we must look at a number of R7.20/dollar,” says Peters, adding, “only then will you find your cement, steel and even fruit moving.” Encouraging for Sapo is the recent alliance with LauritzenCool/Seatrade and Southern African Fruit Terminals, operating from E-berth. This is expected to yield an additional 170 000 pallets. Two fruit ships are calling weekly to load a combined 10 000 pallets. “Given the adverse conditions in which we have operated over the past financial year, we have done well despite being down on revenue and also on operating expenditure, which has left us virtually at break-even on operating profit.” Regarding capital investment at the MPT, Peters says the R7 million resurfacing of the Combi-terminal is complete as well as the R3 million resurfacing of the area between the Combi-terminal and H-berth. This is part of a R55 million resurfacing project to carry through till 2008/09.