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058 - Scenarios Ports have to be intelligent as foxes 059 | 061 - Essay SA feels EU pinch 062 - Briefings Transnet to create 15,000 Naamsa optimistic Jobs Maersk reacts to weak figures

Edition 2012/13

Port of Durban


B BUSINESS Scenarios, Clem Sunter

PORTS HAVE TO BE INTELLIGENT AS FOXES PREFACE Ports, like other businesses and organisations, have to plan their future carefully whilst keeping a close and anticipating eye on world developments, argues futurist and strategist Clem Sunter. WRITER Clem Sunter ILLUSTRATIONS acm + Floyd Paul

My co-author Chantell Ilbury put it elegantly

tial characteristics for a growing business.

pack. Which one wins will very much depend

the other day. We have moved from the In-

The questions I would put to the manage-

formation Age to the Age of Intelligence,

ment of the Port of Durban are: In handling

simply because we now have all the informa-

costs used to ship cargo to your customers,

tion at our fingertips. However, real knowl-

If China’s economy continues to grow at

how does your port compare to all other

edge comes from sifting through and intel-

8 to 10% per year, then all nations supplying

ports? What is unique about your relation-

ligently interpreting that information for

China - including African countries - will do

ship to customers? Do they see you as

what it means about our future.

well and we are in ‘Ultraviolet’. Should China

real value for money, even where your

Foxes – the animals that is – naturally

fall over a cliff like Japan did in 1990, then it

competitors can offer a cheaper deal for

do that. They have the bright eyes to look

will be ‘Hard Times’ for everyone.

certain services? Where do you feel you

around them all the time, to see what is go-

An intelligent fox will take either

are coming short? What are you going to do

ing on in the forest. They have the instinct

scenario in his stride, since it is not contra-

about it?

dictory to offer value for money to custom-

to recognise the signals for food and danger.

on how China performs for the rest of this particular decade.

ers and expand port facilities in expectation

Most importantly, foxes have the speed and

Our second mainline scenario we call ‘Ultra-

quality of response to take advantage of

of a higher volume of exports and imports at

violet’. In this projection, the Old World econ-

opportunities to feed themselves and to

the same time.

omies like America and Europe experience a

escape threats. That is why they survive.

five-year ‘U’ whereas New World economies

In a highly uncertain time we live in, the

like China, India, Africa and South America

intelligence and agility of a fox are required

undergo a V-like recovery. In addition, they

for any organisation to cope with the range

grow at least three times faster than their

of surprises that the future can throw at it.

Old World colleagues.

How would, could and should a Port

The questions I would ask Port Manage-

Authority think like a fox? Let me give some

ment in this scenario are: Does your port have


the capacity to handle the extra traffic that will result from Western companies chasing

The favourite scenario that Chantell and I

the ‘V’ in Africa and also from the growth in

are putting forward for the next five years is

African exports to New World economies? If

‘Hard Times’, a flat-line low economic growth

not, what do you plan to do about it?

for the global economy as a whole. In this scenario, offering value for money

Both these scenarios are in play. Both are

and being the cheaper alternative are essen-

like a pair of racehorses that are leading the

058 Port of Durban

Foxes prepare for all possibilities. Clem Sunter was born in England in 1944 and moved to Zambia in 1971 to work for Anglo American. Two years later, he was transferred to Johannesburg. In the 1980s, Clem established a scenario planning function in Anglo. Well-known is his presentation ‘The World and South Africa in the 1990s’, in which he offered two scenarios for South Africa: the ‘High Road’ of negotiation leading to a political settlement, and the ‘Low Road’ of confrontation leading to civil war. South Africa took the High Road. Since 1987, Clem wrote 14 books, including ‘The Mind of a Fox’ (2001), co-written with Chantell Ilbury. It hit the shelves before 9/11, and anticipated a major terrorist attack on a western city.

Port City Publications

B BUSINESS SA feels EU pinch, Essay

SA FEELS EU PINCH PREFACE As the Eurozone crisis seems to worsen, South Africa is feeling the pinch in terms of its exports to largest trading partner Europe. It is not all bad news, however. South Africa is positioned to weather the storm, and some opportunities could mean longer-term benefits.

European countries purchase almost a third

Under normal circumstances, a balance of

of all South Africa’s manufactured exports

payment deficit would merely result in an

and despite positive developments, the Eu-

exchange rate depreciation.However in the

rozone’s economy is expected to experience

Eurozone this is impossible due the single

a recession this year in the face of wide-


spread fiscal austerity and tight bank lending conditions.

‘Therefore, a more complicated solution of internal devaluation was developed,’

‘Therefore the demand for South Africa’s

he says. ‘This involves reductions in costs

exports is expected to decline,’ says Saijil

and expenditure for the southern European

Singh, lead analyst at Coface South Africa.

countries and an increase in consumption

The Coface Group offers companies around

of southern European goods by northern

the globe solutions to protect them against

European countries to correct this imbal-


the risk of financial default of their clients -

ance. The result is less demand for South

Bianca Wright

both on the domestic market and for export.

African goods.’

ILLUSTRATIONS acm + Daniel Ting Chong

According to Statistics South Africa, North versus South Singh



South African exports to the European Union the



(EU) for the first quarter of 2012 amounted

Europe originated partly due to a balance of

to ZAR36.9-billion. This is almost 23%

payment difference between the northern

of our nation’s total exports value. Spain

and southern countries. The decrease in

accounted for R1.9-billion of this total, and

competitiveness of the southern European

Greece for just over ZAR152.2-million.

countries, such as Spain, Italy, Greece and

South Africa’s primary exports to the

Portugal, resulted in balance of payments

EU are fuel and mining products (27%),

deficits which had to be funded by borrowing

machinery and transport equipment (18%)

from the northern European countries

and other semi-manufactured goods (16%).

including France, Germany and the United Kingdom.

Edition 2012/13

Port of Durban


B BUSINESS Essay, SA feels EU pinch

‘SA is Europe’s largest trading partner in

governed by the Trade, Development and

Southern Africa. Surprisingly, the shipping

Africa. South African exports to the EU has

Cooperation Agreement (TDCA). This deal

company has found that the European mar-

been growing and the composition of those

was signed in Pretoria on 11 October 1999

ket has remained one of the most stable

exports is becoming more diverse,’ says

and aims, inter alia, to establish a free trade

trades, despite all the problems.

David Hamer, Tradepoint manager at the

area over a 12 year period covering 90% of

Nelson Mandela Bay Business Chamber.

bilateral trade.

Matthew Conroy, trade and marketing manager at Maersk Line South Africa, says

‘South Africa is gradually moving from

Hamer stresses that South African ex-

there has been minimal impact on the com-

mainly commodity-based products to a more

ports to Europe have been hit hard by the

pany’s imports from Europe. On the export

diversified export profile, that includes

euro crisis. He explains that the problems

side, there have been slight decreases in the

manufactured products.’

in Europe have reduced the available credit










to the European business and consumer. In

‘As an example, fruit volumes to Europe

other words: it has become a lot harder for

have decreased. However, we have seen

them to borrow money.

in some instances how fruit that normally

established in 2000 by the United Nations

‘In addition, the austerity measures

goes to the EU has been exported to other

Conference on Trade and Development.

brought in by governments to reduce debt

destinations,’ says Conroy, adding that fruit

Hamer manages the Nelson Mandela Bay

levels have reduced disposable incomes at

(deciduous and citrus) is one of Maersk

Tradepoint satellite, one of 170 around the

all levels. Although the Rand has weakened in

Line’s main export products to Europe.

world. The branch aims to increase the vol-

recent months, it has been very strong mak-

Other exports are wine, tobacco and auto-

ume and value of exports from South Africa

ing exporting more difficult whilst making

motive parts. The relations between South

by identifying and assisting emerging ex-

European imports cheaper,’ he says.

African customers and their counterparts in

porters to become export ready.

Europe are vital for on-going trade.

South Africa’s trade relations and

One of the enterprizes that are keeping a

development co-operation with the EU are

close eye on the Europ crisis, is Maersk Line

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nothing too heavy, nothing too high 060 Port of Durban

Port City Publications

B BUSINESS SA feels EU pinch, Essay

Conroy notes that a slight decline has been

sion and debt crisis in the Eurozone,’ the or-

and other emerging economies have contin-

noted in the general fruit market for Europe.

ganisation stated.

ued to grow,’ Hamer says.

years and is not necessarily as a result of the

It is not the first time that economic turmoil

While Europe is still undeniably important,

Euro crisis.

in the West have impacted on South Africa.

Asia has surpassed Europe as an export mar-

This has been something of the past four

While all sectors have been affected,

During 2008/ 2009’s global recession, the

ket for South Africa. Should the European

tourism has been hit hard with the downturn

Rainbow Nation also felt the touch of global

sovereign debt crisis not be contained, then

in consumer spending by the Europeans and


this could have significant ramifications

the stronger rand.

Hamer explains, though, that the current

for the future. ‘For example, there could be

Hamer adds that the motor and ma-

Euro crisis has been like a slow motion car

a reduction of European development as-

chinery sector, wine export and agriculture

crash. ‘When Lehman Bros failure marked the

sistance, a further fall in demand for South

have also suffered. ‘The main commodity

start of the global crisis in 2008, the writing

African exports into Europe,’ Hamer warns.

exports, such as gold, coal, platinum and so

was on the wall in Europe then. However, for

‘These liquidity risks could affect South

on have held up as despite the strong rand,

a variety of political reasons, Europe has

Africa’s inflows of Foreign Direct Investment.’

the sector has been buoyed by demand from

now diverted attention away to the US and

China and also a global commodity boom and

UK until the problems of Greece could no

strong prices,’ he says.

longer be swept under the carpet,’ he says.

The National Association of Automobile

from West to East and from North to South

Manufacturers of South Africa (NAAMSA)

and the Euro crisis has served to accelerate

confirms that the crisis will impact on SA’s

this trend. ‘South Africa has weathered the

vehicle exports. ‘Vehicle exports into Europe

events in Europe better than most, whilst

were likely to soften as a result of the reces-

the West has been gripped by recession; SA

He notes that economic power is shifting

Edition 2012/13

Port of Durban


B BUSINESS Briefings

Transnet to create 15,000 Jobs

of the energy grid. He said that by 2020, another 11.719MW would come on-line in


South Africa and 6500km of transmission

Transnet’s ZAR300 million national infra-

network laid.

structural upgrade will create 15.000 direct

He expected Transnet to procure 1317

jobs and another 220.000 indirect employ-

locomotives and 25.000 wagons and replace

ment opportunities.

6405km of railways for general freight, coal

‘At the moment our impact in the job

and ore lines by 2020. This would boost rail

market as Transnet is about 368.000 people ... by 2016/17 at the height of the MDS (mar-

Some media misinterpreted the minister’s

ket demand strategy), the number of addi-

statements as if Transnet would create over

tional jobs that will be created is 220.000,’

half a million new jobs between 2012 and

Transnet’s CEO Brian Molefe said in May


2012, in response to the budget vote speech

Apart from addressing job creation,

by Public Enterprises Minister Malusi Gigaba.

Gigaba spoke about Eskom’s expansion

capacity by nearly 150 million tons. – (NJ) Source:

Naamsa optimistic SOUTH AFRICA The National Association of Automobile Manufacturers of South Africa (NAAMSA) said it expected the South African domestic new motor vehicle sales to grow by 7.5% in 2012. Commercial vehicle sales too, could ‘surprise on the upside’, the organisation said. Releasing the first quarter statistics in May, NAAMSA director Nico Vermeulen said several factors boded well for higher sales. These factors include a GDP growth rate of

demand from the rental car industry.

exports into Africa, coupled with the Ford global compact new programme and the new

Export sales depended on the global market

BMW three-series export programme, may

performance and Vermeulen expected Euro-

propel the industry to achieve figures similar

pean demand to soften due to the recession

or slightly lower than 2011. – (NJ)

finance for consumers and the strong

and euro zone debt crisis. However, higher


Maersk reacts to weak figures

The world’s largest container shipping

creased volumes.

2.9%; prevailing low interest rates; a boost in motor vehicle affordability; new models coming to the market; easier access to


company, Maersk Line, will reduce its global

Meanwhile, Maersk Line won Best Global

corporate centre employee contingent by

Shipping Line and Best Shipping Line Asia-

400 (-18%).

Europe awards at the annual Asian Freight

Maersk Line chief executive officer

and Supply Chain Awards.

Søren Skou said the move was an answer

Head of sales east China Mike Fang said

to industry over-capacity and weak freight

the victory reaffirmed the company’s focus

rates. It aimed to achieve faster decision-

on reliability, ease of doing business and

making and relocate executive and service

the environment. He said: ‘It is a solid en-

tasks to dedicated country offices, aiming

dorsement from our customers for our daily

to achieve closer customer relationships.

service which has changed the industry by

The shipping line division, which employs

delivering on promises and saving costs.’ –

25.000 internationally, including 2200 in


the global centres, reported a ZAR5.03


billion (US$599 million) loss for the 2012 Søren Skou

062 Port of Durban

first quarter. It expected the full-year figures to be down on 2011 despite in-

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