SA port terminals were a hindrance in economic recovery: Vinpro

SA port terminals were a hindrance in economic recovery: Vinpro

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The status of South Africa’s port terminals was proving an obstacle to the country’s economic recovery during the Covid-19 pandemic, said South African wine producers, cellars and industry stakeholders Vinpro on Wednesday.

Vinpro managing director Rico Basson said that for this reason, they, therefore, welcomed President Cyril Ramaphosa’s announcement that the national port authority would become an independent affiliate of Transnet.

“We are especially optimistic that the revenue that will be generated would be utilised to reinvest in the port infrastructure, the replacement of old equipment and the renewal and expansion of the ports, as well as working capital,” said Basson.

This would entail a clear separation between the roles of the infrastructure owner, the Transnet National Port Authority, the terminal’s management and Transnet's port terminals. It meant that all the entities would operate more independently and more efficiently, with the added advantage that the private sector could work together and join hands with the government to put this vision into practice.

Vinpro said that the Cape Town port was of strategic importance to the wine industry and one of the busiest international shipping routes. South African wine exports represented almost half of its total production and amounted to 330.2 million litres in the year ended February 28, 2021, representing a 6 percent growth in volume year on year.

Of these exports, 41% are packaged wine and 59% bulk wine. The United Kingdom, Germany, the Netherlands, the USA and Sweden were the top 5 markets for South African wine, with a total export value of approximately R9 billion, the second-highest of any local agricultural product.

Basson said that the wine industry was still experiencing various operational challenges at the Cape Town port, not only with exports, but also with the import and unloading of packaging materials such as wine bottles for the current season.

“We cannot afford any delay as it would have a ripple effect on the distribution of the 2021 harvest, as well as the export of wine, which especially has to be prioritised now during the Northern Hemisphere’s summer months.”

The industry representative said that the lack of equipment and manpower, delays due to bad weather, congestion as a result of inefficiencies and the fact that container vessels were passing the port as it was not functioning optimally were some of the strategic challenges that the South African wine industry was currently experiencing with regards to exports.

Vinpro actively collaborates with other agricultural industries and representative bodies such as AgriSA and Agbiz, and continuously engaged with the Ministers of Agriculture, Transport and Public Enterprises, the Western Cape government as well as the management of Transnet regarding the problems with the import and export of wine and other agricultural products.

“For the wine industry to recover and grow, it is important in the short term that operational activities at the port should remain as optimal and efficient as possible. Structures should therefore be implemented and maintained to ensure that these activities run smoothly. In the long term, we would like to see effective investment in new equipment, as well as the renewal and expansion of our port. An effective and fully operational port is essential to grow the economy of the country and create new jobs,” said Basson.

The Agricultural Business Chamber(Agbiz) said earlier this week that the fixing of the local infrastructure to allow the sector to perform optimally would be incomplete without dealing with logistics.

The chamber said that South Africa's agricultural sector is export-orientated, therefore, efficient and cost-effective shipping ports and trail lines were critical to the expansion of the industry.

“The current government and industry strategy is to expand agricultural output and reach broader export markets, but such will only succeed if the logistics are efficient.

Industry leaders, including Agbiz and rail industry leadership, are in constant discussions to address the logistical challenges. To our mind, there is a need for increased investment in this area to support agriculture and other sectors of the economy that are geared towards exports,” said Agbiz chief economist Wandile Sihlobo.

Last month, Transnet Freight Rail (TFR) announced that it had doubled up rail capacity for export grain farmers in the Bethlehem area in the Free State province, as the export grain season got under way.

Through integrated demand planning with farmers, TFR planned to move 550 000 tons of export grain, a 133 percent increase from 235 826 tons in the previous season. The 550 000 tons was equivalent to approximately 16 100 trucks off the road, which would have had a material impact in easing road congestion in the Port of Durban precinct.

TFR said it was committed to further increasing rail capacity for the 2022 grain export season through aligning with the industry and reviewing operating models to improve capacity.

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