23075 export 09/2013 - export & import south africa oct 2013.pdfhave i had the opportunity of...

23075 Export 09/2013

About a buoy

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Editor’s Comment

BEE compliant

I’m ashamed to admit; as writer for this largely ocean-inspired publication, that I’ve spent very little time ‘out’ to sea.

I have dabbled in the anomalous water voyage (ferry trips across the North Sea . . . and sluggish putts across the Vaal and Hartebeesport Dams), and have even drifted (unintentionally) to the shark nets on KZN’s north coast (a couple times), but never have I had the opportunity of getting my hands dirty, calloused aboard a true working ship – joining the hardworking teams aboard Maersk’s mega ships – incredible stuff. All I need do now is learn to tie a few of those archetypal maritime knots, actually be invited to bob around the world for a while . . . and get over my fear of falling into murky sub-zero waters with all manner of ocean dwelling beast nibbling my toes.

Humour notwithstanding, trade by sea is amazingly complex and exceedingly important – with around 96% of our trade done this way. Activity on South Africa’s shipping routes with its major trading partners in Europe increased 5% to 7% in the first half of 2013. Much of this was of our precious perishables – the reefer trade.

Seaborne reefer trade reached around 92,4 million tons in 2012, with the highest growth seen in the exotic fruit category. Despite its relatively small volume of 4,5 million tons in 2012, trade has grown by 9,1% a year on average since 2002. And South Africa’s share of this? Refrigerated cargo export volumes, says Maersk Line, had a solid growth despite, even in the face of freight rate increases. The growth was further supported by a shortage of fruit in some countries, especially apples and pears, which accounted for much of the growth. Interestingly, the Line also reported that infrastructure constraints had not affected growth on either side of the equation.

The first half of 2013 appeared to herald the start of a long awaited upturn for the specialised reefer industry. Drewry’s Reefer Market Review takes a look at the developments over the last year and how they “sit within the broader ten year picture” of the reefer market. The annual review and forecast reports that worldwide perishable reefer trade increased by a staggering 52,1 million tons between 2002 and 2012, which represents a combined annual growth rate (CAGR) of 3,6%. Seaborne perishable reefer cargo has increased by a CAGR of 3,3% (25,6 million tons) from 66,8 million tons in 2002 to 92,4 million tons in 2012.

The highest percentage growth continues to be seen in the exotic fruit category (pineapples, kiwifruit and avocadoes to which southern Africa contributes a respectable portion). Despite its relatively small volume of 4,5 million tons in 2012, this sector has grown by a CAGR of 9,1% since 2002. In terms of tonnage, the highest growth has been in the meat category (comprising poultry, pork, beef/veal, offal and sheep meat). This grew from 22,8 million tons in 2002 to 36,3 million tons in 2012 – a CAGR of 4,8%. Seaborne trade in the meat category has grown by 8,3 million tons – a CAGR of 4,6%.

Also in line with our country’s Transport Month (October) take a look at page 8 of this issue and the commentary of Stephen Temple, MD of Freight Forwarding in South Africa for Barloworld Logistics, and DHL’s input on page 4. Until next time, safe journeys.

Jodi Newton, export & import SA Editor

1 ExPort & imPort SA // OCTOBER 2013

23282 Export 10/2013


On the Cover

Page 10

“People move freight” – Core Freight’s Jonathan Sims

reflects on SAAFF Congress 2013

Regulars1 Editor’s note – About a buoy

20 export & import International – Breaking news from around the globe

22 Country Profiles – Mongolia and Tunisia

29 Local Trade News – Hazcom standards, Western Cape exporter awards, the poultry tariff increase, and much more.

36 Your complete events calendar – 2013’s exhibitions and conferences

4 Advertorial DHL’s Norman George looks at the

complexities of business

6 Law The FSB Letter: Change or face the

consequences!

8 Supply Chain Barloworld Logistics MD speaks of

the impact of globalisation

12 Congress International trade forum identifies

issues facing exporters to SA

14 Economy Kenya remains a land of opportunity

17 Advertorial Isuzu is prouder than ever

18 Freight on Rail John Batwell’s overview of freight

rail developments across Africa

19 Freight on Road Improving efficiency and reducing

costs

26 Education Series The third part to Jim Merrington’s

global trade training series

28 Logistics Another momentous first from the

KWE team

contents

17

6

22

20

12

34

Officially endorsed by Wesgro and the Exporters Clubs of South

Africa – Eastern Cape and Western Cape

Export & Import

Southern Africa is now

available online. Be sure

to visit Export & Import

Southern Africa at

www.exportsa.co.za

October 2013 // Volume 11 Number 10

While there are numerous exciting business opportunities – as international markets continue to express interest in local products/services and vice versa – international trade remains a complex process, which if not managed correctly, can create unfavourable situations for businesses.


With the growth of the e-commerce industry and the increasing ease of conducting business electronically, it isn’t

surprising that more businesses are choosing to trade across borders to take advantage of the revenue-generating potential that export and import activity offers.

This is according to Norman George, Operations Director at DHL Express South Africa, who says that it is important for businesses to be aware of the diverse trade regulations, and implications of these, when moving shipments across the various borders.

George points to the latest World Bank Doing Business 2013 report which revealed that South Africa is currently ranked 115 out of 185 economies with regards to the ease of trading across borders. While this is an increase from last year’s ranking of 145, it still highlights the challenge local businesses face in terms of document requirements and customs procedures.

As a result, businesses need to have an understanding of customs requirements applicable to their product’s origin and destination, in order to minimise any delay and extra costs at border clearance which could adversely affect a business’ profits.

George offers a few pointers to local businesses to assist with a smooth shipment process. “First and foremost, Customs require the importer or exporter to register as an importer/exporter before transacting internationally. Following this, businesses need to ensure they have the correct paperwork.

“Typical documents that are required included certificates stating the proof of

the products’ origin as some goods could attract preferred rates of duty depending on their country of origin. There are also goods that require inspection and release by other government agencies, such as the Health Department, so it is imperative to enquire whether the goods being shipped from specific countries require additional permits.”

Invoices also need to be provided and these need to be in a specific format and include the suitable content, which includes the purpose for the product (commercial or non-commercial) and the proof of their values. “Customs reserves the right to stop, detain and physically inspect any shipment entering or exiting the country. During this phase, they subject the clearance of the product to various checks, such as valuation, to determine whether the value paid to the supplier is in fact the value declared for Customs purposes. There are legal implications if these details do not correspond,” says George.

Commodities are coded by means of a tariff number and as a result, a Harmonised Tariff code will be assigned to the product, which is a code that determines the rate of duty payable on that specific commodity.

Another aspect to consider is whether there are any special requirements for the specific country the product is being shipped to, such as temporary imports/exports and restrictions, says George. “There are prohibited and restricted goods that can only be shipped in and out of the country under a permit or licence, such as plant or plant products which require a phytosanitary certificate or medicine/scheduled substances which require a medical control council certificate.”

George says that to further guarantee a smooth shipment process, for both the business and customer, it is vital for companies to ensure traceability and transparency in the transportation process.

“Not only will this help keep the customer informed, but it will also assist the company to prevent delays should there be a stoppage in the process. With the knowledge of a particular stoppage, a business can then help resolve the issue quickly and efficiently, as in some instances, the delay is likely solved with the provision of extra data or forms.”

The speed needed for the shipment also needs to be considered when assessing the company’s transportation needs. “Businesses must match the transport need to the needs of the customer, which can be categorised into the size, urgency, costs, speed and complexity of shipment,” says George.

Due to the complexities of the procedures and processes, it is advisable to seek assistance from service providers that can support and advise according to a business’ individual needs. “This enables good local knowledge and the assistance with the clearance process and procedures. They will also ensure that all requirements are met and understood before shipping, as well as manage expectations and navigate through some time very difficult procedures.

“By fully understanding the processes and terminology involved with entering the different markets, local businesses can build a long-term foundation for successful international trade,” concludes George. u

Guest’s Editorial

Opportunity for SA business but complexities must be understood

Norman George, Operations Director at DHL Express South Africa

23367 Export 10/2013

Warehouse, transport and logistics companies that have been offering tick-the-box insurance to their customers need to change

the way they do business immediately. The FSB has issued a letter confirming that, generally, this common practice is a breach of the provisions of the Short- term Insurance Act which attracts penalties of up to R1 million

Typically customers of a warehouse, transport or logistics operator are asked if they want insurance for their goods. If they tick the “yes” box then their risk is insured by the warehouse, transport or logistics operator on its own goods-in- transit policy.

The FSB has made it clear that this is only legal if the operator concerned is either a registered insurer or a licensed intermediary. Very few operators can afford to employ a licensed intermediary as this is a function normally carried out by dedicated insurance brokers.

Customers do not want to separately instruct their insurance broker to insure goods and operators obviously want to offer a one-stop service. It has been suggested that one way of dealing with this problem is for operators to contract with their customers on an all risks basis and to then insure that risk under a liability policy.

This is a risky strategy as the operator would have to have fool proof systems in place to make sure that it only contracts with the customers that request insurance on this basis and that its usual exclusion of liability terms apply to all other customers.

The operator will also have to make sure that it complies with all of the conditions of the policy and timeously effects payments of any premium. This is to avoid having to pay its customer following damage to the goods before finding that for some reason it cannot recover the loss from the insurer under the policy.

Norton Rose Fulbright are of the view that a viable solution to this problem is for the operator to insure the goods under a goods-in-transit policy as a bailee.

This insurance is taken out in the name of the operator under the usual goods-in-transit terms which are typically subject to the terms of the Institute Cargo Clauses A, also known as the all risks clauses.

The operator is the insured under the policy and accordingly pays the premium to the underwriter. The

operator is not allowed to collect that premium directly from its customer. The premium does, however, form part of the operator’s cost of doing business and can accordingly be taken into account when calculating the amount charged to the customer.

The benefit of this arrangement is that the goods are properly insured under a goods-in-transit policy rather than under a liability policy.

This means that the operator does not have to prove that it is liable to the customer for the damage to the goods before it can claim under the policy.

It offers the customer the comfort of knowing that the goods are properly insured without having to rely on its own insurance broker to arrange that insurance.

The operator can sleep easily knowing that it can still contract with all its customers on an exclusion of liability basis but at the same time offer its customers a one-stop service to store and/or transport the goods at the same time as insuring all risks associated with damage to the goods.

The marine insurance market in South Africa is still developing products to respond to the FSB’s letter and Norton Rose Fulbright recommends that all warehouse, transport and logistics operators instruct their brokers to arrange bailee insurance for their customers and goods.

This marks a considerable shift from existing practice but does avoid exposure to the considerable penalties under the Short-term Insurance Act. u


Law

A letter issued latterly by the Financial Services Board (FSB) is a game changer. Warehouse, transport and logistics companies need to modify their insurance offerings with haste . . . or face potentially hefty penalties.

Attention, industry: change or face the consequences Written exclusively for export & import SA magazine by Malcolm Hartwell, Director with Norton Rose Fulbright South Africa (nortonrosefulbright.com)

Malcolm Hartwell, Director with Norton Rose Fulbright South Africa

23229 Export 10/2013


An increasing number of South African companies are engaging in global activities that involve importing and exporting finished products,

components and materials across multiple borders and through different trade routes by land, sea and air. At the same time they are faced with growing competition from overseas companies entering the local market. Both sides are being driven by the same challenges of shrinking margins, slowing domestic demand and increasing competition, and by the lure of greener pastures.

In today’s world, companies not only need to be agile, flexible and responsive but they also need to drive continual innovation throughout their businesses and supply chains to differentiate themselves to remain competitive.

Globalisation and widespread internet connectivity are giving rise to extended and interconnected supply chains that crisscross the globe. As companies venture into new markets and deal with suppliers and customers across borders their supply chains become more complex and are a higher risk to business continuity. Added to this, ever-changing consumer demands, increasing regulatory and sustainability requirements, and steadily decreasing natural resources are directly impacting businesses and their supply chains worldwide.

As international supply chain expert Douglas Kent pointed out during a presentation recently hosted by SAPICS at Barloworld Logistics, the further businesses move away from their own markets the more they face lesser known or unknown risks. These include natural disasters, political unrest, continuing reliance on oil, fragmentation along the supply chain, sudden demand shocks, export and import restrictions, terrorism, and

different compliancy requirements for different countries.

Ways to mitigate risks include finding alternative sources of supply and trade routes, and partnering and collaborating with supply chain specialists and trading partners. The GE Global Innovation Barometer 2013 study shows that companies are realising that partnerships are the fastest way to achieve scale by providing critical insights into new markets and customers and access to better technologies.

Partnering and collaborating with suppliers and other supply chain entities includes sharing data and information, which can give rise to trust issues. But visibility across all their extended and interconnected supply chains is an imperative for companies conducting business globally.

As companies expand beyond their national borders they are under increasing pressure to deliver a high level of customer service at an acceptable cost while achieving a strong profit performance on a global scale. This includes the ability to help their customers to improve their supply chain processes and reduce costs.

The challenges and opportunities of globalisation and the growing complexity of supply chains are pushing them higher up the boardroom agenda for discussion and scrutiny. Developing nations are playing an increasingly significant role in the global economy, with 41% of the world’s GDP expected to come from emerging markets by 2015.

In a recent report, Manufacturing the future: The next era of global growth and innovation, McKinsey & Company predicts that by 2025 a new global consuming class will have emerged and the majority of consumption will take place in developing economies.

To access new markets, companies in some emerging economies are piggy-backing onto existing global supply chains rather than building their own. This gives them the ability to export their products and services globally within months. Globalisation increases the need for countries to optimise their road, rail, airport and sea port infrastructure and provide slick cross- border clearance.

In South Africa there is a need to build an interlinked rail and port infrastructure, supported by road. More inland port terminals are also needed, and systems must be put in place to enable cargo to be moved quickly and efficiently between road and rail. According to the National Planning Commission (NPC), 96% of South Africa’s exports are conveyed by sea, which underlines the importance of the country’s ports.

Forward thinking local companies are taking measures to lessen the impact of the current inadequate transportation infrastructure on their businesses. These include partnering with supply chain service providers to assist them in strategic route planning, optimising transport modes, using more fuel efficient vehicles, having the right technology systems in place and generally improving logistics processes. u

Visit www.barloworld-logistics.com

Supply Chain

The impact of globalisation on the supply chainWritten for export & import SA magazine by Stephen Temple, MD Freight Forwarding SA, Barloworld Logistics

The further businesses move away from their own markets the more they face lesser known or unknown risks. But how do we manage these risks?

Stephen Temple, MD Freight Forwarding SA, Barloworld Logistics

With 96% of South Africa’s exports

conveyed by sea, the importance of the

country’s ports and state thereof cannot be

highlighted enough

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On the Cover

Reflections on SAAFF congress 2013 – “People move freight” by Jonathan Sims, Core Freight Systems (Pty) Limited

I was fortunate to attend the annual South African Association of Freight Forwarders (SAAFF) congress held in Sandton, Johannesburg, during early October 2013. A wide variety of

topics were addressed in the series of presentations made over two days. The presenters were articulate and demonstrated their expertise in the subject matter. Briefly, without intending to derogate from the presenters or their subjects, the content I noted included the following:

Progress made in the Customs ·modernisation programme, with the benefits realised to date and the potential inherent in the new platform that has been established at SARS. The realities of the transportation ·infrastructure and the implications for industry – whether within the boundaries of Gauteng, between the inland destinations and the coast or the accommodation of shipping at our international ports.Economic and political influences at ·both the international and national levels, including monetary risk management through insurance, securing the physical supply chain, VAT considerations and even BBBEE.Strategic approaches to assist in ·managing business, either through a “systems thinking” or “scenario planning” approach.

Although perhaps not explicitly linked, each of the subjects directly or indirectly addressed one of the three considerations we have traditionally associated with modern logistics supply chain thinking. viz firstly, facilitating the physical movement of the goods, secondly controlling the financial consequences thereof and, finally, managing the information requirement associated with the preceding two bullet points.

Many complex issues, some successes, and some proposed solutions associated with each of these elements

were highlighted through the individual presenters and, to my mind at least, provide reason for continued enthusiasm for the forwarding and clearing industry – that the challenges have not yet all been resolved and the opportunity for continued employment in the sector is looking robust, for the right people!

This was in fact the overriding impression left in my mind during the conference, ie that ultimately “People move freight”.

Notwithstanding the importance of ships and trucks, warehouse facilities, transportation infrastructure, letters of credit, cash flow optimisation techniques, legislation and regulation, private and public sector participation, IT systems and data processing – people are the primary component determining the real effectiveness of the supply chain. This was not necessarily the most welcome conclusion to someone whose business, as an IT service provider to the industry, is dependent upon persuading clients that data processing is the primary or essential element to successfully fulfilling their function in the South African logistics supply chain!

Of course the scale of the issues facing our industry require that organisational resources rather than individual people are deployed to make the supply chain flow. However, our experience is that collective performance is a function of

individuals within the organisation, whether defined at a company level or a wider initiative, and whether they choose to assert their individual competence or simply adopt the least disruptive position within their organisation.

The foregoing does beg the question: what attributes define the “right” person for the industry? Clearly there is a requirement for technical skills; however, our observation is that a more fundamental attribute is the ability to cooperate, both teaching and learning from others with a mind-set of expanding the potential rather than securing a position in a limited market – the ability to contextualise their role beyond their immediate comfort zone or personal benefit.

As perhaps many of those who made formal presentations at the event, I am not a member of SAAFF. Nonetheless the congress impressed on me that there are many individuals across a wide range of disciplines who positively contribute to the collective vision, decisions, action and evaluation that is necessary to develop the potential inherent in the South African leg of the supply chain, whether to simply improve internal efficiencies, contribute to development of the African continent or indeed expand our participation in the global economy. I feel optimistic having shared in the event with some of the people who move freight. u

Jonathan Sims, Core Freight Systems (Pty) Limited

“Collective vision,

decisions, action and

evaluation is

necessary to develop

the potential inherent

in the South African

leg of the supply

chain”

23404 Export 10/2013

Near to 400 delegates attended IATTO’s 39th annual forum in Thessaloniki, Greece, at the end of September. Attendees

constituted an eclectic mix of business people, government officials (including the South African Ambassador to Greece and the Honorary South African Consul in Greece), trade training organisation executives and trade trainers from different parts of the world.

Presentations covered inter alia Greece’s efforts to bring about economic recovery – including their new national export strategy; the EU’s perspective on trade training; current country economic profiles; the experiences of companies which have done business in specific countries (such as the US, Russia, China, Turkey and South Africa); innovative trade training initiatives conducted by different countries/trade training organisations to increase trade skills, new tools for initiating and conducting trade and the launch of IATTO’s new ‘World Trade Professional’ designation intended to elevate the status of global import and export practitioners.

The WTP (the letters that eligible persons will in future be able to place after their names) is based on international trade expertise and experience, a commitment to the conduct of fair, ethical and environmentally friendly international sales transactions and involvement in a continuing professional development (CPD) programme.

The Thessaloniki forum also served as the venue for IATTO’s AGM at which

inter alia the IATTO Board changed its shape. Italy, Australia and Taiwan joined the US, Sweden and South Africa as directors, while New Zealand and Greece left the fold. It was confirmed that the Italian Trade Agency in Rome will host the 2014 forum and expressions of interest in hosting the 2015 and 2016 forums were received from Malaysia, Australia and Taiwan.

Thessaloniki itself was an interesting choice of venue for the forum. Not only is the city the main business and export hub of northern Greece with a busy port, but it is also home to magnificent old buildings and historical sites, many dating back to as early as 300 BC. The region’s export sectors are largely electronics, ceramics, agricultural equipment, and fresh and processed food and beverage products, in particular olive oil, wine, feta cheese, ouzo and yoghurt.

Two European companies currently exploring business opportunities in South Africa were a wine producer and the manufacturer of an innovative farm irrigation system. Both had already experienced interest from potential local importers and were looking to use South Africa as a base from which to penetrate other African markets. Their views on how to access the South African market and conduct business with its people were enlightening, even to the seasoned South African delegates!

Of some concern in the presentations on South Africa, was repeated reference to the prevalence of internet scams. It appeared that a number of companies had entered into business deals with

seemingly authentic South African companies sourced via the internet, only to discover after despatching container loads of product to Durban and not receiving payment that their buyers did not exist. Clearly these companies had not enjoyed the same access to export/import training as their more fortunate South African counterparts as risk management and the means by which to secure payment feature strongly in locally conducted export marketing and administration courses.

Negative trading experiences such as these highlight the risks faced by companies that do not ensure their personnel have the necessary knowledge and skills before rushing headlong into international trade deals. Various trade training organisation representatives at the IATTO Forum were quick to point this out!

*Rose Blatch is the Executive Director of the International Trade Institute of Southern Africa (ITRISA) and the Director: International Accreditation, Certification and Professional Designation System of IATTO. IATTO is the global association of trade training organisers, trainers and practitioners that sets the standards for import/export training and education. ITRISA is the current host of the IATTO Secretariat. u


Congress

Well attended: hundreds of trade training professionals and international trade officials at the annual forum of

IATTO, held recently in Thessaloniki, Greece

“. . . of concern was repeated reference to the prevalence of internet scams . . .”

International trade forum identifies issues facing exporters to SA Written exclusively for export & import SA magazine by *Rose Blatch, ITRISA’s Executive Director in South Africa

Nearly four decades since inception, the yearly forum of IATTO yields positive input

and results from across the globe

22824 Export 07/2013

Kenya has stayed the course in its economic reforms, with good results. Inflationary pressures have been tamed. Economic growth has

maintained a good pace despite the slowdown of exports to and tourism from Europe, according to a recent IMF survey. International reserves are on the rise and the deficit of the external current account has shrunk significantly – excluding capital-goods imports that have surged because of oil exploration. The public debt-to-gross domestic product ratio has declined, despite the large budgetary costs of implementing the new constitution, the March elections, and the wage increases in the civil service.

Elections took place successfully in March 2013 after a few postponements. Forty-one states were formed with a governor appointed to control each state or county. Infrastructure and development is on an upswing as Kenya is the hub of East Africa. New shopping malls are currently being developed, together with the improvement and refurbishment of roads around Nairobi. Nairobi airport is a major regional hub and despite the recent fire, major expansion of the airport is taking place. The rest of the world considers Africa to be a market for growth with larger international companies more prevalent. This situation has given rise to a higher level of competitiveness in the market.

British American Tobacco Kenya, the largest producer of tobacco in East Africa, is one of the largest listed entities in the country. The company hires approximately 5 000 local farmers on a contract basis which stimulates the local economy. Their product is also exported to countries

throughout Europe. Kenya has a significant agricultural strategy in place (Africa holds 25% of the world’s arable land yet only 40% of this land is utilised efficiently).

The steel industry is difficult to manage: orders from the large mills have been slower and reduced due to stock being dispatched more regularly. Overall milling, mining and production costs have increased but the steel price has remained buoyant with a downward trend experienced.

Oil exploration is under way in the north of Kenya; crime and corruption is rampant (Nairobi is known worldwide for “crime and grime” as per an article published in the National News on 22 June 2013). The roadworthy condition of the Kombis that are used for the local taxi/transport industry is cause for concern.

The country’s largest export earner is the horticultural industry and Kenya is one of the largest exporters of flowers in the world. A large amount of foreign currency is also derived from remittances from Kenyan citizens who are employed abroad.

The major development that is currently in progress has resulted in severe road congestion by heavy duty vehicles; this is exacerbated by the country not having a railway line. Government has embarked on the construction of a railway line and introduced a 1,5% levy on goods imported into the country to finance the project.

Chinese fully manufactured products provide active competition for local manufacturers. The local businessmen are lobbying with government to control imports by introducing levies and taxes on fully manufactured

goods that can be produced within the country.

Unequal pay poses a threat to economic growth as Kenya has the widest disparity between the highest and lowest paid workers in Africa. This contributed to recent salary strikes in the education and healthcare sectors.

Despite the negatives, Kenya is a country of incredible beauty, dynamism and hope. Almost weekly an African investors conference or growth summit is held in Nairobi. International companies are flocking to Kenya to establish and evaluate growth. It appears that sustainable development is within reach in Kenya. International investors perceive Kenya as a good hunting ground, an audit by Brand Kenya revealed. The review, dubbed the National Brand Audit, states that the country is perceived as a competitive investment destination. The Economic Intelligence Unit ranks Kenya as the fifth most globally competitive investment area in Africa. Wolfgang Fengler, the World Bank’s lead economist for Kenya, Rwanda and Eritrea, remarked that Kenya is experiencing structural shifts that it can leverage to its advantage and a silent revolution is in progress which is transforming Kenya for the better. u

Economic Review

Kenya: remains a land of opportunityby Abdul Cassim, Senior Manager Export Risk, Credit Guarantee Insurance Corporation

Abdul Cassim, Senior Manager Export Risk, Credit Guarantee Insurance Corporation


23347 Export 10/2013

23403 Export 10/2013


Isuzu Truck South Africa is now majority-owned by Isuzu Motors Limited. It’s a confidence-boosting move which COO Craig Uren described as the ‘logical next step’ for the

brand as it increasingly plays a leading role in the South African truck market.

In 2007 a landmark joint venture between Isuzu Motors Limited and General Motors South Africa (GMSA) was formed: a consolidated company, Isuzu Trucks South Africa (Pty) Limited.

Isuzu Truck South Africa can now reveal that Isuzu Motors Limited will be taking a 70% stake in the company, with GMSA remaining as a 30% shareholder. The official announcement was made following a high-profile board meeting at Isuzu Motors in Japan sealing the deal at the end of September 2013, with the purchase of 200 Isuzu Truck South Africa shares from GMSA planned for during balance of 2013.

According to Isuzu Truck South Africa’s Chief Operating Officer Craig Uren, the company’s staff and management are excited by this development, which has already resulted in new goals and possibilities. The resulting increase in capital was included in Isuzu Truck South Africa’s Mid-term Business Plan.

“With the announcement of the local shareholding change comes the requirement from Isuzu for Isuzu Truck South Africa to take more responsibility for the sub-Saharan Africa territory, and we’ve got some specific objectives to achieve,” elaborates Uren. “We’re going to aim to enhance the Isuzu sales volume, provide better customer satisfaction, enhance life cycle business and stabilise the business in South Africa by strengthening the connection between Japan and South Africa.”

The motivation behind retaining GMSA’s 30% shareholding was to build on the strong relationship between Isuzu and GM. “We’ve asked GMSA to continuously involve in Isuzu Truck South Africa as an amicable partner, as

we will continue to use GMSA’s infrastructure and resources for parts ordering and receiving, transportation of completed vehicles and vehicle assembly outsourcing,” explains Uren.

It is important to note that Isuzu is not moving in the direction of cutting ties with GM in South Africa.

Rather, says Uren, Isuzu Trucks’ South African business plan since 2007 has followed a similar path to that of Isuzu Trucks Australia’s development over the past 30 years. In Australia, Isuzu Trucks had similarly progressed from being a GM-Holden-owned business to a joint-venture between Isuzu and GM Holden, to a majority-owned Isuzu business.

“We modelled a lot of our business approach for what we want to do in South Africa based on what was done in Australia as there was a good track record there,” reflects Uren.

“Over the course of the last few months we have a bigger role to play for our assembly operation in Port Elizabeth. We’ve restructured and consolidated operations, working towards the creation of a wholly different and more efficient means of production,” adds Uren.

These manufacturing changes have not only resulted in cost-efficiencies and increased productivity, but also boosted build capacity with an intense focus on quality – all thanks to the application of the Japanese philosophy of Kaizen (approximately translated as ‘change for the better’).

Although this announcement is significant for the company, as it strengthens the relationship between Isuzu Motors’ international headquarters in Tokyo and Isuzu Truck South Africa’s base in Johannesburg, it is important to note that there will be few evident changes ‘on the ground’ in South Africa.

Branding will be unchanged; the Isuzu Truck South Africa Head Office will stay

at its current location in Johannesburg; existing contracts between Isuzu Truck South Africa and dealers will continue; and warranties will remain consistent.

Outside of South Africa the announcement’s impact will be more noticeable, with Isuzu Trucks focusing on expanding opportunities across sub- Saharan Africa. Previously this was managed on an adhoc basis by various distributors and dealers.

“There are existing truck assembly operations with GM in Nairobi for right-hand drive trucks, and we’re in the process of determining what to do for West Africa,” adds Uren. “That’s a function of product specification. We could source product from anywhere and ultimately there will always be a solution.”

The existing export of trucks into right-hand drive neighbouring countries will, however, be enhanced by the announcement, because Isuzu Truck South Africa will now have more flexibility in terms of matching trucks’ specifications to the specific market requirements in various countries.

the new modelsIsuzu Trucks has also announced a significant upgrade to its trucks, with the Isuzu N-Series NMR 250 now exclusively fitted with Isuzu Trucks’ unique Automatic Manual Transmission (AMT) in both its Freighter and Crew Cab derivatives.

While Isuzu Trucks’ N-Series range was first launched in South Africa in 2008, this marks the first time that NMR 250 trucks (with a payload of 2,5 tonnes) have been equipped with AMT. Previously AMT has been available in Isuzu trucks with payload capacities ranging from three to eight tons.

Whereas automatic gearboxes normally rely on torque converters and planetary gears, Isuzu Trucks’ AMT operates in most aspects like a manual gearbox. u

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More proudly Isuzu than ever Isuzu Truck South Africa’s Chief Operating Officer

Craig Uren


South Africa

more Australian locos for South Africa The heavy lift ship BBC CAROLINA sailed from the Port of Brisbane in late August bound for Durban with 20 locomotives in the hold. The load appeared to be a mix of Clyde GL18C/ GL26C/GL26C-2 types. This is the second batch to go which embraces some units that did not transfer

to South Africa earlier in the year. The first batch went in March, consisting of 14 x 1720 class, 3 x 2100 class, 13 x 2600 class (the entire class) and 3 x 3100 class. The relocation of the motive power from Durban to RRL Grindrod and African Rail & Traction Services in Pretoria was under way in October. Angola

Benguela line at LuauThe first train on Caminhos de ferro de Benguela (CFB) to reach Luau in nearly 30 years – due to the civil war in Angola – arrived in the rebuilt station on 6 August. Two locomotives headed 25 wagons carrying rails and other material for construction of the remaining 20 kilometres of route to the border with the Democratic Republic of Congo (DRC).

Botswana

tenders put out regards motive power and wagons

Botswana Railways has in recent months put out tenders for eight new diesel units and the modernisation of three of its existing General Electric (GE) U15C type locomotives. The latter, 1 500 hp units, entered service in 1991 out of GE Brazil. Three hundred general purpose wagons

require overhaul and a tender has gone out to this effect as well.

Zambia

New passenger saloonsZambia Railways Limited (ZRL) chief executive officer Muyenga Atanga says plans are under way to buy more than 20 new passenger coaches. Professor Atanga said the company was expecting to bring in specifically 24 state-of-the-art coaches in the next eight months.

Atanga said in Kabwe that ZRL would invest in passenger services which had been neglected in the past. He said the passenger services were important for the people and that it was for this reason that ZRL was repositioning itself to play a critical role in the country’s transport sector. He said 13 locomotives and 848 wagons would be rehabilitated. ZRL was aiming at transporting 3,6 million tons of cargo this year and further expand to six million tons by 2016. He said once the railway line is rehabilitated by August 2015, ZRL expected that 50% of bulk cargo would shift from road to rail.

mozambique

Beacon Hill resources gets set to rail coal to BeiraMining coking and thermal coal in the Moatize Basin in Mozambique, London-listed Beacon Hill Resources has been granted a 7,7% capacity allocation on the Sena rail line. The company’s rail infrastructure development is progressing well with the first Minas Moatize train loads expected to depart for the port of Beira on the Indian Ocean coast in the fourth quarter of 2013. South African motive power builder RRL Grindrod, based in west Pretoria, is putting out five of its RL30SCC model diesel units for Beacon Hill.

Further diesels to NacalaRRL Grindrod has deployed two former New Zealand diesel locomotives to Nacala to work reportedly on the rail construction project through Malawi. Brazilian mining giant Vale is building a new rail link from the Mozambique coal-fields through Malawi to link up with the route to the port of Nacala. The RRL Grindrod units shipped out from Durban harbour are shopped ex-Kiwi class DQ diesels.

Nigeria

Four new locos acquiredFour new locomotives were inaugurated in late August at Apapa port, Lagos. With on-board computer, double drivers’ panel, and fully air-conditioned cabins, the locos make up class 23. The power unit in each of the locomotives is Caterpillar’s 1800 model 3512B engine.

Rail Freight

Regional rail round-upWritten for export & import SA magazine by international rail analyst, John Batwell

Some of the units making up the latest batch of diesel locomotives, ex-

Australia, on the quay in Durban in the first week of October

Image: C Baker

Botswana Railways has put out a tender for the modernisation of three of its General Electric (Brazil) U15C units

Image: J Dulez

Zambia Railways Limited is looking to procure new passenger saloons

Image: M Torkington

One of the two newly refurbished RRL Grindrod diesel locomotives of the former DQ class in New Zealand is

pictured being readied for its journey to Nacala, Mozambique, by sea out of

Durban docks

Image: C Baker


Haulage by road is the backbone of supply chain logistics in African mining. While rail is an important component – particularly in

linking processed product to ports for export – most bulk cargo moved between mines and processing facilities is carried by road still. As a result, there are two factors mining companies must consider when contracting bulk carriers: cost-effectiveness, and reliability.

One-way traffic is one of the biggest contributors to logistics costs, so ensuring that trucks never travel empty creates an immediate saving. This is borne out by the experience of Buks van Rensburg, co-owner of Cargo Carriers’ Zambian subsidiary Buks Haulage Limited (BHL). Established in 2004, BHL has enjoyed consistent growth in the Zambian and sub-Saharan transport sector, aided by the ability to carry return loads on most contracts, through an innovative trailer configuration.

innovation to maximise cost efficiency“For example, our tankers carry copper concentrate from mine to smelter using a tipper,” says van Rensburg. “At the smelter, they load sulphuric acid, which is a smelting by-product using the tanker component of the trailer, and deliver it back to mines where it is used in leaching, during copper processing.” By ensuring that tankers are carrying cargo on almost every journey, BHL is able to offer more competitive pricing than it would otherwise.

The secret says van Rensburg is that whichever direction the trailers are going, the load is always equally configured over the axle, thus complying with safety and road regulations, and reducing the wear and tear on the road surfaces and tyres.

BHL has also been using unique tanker-tipper combination trailers for two and a half years, built specifically to van Rensburg’s design. The multi-purpose trailer concept is not new, but BHL’s “Bucksta” has a side-by-side configuration of tankers and tippers, which avoids the loading and structural problems experienced by other designs. The tippers are equipped with galvanised hydraulic covers, offering protection against theft and the elements. With tankers and tippers combined on one trailer, BHL is able to transport liquid and dry bulk cargo on return routes or simultaneously, delivering another logistics saving.

Adapting to African conditionsAfrican roads present haulers with extremely variable conditions, so the trucks pulling the trailers need to meet those challenges if a company is going to maintain any kind of reputation for reliability. This is the reason that BHL, when upgrading its fleet earlier this year, opted to buy 80 FAW trucks from China, rather than a European manufacturer.

“We can service and maintain the vehicles in our own workshops,” van Rensburg says. “The majority of the

latest European models are intensely computer-based and you need computerised diagnostics and expensive spares to maintain them. That’s just not practical in an African environment; you can end up with enormous down-time on each vehicle. So we saved time and money by opting for trucks that do not require digital diagnostic infrastructure and specially trained technicians to maintain them. We are saving 8% on fuel and are running at over 90% utilisation compared to our 65% utilisation on the ‘more sophisticated’ European fleets. This translates to lower costs on top of the savings generated by return loads. These cost savings and the higher levels of reliability make the combination hard to resist.”

Already active in Zambia, the DRC, Namibia and Angola, BHL is planning continued expansion into sub-Saharan Africa, particularly in the mining and farming sectors who also have a need for flexibility on return loads. It is a fast-opening market, with African growth in general still outpacing many developed nations. To succeed in the bulk haulage business and to be competitive to rail, trucking companies are going to have to develop innovative, entrepreneurial strategies and to focus on areas of business where they can be complementary to rail. The hauliers that thrive will be those that combine appropriate technology with innovative logistics practice. u

Visit cargocarriers.co.za

Freight on Road

Cargo Carriers’ Zambian subsidiary, BHL, will continue to expand into sub-Saharan Africa, in the mining and farming sectors especially

“Logistics play a vital role in mining profitability. A unique bulk haulage fleet is supplying reliable, cost-effective materials-handling solutions to the Zambian and DRC copper industry, using

trailers that enable return loads – even if they are bulk liquids.”

Improving efficiency and reducing costs with innovative fleet solutions


ComESA-EAC-SADC tripartite Capacity Building Programme

Côte d’Ivoire – A US$7,5 million grant to finance the COMESA-EAC-SADC Tripartite Capacity Building Programme (TCBP) has been issued by the African Development

Bank Group. The programme will provide technical assistance to the three Regional Economic Communities (RECs) and the 26 Tripartite Regional Member-Countries (RMCs) with a view of increasing intra-Tripartite trade. It will enhance the Tripartite negotiation process, develop trade facilitation instruments and industrial cluster action plans in the Tripartite free trade area (TFTA).

Chemical Committee to returnUSA – The US Coast Guard is to formally re-establish the Chemical Transportation Advisory Committee (CTAC). The CTAC will have a maximum of 25 members

representing chemical manufacturers, those engaged in the marine handling or transport of chemicals, shipyards and naval architects, and marine safety, security and environmental protection.

Significant agreement signed at iCAo assemblyMontreal, Canada – The aviation industry has welcomed a significant development on climate change issues made at a meeting of the International Civil Aviation Organisation

(ICAO), the UN specialised agency for aviation. Following two weeks of tense negotiations and many years of discussions, delegates representing 191 countries have agreed a resolution charting the way forward for tackling aviation’s climate change impact. It’s hoped that the agreement will set in motion discussions on the detailed design elements of a global MBM, including standards for the monitoring, reporting and verification of emissions and the type of scheme to be implemented.

Australia’s freight volumes upAustralia – The Australian Rail Industry Report, commissioned by the Australasian Railway Association (ARA) has found that freight conveyance by rail went up by more

than 8% to 929,6 million tons (ore constituted 53% while coal made up 33%). Contributions from 22 rail operators make up the report.

Environmentally sensitive diesel trailer temperature control system

Florida, USA – Manufacturer of transport temperature control systems Thermo King has unveiled its most environmentally sensitive diesel trailer temperature control

system to date. The Precedent S-600M transport refrigeration unit was designed to meet changing industry regulations and help food distribution customers achieve sustainability objectives and reduce high fuel costs. The S-600M features a completely new diesel direct electric (DDE) architecture that

drives optimum efficiencies and helps lower the overall cost of ownership for food distributors.

improved results despite reduced volumesDenmark – The Kuehne + Nagel Group improved results on EBIT level in the first nine months of 2013 by 6% compared to the previous year’s period (adjusted for

one-off antitrust fine) despite reduced growth rates in its strongest business unit “Seafreight”, especially in the third quarter. While the overall turnover increased by 1,5% to CHF15,705 million in the first nine months, gross profit improved by 2,8% to CHF4,685 million and earnings before taxes (EBT) by 6,0% to CHF567 million compared to the same period of the previous year. Net earnings amounted to CHF442 million (2012: CHF357 million).

Publication on container weighing USA – The Port Equipment Manufacturers Association (PEMA) has published an information paper on container weighing technologies – a resource compiled for the

ports industry following the International Maritime Organisation’s (IMO) recent decision on a mandatory worldwide system for verifying container weights. Visit www.pema.org

mølgaard appointed Damco CFoDenmark – AP Moller – Maersk Group company Damco has appointed Tommy Mølgaard (pictured at top) as Global Chief Financial Officer. Mølgaard takes up his

position at Damco’s headquarters after occupying the role of Head of Corporate Finance at APM Terminals. Tommy Mølgaard brings with him over 20 years of experience in finance at a senior level in the Logistics sector.

trailer market loses momentum in 2013UK – A new forecast report issued by United Kingdom-based consultants CLEAR has found that heavy trailer demand in Eastern Europe will fall by 4,9% in 2013 following a similar

fall in 2012. This is a worse outcome than was anticipated at the beginning of the year when a small amount of growth was anticipated. The cause is said to be a general worsening of the economic outlook for the region, with GDP growth figures having been downgraded since the beginning of 2013. See the full article on www.exportsa.co.za

Arik sponsors Africa’s future boxing champsNigeria – Nigeria and West Africa’s commercial airline Arik Air will sponsor up-and-coming Nigerian boxers, Larry Ekundayo and King Davidson. The carrier is

providing both title hopefuls with the financial assistance needed to focus on their boxing full time. The airline’s support comes at a crucial time in Larry and King’s careers, with both men 12 to 18 only months away from challenging for world titles.

export & import International

23234 Export 10/2013


Country S/T business S/T political Debt recovery

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recent political highlightsPresident Tsakhiagiin Elbegdorj ••from the Democratic Party was re-elected for a second term in July 2013. He has twice served as Prime Minister and was first elected president in 2009. Prime Minister Norov Altankhuyag ••became the leader of the Democratic Party in 2008. The Prime Minister and parliament exercise real political power, but the president heads the armed forces and has the power of veto in parliament.

recent economic highlightsMongolia is an upper-middle ••income, very small-sized economy in East Asia with a population of 3,09 million people.

Unemployment in Mongolia in 2012 was 6,8%, down from 7,7% in 2011. Mongolia’s economy is predominantly services-based. Agriculture accounts for 17% of GDP and employs 40% of the population. Manufacturing and industry accounts for 32% of GDP and employs 14% of the population. Services accounts for 43% of the GDP and employs 34% of the population.Balancing growth with green ••objectives is still proving a challenge. In June, the minister of environment and green development unveiled a development policy that identifies objectives towards 2030 and economic measures to be taken until 2020. The newly unveiled $122 million Salkhit wind farm covers an area of 12 000 ha and has an installed capacity of 50 MW.

With a potential to meet about 5% of electricity demand, it will provide some 100 000 residents with daily electricity.Mongolia’s mining industry employs ••less than 5% of the workforce, according to government data. That’s put strain on policy makers to do more to boost living standards in a nation where almost a third of the population lives in poverty. The Mongolian government approved $86,2 million of loans for cashmere, clothing and dairy companies. The initiative will help create approximately 80 factories that could employ as many as 30 000 workers, set up 15 milk farms, four large processing plants and 86 smaller facilities.Mongolia’s 2Q’13 growth was ••14,3%, almost double the figure reported in 1Q of this year. Most of

Researched and compiled by

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USA exports to Mongolia grew from $116 million in 2010 to more than $665 million in 2012

Credit Guarantee country profile


this growth stems from the foreign investment in facilities such as the Oyu Tolgoi copper mine – the largest financial undertaking in Mongolian history, which is expected to account for 30% of national GDP by the time it’s fully operational. The first shipments of copper concentrate left the mine in June.The European Bank for ••Reconstruction and Development is to focus its Mongolian investment on the non-natural resource sector and instead support SMEs which it hopes to do through forging partnerships with local banks and financial institutions. USA exports to Mongolia grew from ••$116 million in 2010 to more than $665 million in 2012, driven in large part by USA supplies and services to develop Mongolia’s expanding mining sector. USA imports from Mongolia increased from $12 million in 2010 to $42 million in 2012. Laos and Mongolia plan to work ••together to expand agricultural cooperation through cross-promotion of two important industries in both countries. Mongolia hopes to attract Laos investors for its sheep farming industry, and Laos hopes to attract Mongolian investors in rice cultivation.

Mongolia’s parliament approved ••a law which takes effect from 1 November on investment that ends the application of different rules for domestic and foreign private investors and sets stable tax periods based on the investment amount and the location within the country. Tax rates are set for between five to 22,5 years.Mongolia is intensifying its bid to ••become the 22nd member of APEC. In a detailed presentation to international media, Mongolian Foreign Minister Bold Luvsanvandan outlined the reasons why his country should become the next member of Asia Pacific Economic Cooperation (APEC). If Mongolia’s bid to join APEC is successful, it will become the first land-locked country to join the bloc of 21 Pacific-rim economies.

Latest trade developmentsMajor exports: copper, apparel, ••livestock, animal products, cashmere, wool, hides, fluorspar, other nonferrous metals, coal, crude oilMajor imports: machinery and ••equipment, fuel, cars, food products, industrial consumer goods, chemicals, building materials, cigarettes and tobacco, appliances, soap and detergentMain trading partners: China, ••Canada, Russia, USA, South Korea and JapanSA exports to Mongolia totalled ••R2,8 million in 2011, R2,4 million in 2012 and R10,7 million in January to August 2013 SA imports from Mongolia totalled ••R254 000 in 2012 and R178 000 in January to August 2013

SA EXPORTS TO MONGOLIA (TOP 5)

2011 2012

Products of the chemical or allied industries

R1 291 467 Machinery and mechanical appliances

R8 220 896

Machinery and mechanical appliances

R673 489 Products of the chemical or allied industries

R1 221 686

Optical, photographic, cinematographic, medical or surgical instruments; parts and accessories thereof

R404 296 Vehicles, aircraft, vessels and associated transport equipment

R1 113 789

Base metals and articles of base metals

R114 892 Base metals and articles of base metals

R148 765

Raw hides and skins, travel articles, articles of animal gut

R619 111 549Raw hides and skins, travel articles, articles of animal gut

R589 841 123

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recent political highlightsOpposition figure Mohamed Al-••Brahmi was assassinated on 25 July and since then Tunisians have been living in a state of political crisis. There are incessant demands from the opposition to dissolve the National Constituent Assembly and remove the government of Ali El-

Areed in favour of forming a government of national salvation headed by an independent figure. There are counter-demands that the ruling coalition led by the Islamist Ennahda movement be allowed to function, always expressed in light of the fact that they won the October 2011 elections. It was the second assassination of an opposition figure in just six months. Many

Tunisians blame Islamists for these murders.Tunisia’s Islamist-led government ••has agreed to resign. It is hoped a caretaker government will be negotiated before the end of October so preparations for new elections can begin.

recent economic highlightsTunisia’s economy is the 107th ••freest in the 2013 Heritage Index.

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services – Credit Guarantee

InsuranceCountry rating key – political risks: 1 = low, 2 = medium, 3 = highCommercial risks: A = low, B = medium, C = high

The number of foreign firms that expanded their activity increased to 248 from 112 in the same period the year before

Tunisian Republic



Tunisia is ranked 11th out of 15 countries in the Middle East/North Africa region and its overall score is just below the world average.In January to July 2013, total Foreign ••Direct Investment (FDI) inflows into Tunisia shrank 3,3% y/y to $659,3 million. FDI was 16,3% lower compared to the inflow registered in January-July 2010, prior to the uprising that ousted the Ben Ali’s regime. Just over 95% of FDI went into the real economy and the remainder was invested in the local stock exchange. The number of new foreign firms that launched operations in the country in the first seven months rose to 94 from 77 a year ago. The number of foreign firms that expanded their activity increased to 248 from 112 in the same period the year before.The IMF has predicted growth of 4% ••for 2013 boosted by the return of industrial production to its pre-crisis level, improved mining sector output and a recovery in tourism. Furthermore, private and public consumption will also fuel growth especially because of a decline in unemployment and strong wage increases. 2013 inflation is estimated at slightly above 6,5% by mid-year and 5,3% at the end of 2013, while national debt at 47% of GDP.Tunisia’s government will slash ••spending in 2014 to ease a growing budget deficit currently at 7,4%. Finance Minister Elyes Fakhakh said two-thirds of the subsidies are dedicated to energy while the other third goes toward subsidising staple goods. An austerity plan will target

the energy sector, but did not give specifics. The Tunisian government, according to the minister, currently spends more on subsidies than on developing infrastructure.Tunisian minister of tourism Jamel ••Gamra is positive about the industry’s outlook where 400 000 people are directly employed and up to 20% of the population [almost two million people] makes a living, either directly or indirectly, from tourism. “The sector has big potential and we aim to reach 10 million tourists by 2016, a growth of one million tourists per year. Recent figures released by the Tunisian National Tourism Office confirm that tourism is showing steady signs of recovery. The figures show that by mid-August this year close to four million tourists had visited, generating almost $1,1 billion. An increased police presence is being maintained in resorts this season. Standard & Poor’s (S&P) ••downgraded Tunisian Debt to “B” from “BB-” with a negative outlook in August 2013. S&P stated that they were not confident that Tunisia

would be able to respect its debt obligations and they believe that the legitimacy of the country’s transitional institutions are increasingly contested, which will impede the creation of a new constitution, elections and the fulfilment of growth-promoting economic reforms.

Latest trade developmentsMajor exports: clothing, semi-••finished goods and textiles, agricultural products, mechanical goods, phosphates and chemicals, hydrocarbons, electrical equipmentMajor imports: textiles, machinery ••and equipment, hydrocarbons, chemicals, foodstuffsMain trading partners: France, ••Italy, Germany, China, Spain, Libya and USASA exports to Tunisia totalled ••R53 million in 2011, R149 million in 2012 and R113 million in January to August 2013 SA imports from Tunisia totalled ••R79 million in 2011, R78 million in 2012 and R214 million in January to August 2013

SA EXPORTS TO TUNISIA (TOP 5)

2011 2012

Mineral products R60 609 569

Vehicles, aircraft, vessels and associated transport equipment

R48 620 845

Vehicles, aircraft, vessels and associated transport equipment

R56 632 667 Machinery and mechanical appliances

R48 156 602

Products of the chemical or allied industries

R11 571 703 Products of the chemical or allied industries

R11 824 016

Plastics, rubber and articles thereof

R6 924 934

optical, photographic, cinematographic, medical or surgical instruments; parts and accessories thereof

R3 412 870

Vegetable products R6 458 774 Vegetable products R1 173 083


the Chamber, the certificates, and our trade superheroes In this, the third part of our educational series, we’ll take a look at the last, nonetheless important, components and divisions of the Chamber of Commerce. The Chamber has over the years developed several services and certificates in an effort to make international trading that much safer, simpler. And South Africa had its own very important, albeit tainted, role to play in this . . .

The issuing of certificates of origin (CoO) by the Chamber of Commerce (CoC) began during late 1900.

These certificates, developed and originally intended for the manufacturing sector, aim to help the buyer determine where a product originates from – for credibility. These certificates would, for example, tell the buyer whether a product was indeed a genuine German-made item, if the wine he was considering trading did really come from the best vineyards in France. The seller ultimately needs to get a CoO from their local Chamber for business creditability reasons.

Another type of CoO was later developed for governmental reasons. As more and more governments began

to befriend one another, and started to offer discounts on import taxes to claim those discounts, the buyer had to produce a certificate of origin from the seller’s country (issued by some statutory authority). A good example of this is the EUR1 certificate – which is used between the European Union and a number of other countries around the world.

As an importer you will be paying good money to your seller to supply you with this “government” certificate. As such, you will need to check what it costs. If the discount on the import tax is less than the cost of the certificate, then you are simply wasting your money acquiring the certificate. Rather give the money to your own government – for importing the item without the discount . . . and pay the higher taxes. This would be less than the cost of the certificate, than giving a larger amount to the export country just to get the certificate.

AtA CarnetAnother CoC breakthrough was its agreement with Customs (those ‘Cargo Cops’) to issue the ATA Carnet. The ATA allows us to send products to a country without paying any form of taxes . . . as long as the products are re-exported within one year. This is used when we send samples to our buyers for

example. This ATA is normally controlled by the national CoC of each country.

In 2010, about 160 000 Carnets were issued internationally with a value of over $20 billion worth of cargo, and on which no import taxes were paid. The International Chamber of Commerce (ICC) administers the international guarantee chain of national guarantee organisations which are made up from that country’s CoCs.

Letter of introductionThe name says it all, really: For traders and service providers travelling abroad or to another province of their own country, for the purpose of doing business, a “Letter of Introduction” can be issued by the CoC (of which you are now a member) detailing your line of business and activities. This letter ultimately serves as a means of introducing you, your business, to people, and it gives you a certain amount of credibility. This type of letter is valid for a limited time only, in case your CoC gets a complaint about your business practice. In this case the letter would become outdated.

international business crime bureaus and South Africa’s involvementA maritime “incident” in South Africa during the 1980s prompted the CoC to


Education Series

Global trade: the what’s, why’s and who’sPart 3 of 4*Written by Jim Merrington, EXIT (www.exit.bz).

“The Chamber has over the years developed several services and certificates in an effort to make international trading

that much safer, simpler”


begin combating international crime. On 17 January 1980 a 214 000 ton Supertanker, the Salem, sank off the coast of Senegal. Originally bound for Italy and holding a cargo of crude oil worth $56 million, the Salem had gone off course and ended up in South Africa. There the crew illegally sold Shell Oil’s fuel to the sanctioned government of South Africa.

After discharging her valuable cargo, the ship’s tanks were replenished . . . with sea-water. The sinking of the Salem had been part of an organised plot to defraud Lloyd’s of London, whose syndicates had insured both the cargo and the ship for a staggering $84,2 million.

To crack this case, Eric Ellen, who during that time worked for the International Association of Airport and Seaport Police, approached the CoC (ICC) head office and convinced them to help him set up the now International Maritime Bureau. They financed Ellen with $20 000.

This new branch (the IMB) of the International Chamber of Commerce (ICC) cracked the case and had the South African government pay a settlement of $30,5 million to Shell. Within ten years the IMB was handling cargo and ship fraud cases valued at over $200 million annually.

In an effort to combat counterfeiting – whereas companies illegally replicate popular products often at a much lower cost due to inferior quality – the ICC later formed the Counterfeiting Intelligence Bureau (CIB). Respectable companies would invest huge amounts of money developing and creating markets for their quality products only to be robbed by these devious business people and their fake goods. So endemic was counterfeiting that, by 1990, 14 aeroplane crashes had been traced to having been caused by counterfeit aviation parts. Simply put, without the CIB division of the ICC we would have a much bigger problem on our hands than what we have today (though it is a large problem still).

The ICC went on to form the Commercial Crime Bureau (CCB). This unit was set-up to fight money laundering and the use of fraudulent documents in international trade.

So, three international business crime fighting bureaus came out of what started with criminal activities of the then South African government and

corrupt business people. All the while the country’s future president Nelson Mandela sat in jail. How things have changed.

To recap what the Chamber can do for you, as someone trying to enter international trade:1) Certificate of Origin. 2) UCP 600, Letter of Credit.3) Incoterm codes, the handover

point for the cargo.4) Network of local and international

good businesses. 5) Arbitration service. 6) Certify documents. 7) Advice for your business.8) Training for your business.9) Classify you as a member of

the CoC.10) ATA Carnet.11) Letter of Introduction.12) List of all the local member

businesses that could help you build your organisation.

13) The International Maritime Bureau.14) The Counterfeiting Intelligence

Bureau.15) The Commercial Crime Bureau.

As your business grows and possibly needs more staff to handle your organisation, the Chamber of Commerce is able to offer you ongoing advice and training. As you progress with your business, as a manager or company owner, you will learn several other benefits of your membership with the CoC.

You should have now realised that, as a trader, you are going to need two very knowledgeable friends: one being the shipping industry for moving the cargo, and the other being the bank’s international trade section – for moving the currency. As I’ve mentioned before, don’t wait for something to go wrong and then look for friends to help you. Make your cargo and currency friends from the very beginning!

When I train junior staff at the foreign exchange department and I ask what “Foreign Exchange” is, I often get this standard answer: “when we are changing one currency for another . . . like when the seller’s dollars come in and we change it into our local currency for the seller, or when the buyer needs to pay a supplier overseas, we take local currency out of their account and buy some dollars to pay the overseas supplier”.

This is not the correct answer and the reason they got it wrong is that they

first need to learn a little bit about local trade and then switch those words to international trade words.

If you take costly items to a poorer domestic location in an economic region, you are not going to make any sales as the people in that location are not walking around with that amount of money in their pockets. They do not have the purchasing power.

If you took the same items to a rich domestic location in an economic region, you may land up selling them so fast that you decide to increase your price because of the good purchasing power in the area.

The international word for purchasing power is Foreign Exchange and the international words for price becomes exchange rates. These are two very different terms which you must be able to differentiate between. We’ll examine the details in our next article. u

Until next time, trade safe.

Education Series

About the author:

Jim Merrington started working in

the Port of Cape Town in 1975 as

a cargo controller. By 1980, he

had moved to the Port of Durban

on a promotion as a senior cargo

inspector and promoted to

manager during the mid-80s.

By 1990 he had moved over

to “the shipping company” as

a ships operator.

In the mid-90s Jim began

teaching shipping as a hobby

for training companies and,

by 2000, had bought a training

franchise which he ran part

time. In 2003 Jim’s ‘hobby’

and love of teaching became

his full time ‘obsession’.

Kintetsu World Express (KWE) has become the first southern African logistics company to receive top EU safety accreditation – RA3 designation.

Taking the lead, KWE South Africa became the first freight forwarder to be validated in accordance with the new, stringent EU security measures. The validation was conducted by an EU independent and accredited aviation security validator.

New EU security regulatory measures: 2014Cargo security came under scrutiny when two packages containing viable explosive devices hidden in printer cartridges moved undetected through Europe in October 2010, before they were intercepted in Britain. The serious incident prompted the European Union to introduce, in addition to the ICAO Annexure 17 Regulations (covered under Part 108 of the SACAA regulations), additional measures to include air cargo or mail carriers operating in the EU from a third country airport (non-EU). In essence, this means that as from 1 July 2014, no cargo may be flown on an aircraft into the EU region without strict adherence to these new regulatory measures.

Stepping forwardRichard Szabo, director at KWE SA explains: “our business operations play a fundamental role in underpinning the success of our global footprint”.

Szabo continues: “our ranking as one of the top global freight forwarding companies bears testimony that we

view our role as an integrated logistics supply chain company seriously. We value our role as involved business partners who deliver high quality services and it is thus tantamount that our corporate governance and EU conformance remain progressive, audited and in place.”

EU validation achievement“Our validation underscores our impeccably high standard of service,” comments Ikuhiro Hojo, director at KWE SA “particularly within the aerospace logistics industry. We were one of the first agents in South Africa to be certified against the CAA’s Part 108 security policy and this was by no means an easy feat. We continuously strive towards maintaining the highest possible standards when it comes to managing our customers’ freight.”

independent EU aviation security validatorsAccording to a spokesperson for Professional Cargo Security, EU aviation security validator Sander De Man; KWE SA’s first off the mark move illustrates their commitment to security and willingness to partnership with the EU, in order to achieve greater security. Sander is part of a European association of validators based in the Netherlands, Germany, France and the United Kingdom.

Kintetsu World Express receives top EU safety accreditationSander reiterated that in order to comply with the Regulations, airlines have already made written declarations of commitment to the EU. All forwarding, courier agents, airlines and consignors must become validated by an EU qualified validator accredited as such, by an EU member state.

KWE commendedDavid Alexander, General Manager, Compliance of Professional commended KWE SA as follows: “I am proud to be associated with Kintetsu World Express South Africa in introducing these measures and compliment them on their commitment and dedication to making our skies that much safer.”

iAtA centre of excellence EU independent aviation security validators have been trained through the IATA centre of Excellence for Independent Validators; and were appointed

accordingly. These accredited validators have the mandate as EU representatives to validate airlines (validation reference ACC3), ground handling agents and forwarding agents (validation reference RA3) and known consignors (validation reference KC3) as well as consignors by physical inspection of premises, records systems and procedures. Revalidation is required every five years.

risk assessmentThere are several thousand airline cargo facilities (stations) which have to be validated before the July 2014 deadline. Non-EU countries are categorised depending on risk assessment. The most secure category (in very few countries), require no further security measures except those which are already in place such as the ICAO Annexure 17 measures. Intermediate risk countries must apply all the EU measures and high risk countries may not (except for exceptional circumstances), be able to export by air to EU countries at all.

Professional Cargo Security has made arrangements for another validator to spend time in South Africa within the next few weeks in order to validate forwarding and courier agents as well as known consignors. u

Visit www.kwe.co.za

Another momentous first from KWE


Logistics

Proud to be a part of the achievement: Richard Szabo (left) and Ikuhiro Hojo of the

executive KWE management team


Trade News

Save time, money with Serco’s reversing aid In an effort to offer South Africa’s hauliers avant-garde fleet technology, Ikhaya Automation, a division of truck trailer manufacturer Serco Group, is marketing and distributing a new driver assistance camera system.

The system is designed to assist the driver with reversing and has an in-cab LCD screen linked to a rear mounted camera.

By improving rear visibility utilising a wide angle camera, the driver can

manoeuvre the vehicle for offloading quickly and safely while reducing the chance for damage during docking. Congestion at stores and safety of shoppers are also greatly improved with the increased visibility for the driver.

“While there are other camera systems available these focus on

recording driver behaviour and driving standards,” explains Clinton Holcroft, Managing Director of Serco. “This system does all of this – it also offers the reverse aid facility which assists the driver greatly and saves cost by reducing accident damage and saving time,” adds Holcroft.

The camera system boasts High Definition quality video, can accommodate up to four cameras, records up to eight days of data and incorporates night vision. The rear mounted camera housing also comes with a five-year warranty against damage.

Ikhaya specialises in a number of Telematics products, and will install and support this system which is expected to make a positive difference for fleet owners. u

The Globally Harmonised System of Classification and Labelling of Chemicals (GHS) is widely acknowledged as one of the most significant regulatory changes to affect workplace health and safety practices in years. It is being implemented in the majority of countries around the world and fast becoming a global imperative for safer trade.

The EU, Japan and now through a tripartite agreement China, Korea and Japan as well as Malaysia are leaders. The SADC GHS Policy commits industry in all member states to fully implement and comply by January 2020 BUT a number of SADC countries, for example Zambia and Madagascar, are already in legislative phase as is South Africa with the pending OHS Act revision and Regulations to give the Minister of Labour a mandate for GHS labels and SDS.

The GHS is also embodied in various other pieces of legislation and now the Waste Regulations – hence SA industry needs to be proactive with GHS classification and SDS – start by demanding suppliers provide GHS compliant SDS to assist you with your classification.

Are you ready for OSHA new HazCom Standard? In the United States, more than 5 million workplaces and some 40 million workers will be affected by OSHA’s new Hazard Communication

Standard (HCS 2012), which aligns with the GHS.

Alignment of HCS 2012 with the GHS provides a universal, clear-cut, standardised approach to hazard classification, labels and safety data sheets (SDS). OSHA estimates the revised standard will help prevent 43 fatalities and 585 injuries and illnesses while saving an estimated $266 million a year by reducing safety and health risks. In addition, OSHA estimates annualised benefits of $585 million a year from cost reductions and productivity improvements attributable to HCS revisions.

As a global standard, the GHS is expected to have positive overall effects on human health and the environment through simplified communications on chemical hazards.

Key implementation dates regarding USA GHS-HazCom alignment include:

1 December ••2013: Requires employees to be trained on the new label

elements and safety data sheet format.1 December 2015: Requires ••distributors to only ship containers labelled by the chemical manufacturer or importer with updated GHS labels.

The Responsible Packaging Management Association of Southern Africa (RPMASA) offers training and literature to assist in this regard and will host GHS training in Durban on 23 October at the Square Boutique Hotel, Umhlanga. The RPMASA has several educational posters available for purchase. u

For further information, contact: [email protected] or visitwww.rpmasa.org.za

Are you ready for the new HazCom Standard?

In clear view: The reversing aid assists drivers with accuracy, when reversing

into loading bays

Trade News


Shipping line Safmarine has been honoured at the ‘Ocean Supplier of the Year’ awards. Hosted by CEVA Logistics, a leading supply chain concern, the Ocean Award was first presented to Safmarine in 2011 when CEVA hosted the inaugural Global Supplier Awards.

“It is an honour to be recognised once again by CEVA for delivering on our commitment to providing them with the highest quality of customer care,” said Safmarine CEO, Grant Daly in a press statement.

“This award is also valuable and important recognition for all those in Safmarine who have contributed to a successful CEVA/Safmarine partnership by providing CEVA with the support and solutions they need,” added Daly.

“I also wish to thank and commend the CEVA team on the commitment it has shown to partnering with Safmarine, a partnership which has been in place for the past 12 years.” u

From left: Jonathan Yock (President, Safmarine North America), Andrea Longbottom, Julie Werdine, Leslie Dever, Nora McMahon, Kyle Reinhardt, Arthur Bredehoft, Grant Daly (Safmarine CEO), Richard Huth and Josh Weaver with the CEVA Award presented to Safmarine. The award

recognises the contribution made by Safmarine employees around the world

From left: Safmarine’s Arthur Bredehoft and Grant Daly (Safmarine CEO) with CEVA’s

CEO Marv Schlanger

Safmarine takes Ocean Supplier Excellence Award

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The seaports of Walvis Bay and Lüderitz in Namibia have seen a steady increase of break bulk cargo volumes – much of which is destined for surrounding mines.

Of particular note, said Manica Group Namibia, was the heaviest shipment of plant equipment ever offloaded at Namibia’s southern port of Lüderitz. Manica subsidiary Lüderitz Bay Shipping and Forwarding (LBSF) handled the clearing and forwarding of the hefty 335 metric ton consignment. The initial cargo comprised two heat exchangers, a second shipment steam turbine (143 tons) and a Generator (108 tons) – scheduled for use in the construction of the Khi and Kaxu solar plants erected at Pofadder near Upington in the Northern Cape.

General Manager of LBSF, John Gillham, said that while Lüderitz was the preferred choice to offload the parts, there were some doubts by the clients. “The overriding factor was the favourable and less congested route. So they opted for Lüderitz. However, there was scepticism about the port of Lüderitz and our ability to handle such a heavy load. We were able to offload this large consignment within two hours, having stabilised the vessel with a port tug. The client was impressed with the operations and advised that future shipments of this nature would be headed for Luderitz,” he added.

The unusual cargo, almost as wide as the full width of the road it travelled , caught the attention of the local media. A special 70 metre long and five meter wide trailer with 28 axels and 336 tyres was used to move the load. Three high-power trucks, each with operators, pushed and pulled the trailer driving at speeds of 10 to 20km/h.

To accommodate the load, around N$700 000 is believed to have been spent on improving the road infrastructure between Ariamsvlei (the borderpost) and Lüderitz. The investment included strengthening two bridges, broadening the traffic circle at Keetmanshoop, broadening the road at Grünau while a detour had to be built at the Ariamsvlei border post.

Manica’s Walvis Bay-based clearing subsidiary, Woker Freight Services, also dealt with some heavy equipment – destined for a local mine. One of the largest hydraulic CAT shovels, the 6060FS, was offloaded in more than 50 parts with a total weight of 636 metric tons. WFS also handled a CAT 7495 shovel. These sizeable beasts are used at surface mines of all types to load substantial quantities of ore into haul trucks during the mining process. The heaviest component moved was a structure frame weighing a colossal 63 tons.

Record lifts at Namibia’s Lüderitz


Trade News

Compu-Clearing marks 30 years, hits the roadCompu-Clearing will celebrate its 30 years of service to industry by hosting a series of workshops across South Africa. Scheduled to be held in all major centres, this year’s event – celebrating three decades of the company’s existence – will include in-depth conferences and networking opportunities. The conferences will delve into the past, present and anticipated future of Compu-Clearing, with a panel discussion to answer your questions.

Each event will culminate with a celebratory cocktail party, including entertainment and a keynote address from our Managing Director, Mario Acosta-Alarcon. The events will be held at:

JohannesburgVenue: Premier Hotel O.R. Tambo Address: 73 Gladiator Street,

Rhodesfield, Johannesburg, Gauteng

Date: Thursday, 21 November 2013

Time: 15:30 for 16:00 Cape TownVenue: Southern Sun Cape Sun Address: Strand Street, Cape Town Date: Monday, 25 November 2013 Time: 15:30 for 16:00 DurbanVenue: Garden Court Marine Parade Address: 167 O.R. Tambo Parade,

Marine Parade, Durban Date: Wednesday,

27 November 2013 Time: 15:30 for 16:00

To book you place, please contact Jessica or Aneska: Tel: +2711 012 8700E-mail: [email protected] u

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Of the largest load ever handled at Lüderitz: the giant heat exchangers make up the 335 metric tons headed for the Northern Cape


Trade News

New website from ArikWest and Central Africa’s largest commercial carrier, Arik Air, has unveiled its new-look website.

The revamped domain www.arikair.com includes both new and upgraded features designed to enhance user experience.

The new features include a simplified booking system and an online check-in feature, designed to provide passengers with the ability to check-in from 24 hours before the scheduled departure of the flight to five hours before international flights and three hours before domestic and regional flights.

The site also includes a destinations guide with travel information, weather reports, accommodation, and so on.

The website launch is part of a raft of changes, which are being rolled out to enhance the company’s online offering and customer experience.

The company expects to soon announce a number of additional upgrades to our technology offering over the coming months in a bid to further enhance the service we offer travellers who fly with us. u

South African Airways Cargo (SAA Cargo) partnered with the organisers of the 2013 FCI World Agility Championships – Fullstride Media and the Kennel Union of Southern Africa.

SAA Cargo, the national airline’s Cargo division, transported dogs participating at the FCI Agility World Championships. It is hosted for the first time in Africa and outside of Europe in 18 years. The event took place from 11 to 13 October at the Coca Cola Dome in Northgate, Randburg. The competition is well known amongst dog enthusiasts and attracts teams from all over the world.

“We are proud that we have contributed to bringing the

championships to South Africa and to be associated with an event of this magnitude,” said Tleli Makhetha, SAA Cargo’s General Manager. u

The pawfect partnership

All paws on deck: The FCI World Agility Championship is seen as one of the

high profile dog shows on the international event calendar

Five of Nampak Bevcan’s beverage packaging products were named finalists in the Gold Pack Awards 2013 set to take place on Tuesday, 22 October 2013, at The Wanderers Club in Illovo.

Nampak Bevcan’s product innovations that made it into the Beverage Category as finalists include the beverage can conversion from steel to aluminium; the Castle Lite Cold Rush Easy Flow can top design; the advanced matte print technique applied on Appletiser cans as part of its rebranding; and the new shape Slender Beverage Can range.

The Institute of Packaging (SA)’s respected Gold Pack Awards promotes innovation within the industry and gives research and development (R&D) teams the opportunity to display their greatest and innovative solutions.

“Nampak Bevcan has a long tradition of continuous improvement and invention,” says Klaus Hass, Marketing Director for Nampak Bevcan.

“We are honoured by the recognition of our products and the dedication of our teams to continuously deliver innovative value-added products and services,” says Hass.

These packaging solutions have also qualified to enter into the World Packaging Organisation’s (WPO) WorldStar competition, which recognises packaging that is superior in its own right and better in its class, in execution, or innovation by comparison. u

Nampak Bevcan looks for gold

Klaus Hass, Marketing Director for Nampak Bevcan

Online business game The Fresh Connection Challenge is attracting entries from a wide variety of businesses, including those in South Africa, eager to test their prowess and improve their skills in supply-chain logistics.

Last year, the South African leg of this globally played game was won by a team from Appletiser, who finished second overall in the global final. This year, a team from EY Africa, comprising Rajeev Devalall, Andre W Mulder, Richard Reader, Johann H van der Merwe and Samantha Zambezi, outperformed all competitors, nationally and internationally, in the initial stages of the competition. They are now in Istanbul in Turkey for the final, where they have to start a new game from scratch.

Sponsored by DHL Global Forwarding, the game uses an informative web-based simulation, requiring teams to manage a supply chain and the financial and business consequences of their decisions more efficiently and by so doing “save” a fictitious failing juice company. It is designed to make teams focus on developing cross-functional partnerships with key stakeholders in the value chain; driving profitability through collaboration and aligning functional goals with company objectives. DHL sponsors the

game to highlight the importance of supply-chain management in the globalised market, and to stress the need for logistics managers to remain flexible and reactive in a fast-changing environment, rather than trying to apply a rigid logistics model.

The secret to success in the game lies in education, behavioural change, teamwork, collaboration and partnership, and the EY Africa team credit their win to applying those values. In terms of what the game

taught them, says contestant Richard Reader, “It was general supply chain understanding – how the different functions of the supply chain actually fit together; the intricacies and interdependencies between the different functions need to work optimally. The Fresh Connection is uniquely positioned to teach you those kinds of things, because it’s a very thorough simulation of a real supply chain.”

One of the most important lessons the game teaches is the need for a holistic approach between a company’s divisions; many businesses tend to operate in “silos”, with different departments effectively in competition with each other, effectively optimising their own priorities rather than working according to a unified strategy. u


Ready for a challenge: the team representing South Africa at The Fresh Connection

Challenge 2013 in Istanbul, Turkey

SA team heads to Turkey for a Fresh challengeTrade News

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Trade News

Poultry tariff increase – will it work?

Power saving on container refrigeration unitsTransport refrigeration major Carrier Transicold now offers the QUEST™ II power-saving mode for its container refrigeration units – providing container shipping lines a means to reduce energy required for refrigeration by up to 65% while reducing emissions related to power generation.

An acronym for QUality and Energy in Storage and Transport, QUEST II mode is a special control software designed for use with perishable cargoes, helping improve refrigerated container shipping by reducing costs associated with onboard energy production and the associated greenhouse gas emissions. As with the original QUEST mode, which was introduced in 2007 and capable of providing energy savings of up to 50% for certain commodities.

By implementing QUEST II throughout its refrigerated container operations, Maersk Line anticipates a 350 000 metric ton reduction in its annual CO2-equivalent (CO2e) emissions, an amount comparable to the CO2e emissions of cars driving two billion kilometres (1,2 billion miles). The reduced power loads enabled by QUEST technology also allow Maersk vessels to accommodate more refrigerated containers than possible before. Savings and efficiencies are achieved while also maintaining strict adherence to product quality and customer satisfaction.

Said Kartik Kumar, director of Marketing and Strategic Planning, Global Container Refrigeration, Carrier Transicold: “With worldwide use of the QUEST mode surpassing a quarter-million refrigerated containers, it’s clear that the technology appeals to shipping lines as well as growers and exporters who want to reduce the carbon footprint of their operations and products,” Kumar said.

Like the original, QUEST II uses scientifically proven formulas to selectively manage refrigeration system component operation to conserve energy, allowing air temperature variations without compromising the pulp temperatures of produce in transit. The more highly refined software algorithms in QUEST II provide a 30% boost over the energy savings provided by the original QUEST mode, resulting in even lower operating costs and reduced environmental impact.

The QUEST II has been tested extensively on a variety of commodities, including apples, bananas, pineapples, kiwifruit, grapes, garlic, iceberg lettuce, chilled lamb meat, lily bulbs and potted plants. These items were selected because of their known temperature sensitivity and the large volumes in which they are regularly transported. u

Visit www.carrier.com/container.

In response to the announcement of a new tariff regime for SA’s poultry sector, that will see duties on imported poultry products increase, Gareth Lloyd-Jones, MD of Ecowize, a health and sanitation company servicing that food sector, says that the increase in tariffs on imported poultry products will bring welcome relief to the struggling local poultry industry.

“The industry will now be in a better position to compete with what used to be unprecedented cheaper poultry products being opportunistically imported or dumped in the South African market – which was putting significant pressure on local farmers to keep costs down.”

He says chicken dumping caused great harm to local producers through higher price undercutting, lost market and reduced growth.

According to Lloyd-Jones, the benefit of cheaper imports over the last three years has not necessarily been passed on to the consumer. “Instead, retailers, wholesalers, value adding producers and large institutional feeding schemes have also enjoyed a higher margin on these products and have in many instances retained the benefit for themselves and not passed this on to the consumer.” Lloyd-Jones adds that if retailers come to the party, the impact to the end consumer will be negligible.

“In some instances, imported chicken has actually been more expensive to the consumer than local chicken. This is consistent with the research on the topic which indicates that any price benefit to the consumer attributable to imports is normally short lived, and prices normalise in the short term.”

Furthermore, he states that chicken prices per kg are still at price levels of 2008 and over the same period, the industry’s cost structure has doubled, with maize, labour and energy costs being the main contributors.

“Some producers have performed better than others, though this is often the exception rather than the rule – especially as the industry has already seen two closures and over 6 000 retrenchments.”

When analysing the detail, the whole bird tariff increases are actually a very small implication, as they only represent 1% of imports. The basket tariff increase equates to only less than 9% increase on tariffs. “The fact is, just like any other product, prices of chicken need to increase to sustain an industry, not because of the import tariffs.”

Lloyd-Jones advises that a more meaningful intervention than the tariff increases would be a quota, as the industry is oversubscribed with imported Individually Quick Frozen (IQF) poultry products and therefore the process has remained suppressed. “By introducing a quota, allowing the stock to clear, even in the short term, would have had a more meaningful impact in the long-term. Quotas are unfortunately not within the World Trade Organisation’s guidelines.”

Furthermore, he argues that Government should also look at certain subsidies for farmers. u

QUEST II : Helping raise the environmental profile of the refrigerated shipping industry


Trade News

A manufacturer of automated feeding systems for intensive poultry and pig farms, Technical Systems, has been crowned the overall award at this year’s Absa – Cape Chamber of Commerce Western Cape Exporter of the Year Competition.

A Bellville, Cape Town-based company, Technical Systems was named the overall winner at this year’s annual event at a gala banquet at Pigalle Restaurant in Cape Town on 10 October.

This is the sixth export award for the firm over the last ten years. Technical Systems was the overall winner in 2003 and it has also earned the award for the best manufacturing exporter four times during this period. The company makes and exports its feeding systems to more than 50 countries, including China where it has a growing market.

“Congratulations to Technical Systems on their outstanding achievements over the last decade, this is an inspiration to other exporters. This is further proof that South African companies can compete with the best in the world and produce quality products at prices that

are relevant even in the cost competitive countries of the East,” says Mr Jason Barrass, Head of Trade and Working Capital, at the Corporate and Investment Banking division of Absa.

“Exports to developing markets, especially in Africa and the East, have grown phenomenally, with all exports currently accounting for slightly more than 26% of South Africa’s GDP. South African exporters are also taking advantage of new markets in Africa, with five African countries featuring amongst South Africa’s top 20 export destinations,” said Mr Barrass.The Transnet National Ports Authority (TNPA) Trophy for a non-manufacturing company went to JF Hillebrand, a logistics firm which provides services to the wine and other export industries.

The award for the best manufacturing company, the Transnet Port Terminals Trophy, went to Macadams International, manufacturers of a full range of equipment for bakeries. This is the third success in the competition for Macadams who were the outright winners in 1992 and 1995.

The Credit Guarantee Trophy for the best small exporter went to Rarity Handbags. The Cape Chamber’s trophy for innovation went to the HIK Abalone Farm in Hermanus.Nautic Africa, a manufacturer and exporter of aluminium patrol boats, won the Gerald Wolman award for excellence in doing business in Africa.

The SA Maritime Safety Association design trophy went to film company, The Asylum, which earned an Oscar nomination for a documentary film. The Chamber’s Transformation trophy went to Cape Metal Pressings, manufacturers of parts for shock absorbers to the motor industry. u

Western Cape Exporter Award goes to . . . Technical Systems

Recognised for the hard work and dedication: Technical Systems took home the overall

Absa – Cape Chamber of Commerce Western Cape Exporter of the Year award. From

left is Francois Visagie (Absa), George Ohle (Absa), Theuns Kühn (Technical Systems), Viola

Manuel (Cape Chamber of Commerce)


To add your event to our calendar or request further information of an event, contact the editor: [email protected] or visit the web pages provided.

*Highly recommended

AfricaAfrica Maritime Indaba 2013IDC Conference Centre, Sandown, Gauteng, South Africa24 to 25 October/www.sanec.org

African Airport Evolution Forum 2013Nairobi, Kenya28 to 30 October/www.hypenica.com

PMAESA Conference (Africa’s Maritime Economic Integration)Durban ICC, South Africa4 to 5 November/www/pmaesaconference2013.co.za

2nd Annual African Railway SummitJohannesburg, South Africa5 to 6 November/scl.fleminggulf.com/ african-railway-summit

Disability Trade and Lifestyle Expo & Conference (For transport CEOs)Expo Centre Nasrec, Johannesburg, South Africa7 to 8 November/ www.mcnaughtonevents.co.za

China Sourcing Fair Gallagher Estate, Midrand, Johannesburg, South Africa7 to 9 November/ www.chinasourcingfair.com

Africa Movers & Makers Summit, Awards Cape Town, South Africa14 to 15 November/www.sclc.za.com

*Gauteng Exporter of the Year AwardsJohannesburg, South Africa22 November/www.jcci.co.za

13th Annual KLCBT Business Awards (Kruger/Lowveld Chamber)22 November/www.klcbt.co.za

Signal Aids to Navigation Seminar: Focus on AfricaPepper Club Hotel, Cape Town, South Africa3 to 5 December/www.tidelandsignal.com

Global*CSCMP’s Annual Global Conference 2013Colorado Convention Center, Denver, Colorado, USA20 to 23 October/www.cscmp.org

ICHCA International “Understanding the new IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (CTUs)”London, England22 October/www.etouches.com/ichca- ctu-packing

8th Southern Asia Ports, Logistics and Shipping The Leela Kempinski Hotel, Mumbai, India 23 to 24 October/www.transportevents.com

Asian Logistics and Maritime Conference (ALMC)Hong Kong Convention and Exhibition Centre, Hong Kong7 November/www.asialogisticsconference.com

MHEDA: Selling strategies for the materials handling professionalRosemont, United States, 7 to 8 November *Truck&Bus World Forum Lyon, France 21 to 22 November/ www.truckandbusworldforum.com

CeMAT INDIA 2013New Delhi, India 17 to 20 December

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23075 export 09/2013 - export & import south africa oct 2013.pdfhave i had the opportunity of...

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