TRANSNET PORT TERMINALS How to develop a successful strategy to enable more efficient port operations - Willie Coetsee, Senior Strategist, Transnet Port Terminals 25 June 2013
TRANSNET PORT TERMINALS
How to develop a successful strategy to enable more efficient port operations - Willie Coetsee, Senior Strategist, Transnet Port Terminals
25 June 2013
TABLE OF CONTENTS
• BRICS
• Transnet State Owned Company Limited
• Africa Strategy
• New Strategic Direction
Source of picture: www.newstimeafrica.com
• Market Demand Strategy
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Supporting
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Capital Projects Transnet
Foundation Property
Transnet Pipelines
(TPL)
Transnet Engineering
(TE)
Transnet Freight Rail
(TFR)
Transnet Port
Terminals (TPT)
Transnet National
Ports Authority
(TNPA)
Pipelines Rail Ports
• 16 Cargo Terminals operating across 7 SA ports
• Revenue 7 bn
• Assets R13.5 bn
• 6 324 employees
• 8 Commercial ports along 2943km of coastline
• Revenue R8.4bn
• Assets R56 bn
• 3558 employees
• 20 500 km of railway track
• 182 million tons of freight
• General freight & 2 heavy haul export lines
• Revenue 22.2 bn
• Assets R54.7 bn
• 24 177 employees
• Support TFR for rolling stock and TPT for lifting equipment maintenance
• Revenue 9.8 bn
• Assets R8.6 bn
• 13 020 employees
• 18 billion litres of petroleum products and gas through 3 000 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
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Shortest Trade Route between Shanghai and Santos is via South Africa 10,972nm = 21 days @ 21 knots via Panama Canal12,967nm = 26 days + transit fee via Suez Canal 13,544nm = 28 days + transit fee Source: http://www.searates.com/reference/portdistance/
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Lome (Togo)
Port Louis (Mauritius)
Toamasina (Madagascar)
Lagos (Nigeria)
Cotonou (Benin)
Walvis Bay (Namibia)
Tema (Ghana)
Cape Town (SA)
Dar es Salaam (Tanzania)
Tanga (Tanzania)
Mombasa (Kenya)
Nacala (Mozambique)
Beira (Mozambique)
Maputo (Mozambique)
Richards Bay (SA)
Durban (SA)
East London (SA) Ngqura (SA)
Pointe Noire (Congo)
Douala (Cameroon)
Source: Team analysis
Port Elizabeth (SA)
Lobito (Angola)
Luanda (Angola)
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Matadi (DRC)
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Transnet Strategy - Journey to Date
Pre 4-point Turnaround Plan
▪ Financial instability ▪ Volatile earnings
and cash flows ▪ Declining
operational performance
▪ Possibility of Concessioning
Pre 2005 ▪ Laying foundations for operational performance through investment and efficiency improvements
▪ Robust governance and supporting environment
• Disposal of non core assets
• Reignite investment
4-point Turnaround Plan
2005 - 2007 ▪ Strong financial results
▪ Focused investment to eliminate backlog; investment lagging volumes
▪ Operational stability ▪ Effective cost
control and reduction of cost base
▪ Integrated commercial management
▪ Strategic asset/ liability management
▪ Sound funding strategy
Quantum Leap Strategy
2008-2011
Market Demand Strategy (MDS)
2012-2019
▪ Continued financial performance
▪ Investment focus on expanding capacity to meet market demand
▪ Capture operational efficiencies
▪ Expand funding sources
▪ Accelerate South Africa’s economic transformation by support of the NGP
Financial stability Operational stability
Growth Source: Transnet Corporate Plan
•Unconstrained Customer demand
•Improved Vessel turnaround time
•Process improvement
•Potential identification •Understanding the
customers’ business •Customer Interaction
•Personal Visits •3rd Party
Interviews •Focus Groups •B2B Inter-action •CLOF, SAASOA,
SAAFF
•Collaborate with the Customer
•Market Demand Strategy •Focus on new
capacity •New Methodology - ECICS
•Communicate with the Customer
•Infrastructure Investment
•People development •Business Process
Improvement
Idea
Diagnostic
Strategy Formulation
Roll out
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9 Source: Africa Team analysis
Market Demand Strategy - 2012 to 2019
• R300bn Transnet-wide capital investment
programme over next 7-years
• Expanding rail, port and pipeline infrastructure
• Increase in capacity to meet market demand
• Continued financial stability and strength
• Significant productivity and operational efficiency
improvements
• Shift from road to rail – reducing the cost of
doing business and carbon emissions
• Enabling economic growth
• Job creation, skills development, localisation,
empowerment and transformation opportunities
• TPT will invest R33bn
Divisional split (Rbn)
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33
47
4
201 4
Other
TPL
TPT
TNPA
TRE
TFR
Other
29% Maintain
71%
Expand
Change in emphasis
10 Source: Africa Team analysis
New Strategic Direction - Supply Chain Integration & Global Expansion
Integration
into the
Supply
Chain
Global
Operations
Terminal
Operations
Efficient
Operations
Innovative
Value Adding
Services
Expanding the
Horizon
11 Source: Africa Team analysis
Defend & Grow - Strategic Interventions in 4 Areas
Terminal
Operations
Customer Service
Grow and
defend local turf
Expand into
logistics services
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TPT could expand its active role by forward and backwards integration into the transportation value chain
Potential businesses areas to support a fully integrated supply chain solution are:
1) Inland depots/external distribution warehouses (Value Adding Services)
2) Container lifecycle management (Pre Trip Inspection, Repairs, Modifications)
3) Cargo support (Logistics, SEZ’s)
4) Equipment Maintenance (In-sourcing, Outsourcing to other clients/countries)
5) Private Sector Participation
6) Short Sea Shipping
Integration into the Supply Chain - Forwards & Backwards Integration
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Africa Strategy - The AU has Identified 14 Corridors as the Main African Corridors that Needs Development
1 Kenitra-Casablanca Corridor
2 Greater Cairo Region
3 The Dakar-Touba corridor (Touba-Mbackѐ)
4 The Greater Ibadan-Lagos-Accra (GILA) urban corridor
5 The great Haoussa-Yoruba-Anshanti city triangle (GHAYA-CT)
6 The Emerging Luanda-N’Djamena corridor
7 The Kampala-Entebbe corridor
8 Nairobi metropolitan region
9 Walvis Bay corridor
10 North South corridor (Cape Town-Johannesburg-Harare-Lusaka-Dar es Salaam)
11 The Maputo-Gauteng development corridor
12 Durban development corridor
13 Beira corridor
14 Maputo-Limpopo corridor
Source:E&Y Report – Time for Africa
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11 14
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