AfricaSouth

SOUTH AFRICA

Irvaan Maharaj Business Development Manager: South Africa

The economy of South Africa is the second largest in Africa. As a regional manufacturing hub, it is the most industrialised and diversified economy on the continent. The country has a comparative advantage in the production of agriculture, mining and manufacturing products relating to these sectors.

As a leading economy, many global corporates operate their continental and regional head quarters from here. Due to this fact, the WBCG’s Business Development Office in this market plays a crucial role in forging strategic relationships with these multinationals.

SOUTH AFRICA’S ECONOMIC OUTLOOK

Currently the value of imports and exports per quarter equates to roughly 60% of South Africa's Gross Domestic Product (GDP). So trade is an extremely important part of the South African Economy. The overall size of imports and exports as a percentage of our economy points to the fact that South Africa is a very open economy. A closed economy would be a country that does not trade a lot and manufacture or supply its local market with mostly domestically produced/manufactured goods. Due to South Africa's economy being so open, it does lend itself to greater volatility as the local economy is in a large part influenced by global events and economies.

South Africa's Revenue Service (SARS) released the latest trade statistics numbers and looking at South Africa's top 5 trading partners for both imports and exports as well as covering the value of our exports and imports.

Exports: 1. China (10.1%) 2. Germany (8.6%) 3. United States (7.3%) 4. United Kingdom (5.5%) 5. India (5.1%)

Imports: 1. China (19.2%) 2. Germany (7.8%) 3. United States (6.5%) 4. India (5.5%) 5. Nigeria (5.0%)

Total value of goods traded : Exports: R 116,902,027,397 Imports: R 110,804,693,420

Gauteng is by far the biggest contributor to South Africa's GDP, with it contributing more than double than what KwaZulu-Natal, the second biggest contributor to South Africa's GDP contributes. The Western Cape is the third biggest contributor to South Africa's GDP. The Durban harbor is the busiest port in South Africa and KwaZulu-Natal has the the Richards Bay Coal Terminal, a dedicated port for South Africa's massive coal exports.

HOW HAS NAMIBIA POSITIONED ITSELF

Some entities in Botswana, Zambia and Zimbabwe consider Namibia to be the fastest trade gateway to global markets. Port of Walvis Bay has seen an increase of copper from Zambia and the Democratic Republic of the Congo (DRC) and is expected to handle an increased amount of the commidity fom these countries in the future. Both countries are among the top 10 copper producers in the world. The expectations of Namport customers, which are predominantly major shipping lines, is that the port authority continues to focus on productivity, reliability, efficiency, and cost effectiveness.

The majority of the customers based in South Africa make procurement decisions for their offices in other SADC countries. Some of these customers are starting to show a keen interest on how to facilitate their cargo via port of Walvis Bay, specifically for cargo for the Botswana, Zimbabwe, Zambia and DRC markets. Feedback received from the market indicates that it makes more economic sense to move cargo via Port of Walvis Bay as it is a feasible alternative trade route.

The on-going challenges at the South African ports, provides an opportunity to present the ports of Walvis Bay and Lüderitz to the market. The port’s efficiency and the security of route have nudged cargo owners to consider and utilise the Namibian gateway into the region.

BUSINESS DEVELOPMENT ACTIVITIES

South Africa has a large number of global and procurement decision makers who influence a lot of the international players concerned with investment and trade opportunities. We have been able to intercede and facilitate various projects as opportunities for the South African market in Namibia. Customers vary from freight forwarders, cargo owners and transporters and shipping lines who continue to utilise the port of Walvis Bay because it is centralised for the SADC region and to the rest of the world.

During the reporting period, WBCG’s South African office has worked on numerous feasible projects with members and prospective corridor users. Some of the projects are aligned to the various corridors, especially the Trans Kalahari Corridor (TKC), the Walvis Bay-Ndola-Lubumbashi Development Corridor (WBNLDC) and the Trans Oranje Corridor (TOC).

A number of projects have called for the collective efforts from the WBCG’s business development offices. The business development team stationed in the various markets, work in synergy to attend to client needs and requests.

A key collaboration between the South African office and the Brazilian office is to realise the company’s mission to develop a direct call from Brazil to Walvis Bay. Great efforts have been made to investigate

how cargo destined for the southern African market originating from Brazil can be imported via Walvis Bay. There is further collaboration on numerous projects with counterparts at the WBCG’s Zambian and DRC offices for potential cargo destined for the Zambian and DRC markets.

The synergised efforts have started yielding results, as the WBCG’s business development team have secured cargo via Walvis Bay. These include automotive parts for Botswana from China, frozen foods for Zambia and Botswana from various main ports in South America and copper cathodes from Kolwezi to China. Additionally, constraints at the port of Durban have resulted in importers and exporters bypassing Durban in favour of less busy ports in the region, like Walvis Bay. With the new container terminal commissioned at the Port of Walvis Bay in August 2019, the port has become more attractive to the shipping lines. A moderate amount of cargo has been successfully diverted from the port of Durban and the North South Corridor, and now moves via the port of Walvis Bay on the Trans Kalahari Corridor and Walvis Bay-Ndola-Lubumbashi Development Corridor. Clients looking for a time efficient and secure logistics solution are happy to use Walvis Bay. During the reporting period, the office has focused on facilitating discussions on increasing cargo through the port of Lüderitz, in an effort to revive the Trans Oranje Corridor. A great opportunity of cargo for this corridor exists with manganese mines in the Northern Cape, which offer a maximum production output of between 600 000 - 1000 000 tonnes of bulk manganese per annum. While these mines are still under construction to be commissioned in 2021, a team which includes Namport and key strategic partners and WBCG members have started discussions to offer logistics solutions via the Port of Lüderitz.

While the rail link from the port of Lüderitz to South Africa has great potential, a major challenge is the limit on the railway line’s capacity due to an upgrade required on a section of the railway line. Mining houses require the rail to carry more than 30 000 tonnes of bulk manganese, in order to make it economically viable for them to use the route. TransNamib is currently working on a solution and continues to update the potential clients.

ACHIEVEMENTS

AVZ Minerals Limited is one of the largest mineral exploration company focused on developing the Manono Project which is one of the world’s largest lithium deposit project in the DRC. We invited the Managing Director to visit Namibia in December 2019 where we arranged meetings with our Stakeholders, TransNamib, African Union Cargo, Namport. AVZ Minerals Limited was greatly satisfied to meet the team and to see our operation set up in Namibia especially the efficiencies and benefits at the port of Walvis bay at the new container terminal .We are making excellent progress were we are discussing 250 000 T Bulk lithium deposits from Manono ,DRC via the port of Walvis Bay.

During the new Container Terminal commissioning in August 2019 I Invited various sectors of the industry from cargo owners, transporters and the shipping lines in South Africa who attended the commissioning of the Namport container terminal and arrange meetings with our members in Walvis Bay to discuss potential imports via the port of Walvis Bay.

The TKCS/WBCG information session which was held February 2020 was fully subscribed with over 130 customers where I invited the SA market to see the potential of Namibia for logistics and trade.

Secured three new members to be part of the Walvis Bay Corridor Group.

Facilitated and secured approximately 5000 t per month of commodity frozen foods from various main ports in South America via the Port of Walvis Bay and worked on this project with Namport.

THE WAY FORWARD

The Gauteng market remains the biggest opportunity to ship imports and exports from Europe and the Americas via Walvis Bay in less than 25 days to their destination the industrial heartland of Southern Africa. Our service offering regarding Europe and the Americas remains the best in transit time and we are therefore focusing on our long-term strategy to build volumes as we manage to convince the relevant stakeholders of the time saving and security benefits.

The Walvis Bay Corridor Group offers a unique service to the logistics industry. Developing and maintaining relationships with all customers and members of WBCG is absolutely fundamental. A combination of persistence and service delivery have seen the business development efforts of the Walvis Bay Corridor Group’s South African office grow steadily, with tangible outcomes as a result. The way forward will be to maintain relationships especially with customers on key projects that want to facilitate their cargo via the port of Walvis Bay. Persuade and strongly encourage as much customers to visit Namibia, meet our logistics members and stakeholders and a site tour of our new and old container terminal in Walvis Bay.

We have been hard at work introducing new clients to the concept of the Walvis Bay route. A list of projects was compiled which we use as a baseline to develop business over the medium to long term. As part of this process market intelligence is gathered and new business opportunities are created for the members of the WBCG. Through interaction with our members we also aim to offer a better service to importers and exporters in the Gauteng market.

Our passion for what we do makes us pioneers in our sector.