TRANSNET SOC LTD AND TRANSNET PORT TERMINALS - Visit by delegation from H E Mr. André Kimbuta, Governor of Kinshasa, DRC and his delegation

Transcription

1 TRANSNET SOC LTD AND TRANSNET PORT TERMINALS - Visit by delegation from H E Mr. André Kimbuta, Governor of Kinshasa, DRC and his delegation 6 August 2013

2 TABLE OF CONTENTS TRANSNET SOC LTD TRANSNET DIVISIONS MARKET DEMAND STRATEGY PORT DEVELOPMENT 1

3 TRANSNET STATE OWNED COMPANY LTD - OPERATIONAL DIVISIONS Ports Rail Pipelines Supporting Transnet National Ports Authority (TNPA) Transnet Port Terminals (TPT) Transnet Engineering (TE) Transnet Freight Rail (TFR) Transnet Pipelines (TPL) Capital Projects Transnet Foundation Property 8 Commercial ports along 2943km of coastline Revenue R8.4bn Assets R56 bn 3558 employees 16 Cargo Terminals operating across 7 SA ports Revenue 7 bn Assets R13.5 bn employees Support TFR for rolling stock and TPT for lifting equipment maintenance Revenue 9.8 bn Assets R8.6 bn employees km of railway track 182 million tons of freight General freight & 2 heavy haul export lines Revenue 22.2 bn Assets R54.7 bn employees 18 billion litres of petroleum products and gas through km of pipelines, mainly to Gauteng Revenue 1.3 bn Assets R20.1 bn 600 employees R300 billion of capital investments over next 6 years CSI in Education, Health, Sport, Arts & Agriculture Property Management 2

4 TRANSNET SOC LTD - STRATEGIC GOVERNANCE FRAMEWORK Mr. Brian Molefe Group Chief Executive Mr. Anoj Singh Chief Financial Officer Mrs Nonkululeko Sishi Group Executive: Human Resources Ms. Nkuli Mabandla Group Executive: Legal Services Mr. Khomotso Phihlela Group Executive: Commercial Mr. Mark Gregg-Macdonald Group Executive: Planning and Monitoring + Chief Executives Operating Divisions Mr Tau Morwe Mr Karl Socikwa Mr Siyabonga Gama Mr Richard Valihu Ms Sharla Pillay Mr Charl Möller Ms Raisibe 3 Lepule

5 TRANSNET S VISION. DELIVERING FREIGHT RELIABLY Transnet will meet customer demand for reliable freight transport and handling services through: Fully integrating and maximising the use of our unique set of assets Continuously driving cost efficiencies A demonstrated concern for sustainability in everything we do 44

6 STAKEHOLDER ENVIRONMENT Success ultimately depends on a broader South African partnership and support S.A. citizens will reap benefits Transnet Performance Government departments Greater collaboration thereby creating and enabling environment for successful execution of MDS Regulators Alignment on tariff methodology and regulatory policy to create regulatory certainty Investors Continued support and access to cost effective funding to meet requirements Suppliers Partner with Transnet to deliver capital spend and achieve localisation and empowerment objectives Key customers Alignment and collaboration on growth and expansion plans and conversion to Take or Pay contracts Employees Increase in labour productivity to deliver on volume growth and MDS targets Labour unions Labour stability to support execution and competitiveness of SA freight logistics system 30% 63% 5

7 FINANCIAL AND OPERATIONAL PROFILE Turnover $ 7.2 bn EBITDA $ 3 bn Would rate in the Top 25 of the biggest SA listed firms ito turnover, if Transnet SOC Ltd was listed Contributing 1.5% to SA GDP Used to develop infrastrucure and reduce the cost of doing business by increasing capacity and enhancing productivity Assets $ 24.2 bn In Top 10 of SA s biggest firms ito assets Requires substantial maintenance to continue operating efficiently Capital Investments* $ 40 bn Employment 63,725 Equates to 75% of the Asset Base Transnet ensures the development of skills through training and development 56,354 (excluding contractors) All stats based on 2012/13 Corporate Plan unless otherwise stated *Planned investments over the next 7 years 6

8 TRANSNET OPERATES AN INTEGRATED PORT, RAIL AND PIPELINE NETWORK Transnet s Integrated Network is Underpinned by a Limited Number of Key Corridors 20,500 Km Rail Network 182 Million Tons of Cargo pa 4.3 Million Containers pa 18 Billion litres of fuel, oil 1. Richards Bay Bulk (Export coal, magnetite, Chrome) Breakbulk KZN PORTS 2. Durban Containers, Breakbulk, Agri-Bulk, Automotives 7. Saldanha Bulk (Export iron ore), Breakbulk 6. Cape Town Containers, Breakbulk WESTERN CAPE PORTS 5. Port Elizabeth Containers, Breakbulk, Bulk, Automotives 3. East London Containers, Breakbulk, Agri-Bulk, Automotives 4. Ngqura Containers EASTERN CAPE PORTS

9 COMPLIMENTARY PORT SYSTEM delivering freight reliably Bulk Iron Ore Containers - Refrigerated Bulk Coal & Minerals Containers - Gateway Cars - Mercedes Containers - Transhipment Bulk Manganese 8

10 SOUTH AFRICA s ROLE IN BRICS 9

11 SOUTHERN HUB FOR WORLD SHIPPING ROUTES The position of South Africa s ports system enables it to access to South- South trade, Far East trade, Europe & USA, East & West Africa regional trade Shortest Trade Route between Shangai and Santos is via South Africa 11,270nm = knots via Panama Canal13,130nm = 26 days + transit fee via Suez Canal 13,590nm = 27 days + transit fee 10

12 10 NEW 18,000 TEU SHIPS ORDERED BY MAERSK - To be delivered over next 3 years 11

13 EVOLUTION OF SHIP SIZES Source: Geography of Transport Systems 12

14 NGQURA ROLE AS A HUB PORT FOR TRANSSHIPMENT TRAFFIC IS TO ENABLE REGIONAL INTEGRATION Monrovia (Liberia) San Pedro (Côte d'ivoire) Lome (Togo) Takoradi (Ghana) Abidjan Tema (Côte (Ghana) d'ivoire) Cotonou (Benin) Lagos (Nigeria) Douala (Cameroon) Libreville (Gabon) Pointe Noire Matadi (Congo) Luanda (Angola) Lobito (Angola) Walvis Bay (Namibia) Mombasa (Kenya) Dar es Salaam (Tanzania) Tanga (Tanzania) Beira (Mozambique) Maputo (Mozambique) Richards Bay (SA) Nacala (Mozambique) Toamasina (Madagascar) Port Louis (Mauritius) Durban (SA) Source: Team analysis Cape Town (SA) East London (SA) Ngqura (SA) Port Elizabeth (SA) 13

15 TRANSNET DIVISIONS 14

16 TRANSNET FREIGHT RAIL Transnet Freight Rail is the largest division of Transnet. It is a world class heavy haul freight rail company that specialises in the transportation of freight. Transnet Freight Rail has approximately employees, who are spread throughout the country. The company maintains an extensive rail network across South Africa that connects with other rail networks in the sub-saharan region, with its rail infrastructure representing about 80% of Africa's total. The company is proud of its reputation for technological leadership beyond Africa as well as with-in Africa, where it is active in some 17 countries. Transnet Freight Rail has positioned itself to become a profitable and sustainable freight railway business, assisting in driving the competitiveness of the South African economy. The company is made up of the following six business units: Agriculture and Bulk Liquids Coal Business Unit Container and Automotive Business Unit Iron Ore and Manganese Business Unit Mineral Mining and Chrome Business Unit Steel and Cement Business Unit 15

17 TRANSNET PIPELINES Transnet Pipelines, the custodian of the country s strategic pipeline assets, is currently servicing two key industries liquid fuel and gas by transporting petrol, crude oil, diesel and gas products over varying distances. The business, formerly known as Petronet established in 1965, is integral to the well-being of the South African economy. It is Transnet Pipelines policy to monitor the integrity of its pipeline network continually. Transnet Pipelines is acknowledged as one of the leaders in the development of pipeline survey technology in South Africa. The business handles an annual average throughput of some 18 billion litres of liquid fuel and more than 450 million cubic metres of gases. The liquid products include crude oil as well as diesel, leaded and unleaded petrol and aviation turbine fuels. 16

18 TRANSNET ENGINEERING Transnet engineering, an operating division of Transnet SOC Ltd, is the backbone of South Africa s railway industry. TE boasts with eight product-focused businesses, 150 depots, seven factories and 15, 000 employees countrywide. The organisation is dedicated to in-service maintenance, repair, upgrade, conversion and manufacturing of rolling stock. TE manufactures freight wagons, mainline and suburban coaches, diesel and electric locomotives as well as wheels, rotating machines, rolling stock equipment, castings auxiliary equipment and services. In the past financial year TE has done nearly ZAR1 bn in business in Africa. While focus is mainly on the South African market, investment in research and development to service the specific requirements of Africa and the rest of the world has led to an ever-expanding range of rolling stock products and a comprehensive list of satisfied customers. This has further enhanced the organisation s international reputation. The proximity of the coastal plants to major ports facilitates the movement of products to and from overseas markets. 17

19 OVERVIEW TRANSNET NATIONAL PORTS AUTHORITY Transnet National Ports Authority provides port infrastructure and marine services at the eight commercial seaports on the 2,954km South African coastline. The national ports authority is responsible for the safe, effective and efficient economic functioning of the national port system, which it manages in a landlord capacity. The national ports authority operates within a legislative and regulatory environment created by the National Ports Act (Act No. 12 of 2005). The national ports authority s service offering is targeted at mainly port users which include terminal operators, shipping lines, ship agents, cargo owners and clearing & forwarding agents. The distance around the port of Durban is 21 km. Rail tracks in the port total 302 km. The port has 58 berths which are operated by more than 20 terminals. Over 4,500 commercial vessels call at the Durban port each year. 18

20 TNPA Overview Core functions (as per National Ports Act Section 11) 19

21 OVERVIEW TRANSNET PORT TERMINALS Transnet Port Terminals provides cargo handling services at 16 terminal facilities in seven ports to a wide range of customers including shipping lines, freight forwarders and cargo owners. Operations are in containers, bulk, break-bulk and automotives. We invest in state-of-the-art cargo handling equipment (ship-to-shore cranes, straddle carriers, rubber-tyre gantries, tipplers, conveyors) and manage the logistics interface with inbound and outbound rail and trucking carriers. In 2011/12 we are proud of the implementation of the NAVIS-terminal operating system and the certification of all our terminals to ISO standards. Transnet Port Terminals aims to be Africa s port operator of choice. In line with Transnet s new market demand strategy (MDS) and related investments, Transnet s Port Terminals are currently expanding in response to growing business in the country. Expansion includes creating storage capacity, the replacement of old equipment and upgrading of software. 20

22 TRANSNET PORT TERMINALS #1 Terminal Operator in Africa Company 2011 Total Throughput 000 TEU 2011 Equity Throughput ( 000 TEU) Equity TEU as % of Regional Throughput 1 Transnet 4,403 4, % 2 APM Terminals 7,640 4, % 3 Bolloré Africa Logistics 3,348 1, % 4 DP World 2,094 1, % 5 Port Said CCHC % 6 Damietta CCHC % 7 CMA CGM/Terminal Link 1, % 8 Cosco Pacific 3, % 9 Hutchison Port Holdings % 10 Alexandria CHC % Transnet s hold on the top ranking for terminal owning/operating companies in Africa will make them an ideal partner. Source: Drewry on Africa 21

23 TRANSNET PORT TERMINALS CEO Karl Socikwa delivering freight reliably Financial Capital Planning & Maintenance Risk, Security & Sustainability Commercial & Ops Planning Corporate Services Pru Archary Logan Naidoo Michelle Phillips Nombuso Afolayan Don Maclean Financial Management Information Technology Capital Planning Maintenance Research & Development Safety Health Environment Risk & Compliance Security Sales & Marketing Ops Planning Strategy Planning & Monitoring Legal Corporate Affairs Innovation & Continuous Improvement KZN Operations WC Operations EC Operations Human Resources Procurement Zeph Ndlovu Velile Dube Siyabulela Mhlaluka Dumisani Khuzwayo Ntombeziningi Shezi Durban Pier 1 Durban Pier 2 Durban Ro-Ro, Point Agri & Maydon Wharf Richards Bay Cape Town Containers Cape Town MPT Saldanha MPT Saldanha Iron Ore Ngqura PE Containers PE MPT East London Administration Talent Management Employee Relations Capex Procurement Opex Procurement

24 CUSTOMER CENTERED OPERATIONS TPT s customers include the leading shipping lines in the world. In total 37 shipping lines call at TPT s terminals. Senior officials from TPT meet regularly with shipping industry associations such as SAASOA, SAAFF, SASC, CLOF, NAAMSA, PCC, SACC and others representing shipping agents, freight forwarders, cargo agents and vehicle manufacturers. TPT s clients come from all industries mining, manufacturing, agri-culture etc. There is not a single person in South Africa whose life is not being touched on a daily basis through the goods that are imported or exported through our terminals. Customer satisfaction indexes are conducted during monthly Service Level Agreement sessions between customers and the Commercial and Planning team. On average, customers gave us a distinction (80%) in customer service in You ll seldom find customers that are always 100% satisfied, but in line with our continuous improvement drive, our intention is to move from good to GREAT in A Customer Perception Survey conducted by IPSOS in July 2012 indicated Customers rank TPT as the most efficient division in Transnet. Customers use our cargo handling services because our services, equipment and infrastructure are safe, efficient and reliable. 23

25 ACCOLADES FROM 2012/13 Accolades from Maritime bodies and our customers include: Transnet Port Terminals scooped PMR Africa Awards for Service Excellence in Durban, Richards Bay, Ngqura and Cape Town. CNBC awarded TPT the Business Success in Africa Award Africa Ports and Harbours, rated TPT as the Safest Terminal Operator on the African continent in 2012/13. MAERSK, the world s largest ocean carrier and container shipping company ranked TPT Port Elizabeth Container Terminal s performance as the highest in Africa for most moves per hour between January and March Ngqura Container Terminal (NCT) topped the world terminals in year on year volume growth. The April 2013 edition of Container Port Insight from the Drewry Maritime Research Company listed NCT as the fastest growing container terminal in the world. NCT s volumes more than doubled, peaking at 129% year-on-year in February 2013, thanks to an upsurge in transhipments. TPT is ranked as the largest terminal operating company in Africa according to Drewry Maritime Research. 24

26 The Business of Port Terminals MARKET SHARE IN MAJOR SECTORS Market Size 4.3m TEU 132mt 670, % mt 32mt Competitors TPT Containers and Dry Bulk contribute to 85% of TPT s volume revenue 25

27 DURBAN 26

28 DURBAN CONTAINER TERMINALS 27

29 DURBAN MPT TERMINALS POINT RORO 28

30 DURBAN MPT TERMINALS POINT RORO DURBAN MPT TERMINALS MAYDON WHARF, AGRI

31 RICHARDS BAY DURBAN MPT TERMINALS POINT RORO RICHARDS BAY TERMINALS 30

32 RICHARDS BAY DRY BULK TERMINALS 31

33 DURBAN MPT TERMINALS POINT RORO PORT ELIZABETH 32

34 DURBAN MPT TERMINALS POINT RORO PORT OF OF NGQURA 33

35 PORT OF EAST LONDON 34

36 PORT OF CAPE TOWN 35

37 SALDANHA BAY 36

38 PROCUREMENT MARKET DEMAND STRATEGY 37

39 CUSTOMER CENTRIC STRATEGY - From an idea to a full business strategy Idea Unconstrained Customer demand Improved Vessel turnaround time Process improvement Strategy Formulation Market Demand Strategy Focus on new capacity Diagnostic New Methodology - ECICS Potential identification Understanding the customers business Client Interaction Personal Visits 3 rd Party Interviews Focus Groups B2B Inter-action CLOF, SAASOA, SAAFF Roll out Infrastructure Investment People development Business Process Improvement

40 INFRASTRUCTURE DEVELOPMENT Looking ahead, Transnet s newly formulated Market Demand Strategy (MDS) will see R300bn spent over the next seven years to create freight capacity before demand across rail and ports infrastructure and equipment in South Africa. Of this amount, TPT is poised to spend R33bn and TNPA R46.9bn to boost port operations and facilitate unconstrained growth. The MDS sets out how Transnet intends to grow revenues and business from its operation over the next seven years. Transnet also has in place a strategy to grow business outside of South Africa, by forming partnerships with other ports to enhance efficiency of transport infrastructure, services and key transport corridors to strengthen the economic and social development of the African continent. TPT and TNPA are able to provide operational, technical and systems advice to other ports, and improve intermodal connectivity for existing and new markets in the SADC-region. Never before has any company invested so aggressively in creating capacity ahead of demand on the African continent. 39

41 MARKET DEMAND STRATEGY (MDS) OVERVIEW Volume growth Capital Investment - Increase/influence the market Create & manage infrastructure capacity ahead of demand. - Provision of port infrastructure to facilitate growth - Improve productive use of assets Enhance the ports position as integrated gateways for trade Operational efficiency & safety Improve port efficiency - Improve vessel and cargo turnaround time - Enterprise wide Risk management - Develop Human Capital and skills to achieve objectives Financial sustainability Capital delivery & service levels - Increase volume, revenue and contain costs 40

42 TPT 10-YR CAPEX HISTORY (Rm) Investment climbed from R131m in 2001/02, peaking at R3.2bn in 2008/09 TPT Investment (R2,363m) (5 years: 2001/02 to 2005/06) TPT Investment (R10,277m) (5 years: 2006/07 to 2010/11) Port concessioning dilemma Infrastructure backlog catchup & expansion drive Global recession & investment cutbacks 2001/ / / / / / / / / /11 41

43 MARKET DEMAND STRATEGY (MDS) Total Transnet ZAR300bn, TPT ZAR33bn 2012/ /19, peaking to ZAR9.5bn in 2016/17 Boomtime Ends Global recession Market Demand Strategy TPT R33bn 7yr Investment Plan / / / / / / / / / / /19 7 Sishen -Saldanha Export iron ore ZAR25.4bn Port Terminals: ZAR5.82bn TNPA: ZAR4.4bn Richards Bay corridor Export coal line ZAR32.1bn Port Terminals: ZAR12.4bn TNPA: ZAR5.7bn Durban Multi Product Pipeline ZAR9.4bn Port Terminals: ZAR7.4bn TNPA: ZAR21.5bn Cape Town Port Terminals: ZAR465ml TNPA: ZAR3.4bn Eastern Cape Port Terminals: ZAR6.7bn TNPA: ZAR11.9bn 42

44 CAPACITY AHEAD OF DEMAND The Port of Durban is undergoing a multi-year project to ramp up of capacity ahead of projected demand. Planned extension of the Pier 1 terminal into Salisbury Island will increase current capacity from 700,000 TEUs to a potential 1.3-million TEUs by Pier 2 capacity is to be increased from 2.1 million TEUs in 2011/12 to 2.5 million TEUs by 2013/14 and 3.3 million TEUs by 2017/18. Berths 203, 204 and 205 on DCT s North Quay is currently being taken out of service one at a time to undergo deepening and refurbishment over a 74 month period which started in June Container capacity is also being created in other niche terminals such as the Durban RO-RO and Maydon Wharf Terminal (a predominantly break-bulk and RORO facility, with specialised capacity to handle containers), through the acquisition of new equipment, such as mobile cranes, and various infrastructure upgrades to deal with the container traffic diverted from DCT during the capacity upgrade. 43

45 INVESTMENT IN KZN PORTS IN THE NATIONAL CONTEXT MDS is expected to create 15,000 direct and up to 588,000 indirect job opportunities across the economy 44

46 HUMAN CAPITAL PORT DEVELOPMENT 45

47 NGQURA CONTAINER TERMINAL MDS - PORT EXPANSION PLANS Port - EVOLUTION of Ngqura OVER 10 YEARS AFTER: 2010 Ngqura Container Terminal BEFORE: Coega River mouth Nov-2002 current: 2013 Ngqura Container Terminal Futuristic Expansion Options

48 DURBAN MPT CONTAINERS TERMINALS POINT RORO PORT OF NGQURA - CURRENT LAYOUT Salisbury Island Navy Base DCT Pier 2 DCT Pier 1 DCT Reconfiguration Study

49 DURBAN MPT CONTAINERS TERMINALS POINT RORO PORT - POSSIBLE OF NGQURA FUTURE LAYOUT Consolidated Salisbury Island Navy Base Interim upgrade of Pier Rail Terminals Pier 1 with new Salisbury Island infill and deep-water berths Total cost: R 6.3b Pier 2 with deepened berths and new tandem cranes Total cost: R 5.6b DCT Reconfiguration Study

50 DURBAN MPT CONTAINERS TERMINALS POINT RORO PORT LONG OF TERM NGQURA POTENTIAL LAYOUT New rail terminals and back-of-port facilities Infill between Pier 1 and Pier 2. Durban Container Terminal reconfigured to RMG operation DCT Reconfiguration Study

51 DURBAN FUTURE EXPANSION MPT TERMINALS PLANS FOR POINT DURBAN RORO PORT - Ex Durban OF NGQURA International Airport (DIA) Site Port of Durban Mondi Sapref Refinery Isipingo Old Durban Airport Umlazi N2 Freeway Toyota Factory 50

52 DURBAN FUTURE PLANS MPT TERMINALS FOR DURBAN POINT RORO PORT - Artist s OF NGQURA View of the new Dig-Out Port at ex-dia Site Port of Durban New Dig-Out Port Liquid Bulk Terminal Breakwater and Entrance Channel Container Terminals Automotive Terminal 51

53 DURBAN DIG OUT PORT TIMELINE Source: Overview of the Proposed Durban Dig-Out Port Project (DDOP) 10 June 2013, Marc Descoins 52

54 CRITICAL MILESTONES Source: Overview of the Proposed Durban Dig-Out Port Project (DDOP) 10 June 2013, Marc Descoins 53

55 SINGLE BUOY MOORING Picture by Chris Hoare, courtesy SAPREF 54

56 ~75% OF SA s CRUDE OIL IS PUMPED BY SBM 55

57 PHASE 1: 4 BERTH CONTAINER TERMINAL 56

58 PART OF INTEGRATED LOGISTICS CORRIDOR Upgrading of intermodal terminals & construction of new super terminals within the Gauteng area Rail corridor upgrades to match port expansion plans & significant migration of road to rail freight on corridor Rail corridor upgrades to match port expansion plans & significant migration of road to rail freight on corridor Back-of port logistics facilities and supporting road infrastructure to be developed 57

59 INLAND SUPER TERMINALS 58

60 DURBAN DIG OUT PORT - SUMMARY VISION: Largest container port in Africa World-class port in terms of efficiency World-class supply chain Leading-edge green port Community port State-of-the-art security STATISTICS 800 hectares of land to be acquired 70 million m3 of material to be dredged 3,5 million tonnes of rock 2,5 million m3 of cement tonnes of reinforcing steel 14,5 million m3 earthworks EXPECTED BENEFITS Expected Capex Impact on GDP of R48 billion Expected Operational Impact on GDP of R56 billion (per annum at full operation). Income/wages generation during construction KZN impact estimated at R24 billion Expected to create approximately construction jobs Expected to create approximately operational jobs Reduced total logistics cost (Source: Transnet Durban Airport Site Expansion, Port Panning Study, March 2011) 59

61 POSSIBLE SERVICE OFFERINGS FROM TRANSNET TO THE DRC 1. Operator lifting Equipment Training: Theoretical training on Reach Stackers, RTG's, Tractor Trailer Combo and the use of Spreaders in South Africa followed by a period of practical on-the-job mentorship on site. 2. Container Terminal Management Development: Theoretical training focussed on the processes and procedures related to operation of container terminals. 3. Management: TPT can second key management resources to assist in the management of port terminals in the DRC, either on a consultation or on a longer term contract. These resources can assist with policy, process and standard operating procedure development. 4. lct: TPT can provide various technology solutions like a tailor-made Terminal Operating System, lct-infrastructure improvement or even linking to customs via EDI. 5. Capital Projects and Procurement: TPT can assist with: a. port expansion feasibility studies using computer simulations. b. sourcing equipment via its major suppliers. c. provision of maintenance systems and spares. 6. Equipment that is being replaced in South Africa before it has exceeded its useful life could possibly be allocated to projects elsewhere in Africa. 60

62 IMPACT OF BRICS delivering freight reliably

63