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
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-
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
both on the domestic market and for export.
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.
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.
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
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.
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,
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
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-
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
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: www.fin24.com
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
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-
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-
Port City Publications