New legislation requiring all future government shipbuilding projects to have 60% local content will stimulate the industry and protect it from international competitors that have lower wage rates.
This is according to Southern African Shipyards‚ a shipbuilding company based in Durban‚ which has won a R1.4-billion Transnet tender to build nine harbour tugs for large vessels.
The company does shipbuilding mainly for the South African Navy‚ and maintenance and repairs for commercial clients. On August 21‚ the Department of Trade and Industry issued an instruction that any future shipbuilding for the state or state-affiliated organisations must have 60% local content‚ Southern African Shipyards marketing general manager Charles Maher said.
The industry had been lobbying for this kind of protection since 2000‚ Maher said. “The main factor is stimulation of the shipbuilding industry to become more competitive on a national scale.”
Department spokesman Sidwell Medupe said it had decided on the local content requirement three months ago‚ as part of the government’s procurement policies.
The government launched the first phase of Operation Phakisa‚ an initiative aimed at fast-tracking the goals laid out in the National Development Plan‚ earlier this year. The first phase will be led by the Department of Environmental Affairs and will focus on developing a “blue economy” strategy to unlock the economic potential of the oceans around SA.
The Phakisa programme had R5-billion available for various shipbuilding projects‚ Maher said.
“The focus on blue shipbuilding will draw international competition but significant protection has been given to South African companies‚” he said.
However‚ DCD Marine managing director Gerry Klos said the recommendations on Operation Phakisa were still to be released to the public. DCD Marine is another local shipbuilding and repair company. Klos said the local industry competed with international shipbuilding and repair companies that were seeking opportunities in the South African market. A challenge was that infrastructure restricted the building of large vessels.
“The current shipbuilding facilities and infrastructure restrict from building vessels larger than 120m in length‚ which is also not conducive to large-scale commercial shipbuilding projects,” said Klos. South African ports had the capacity and the docking facilities for vessels of all sizes for local and international clients‚ and discoveries of oil and gas on the continent were driving infrastructure development‚ he said. However‚ an understanding of the market was important‚ with continuing analysis required.
“The shipping market is constantly in a cycle of growing and shrinking. It is vitally important to study international trends very carefully before investing in additional capacity‚” Klos said. — BDLive
New law boosts SA shipbuilding
This is according to Southern African Shipyards‚ a shipbuilding company based in Durban‚ which has won a R1.4-billion Transnet tender to build nine harbour tugs for large vessels.
The company does shipbuilding mainly for the South African Navy‚ and maintenance and repairs for commercial clients. On August 21‚ the Department of Trade and Industry issued an instruction that any future shipbuilding for the state or state-affiliated organisations must have 60% local content‚ Southern African Shipyards marketing general manager Charles Maher said.
The industry had been lobbying for this kind of protection since 2000‚ Maher said. “The main factor is stimulation of the shipbuilding industry to become more competitive on a national scale.”
Department spokesman Sidwell Medupe said it had decided on the local content requirement three months ago‚ as part of the government’s procurement policies.
The government launched the first phase of Operation Phakisa‚ an initiative aimed at fast-tracking the goals laid out in the National Development Plan‚ earlier this year. The first phase will be led by the Department of Environmental Affairs and will focus on developing a “blue economy” strategy to unlock the economic potential of the oceans around SA.
The Phakisa programme had R5-billion available for various shipbuilding projects‚ Maher said.
“The focus on blue shipbuilding will draw international competition but significant protection has been given to South African companies‚” he said.
However‚ DCD Marine managing director Gerry Klos said the recommendations on Operation Phakisa were still to be released to the public. DCD Marine is another local shipbuilding and repair company. Klos said the local industry competed with international shipbuilding and repair companies that were seeking opportunities in the South African market. A challenge was that infrastructure restricted the building of large vessels.
“The current shipbuilding facilities and infrastructure restrict from building vessels larger than 120m in length‚ which is also not conducive to large-scale commercial shipbuilding projects,” said Klos. South African ports had the capacity and the docking facilities for vessels of all sizes for local and international clients‚ and discoveries of oil and gas on the continent were driving infrastructure development‚ he said. However‚ an understanding of the market was important‚ with continuing analysis required.
“The shipping market is constantly in a cycle of growing and shrinking. It is vitally important to study international trends very carefully before investing in additional capacity‚” Klos said. — BDLive
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