Transnet‚ the state-owned freight and logistics group‚ is making headway in its “Africa strategy”‚ with the company now looking to build a factory on the continent outside SA. The company aims to become an original equipment manufacturer of rolling stock.
“ will depend on where we get long-term contracts which will make sense for us economically to go and invest‚” says Transnet Engineering chief executive Thamsanqa Jiyane.
However‚ weak demand for a number of commodities may prove a challenge to the parastatal’s aggressive strategy as railway operators on the continent have cut down on investments.
The rail network in SA accounts for about 80% of the entire continent.
Standard Bank estimates that Africa would need to invest $50-billion (R710-million) over the next decade to develop 4000km of additional rail infrastructure.
Transnet has identified 10 countries in Africa where it is pursuing opportunities. Existing customers include Rio Tinto for its Mozambican operations; Botswana Rail; Mozambique’s Corredor de Desenvolvimento do Norte; and Central East African Railways‚ which operates in Mozambique and Malawi.
Transnet Engineering was initially created to supply rolling stock and maintenance services for Transnet Freight Rail‚ the group’s largest subsidiary.
Transnet Engineering also provided maintenance services to the Passenger Rail Agency of SA.
However‚ about three years ago‚ the Transnet board decided to market the company as an original equipment manufacturer of wagons‚ coaches and locomotives for Africa.
The parastatal has since made significant strides in realising its ambition of becoming an original equipment manufacturer:
l More than R3-billion worth of contracts are in the bid stage to supply wagons and passenger coaches to various African countries.
l 20% of Transnet Engineering’s annual R11-billion order book is for African clients outside SA. The rest is generated from within the Transnet group.
l Before June‚ Transnet Engineering is expected to launch its Africa locomotive‚ which it has been developing over the past three years.
l Transnet has six factories in SA‚ where it has capacity to manufacture 4000 new wagons and refurbish 3000 wagons a year.
Jiyane said there were no orders yet for the locomotive because it would be difficult for clients to buy the product without having test-driven it. The diesel locomotive is meant for use on branch lines and in yards.
Jan Havenga‚ of Stellenbosch University’s Centre for Supply Chain Management‚ says SA is the slowest growing economy south of the Sahara‚ which makes Transnet’s Africa Strategy of critical importance for the country.
As a state-owned company Transnet should also support the economic objectives of the country‚ he says. “SA’s own future trade growth will become more and more dependent on Africa. We need to be involved.”
Havenga says Transnet’s movement into the rest of Africa will enable the group to create alternative revenue streams and diversify its investment from only bulk mineral transport to include important markets such as fast-moving consumer goods.
JSE-listed shipping and logistics company Grindrod is building locomotives for Mozambique and Angola in partnership with Transnet‚ from Transnet Engineering’s Koedoespoort factory‚ just outside Pretoria.
Jiyane says Transnet Engineering has had the design for passenger coaches but this is the first time it has been put into production.
The company has manufacturing facilities in locations including Pretoria‚ Germiston‚ Bloemfontein and Salt River in Cape Town.
Transnet looks to Africa
“ will depend on where we get long-term contracts which will make sense for us economically to go and invest‚” says Transnet Engineering chief executive Thamsanqa Jiyane.
However‚ weak demand for a number of commodities may prove a challenge to the parastatal’s aggressive strategy as railway operators on the continent have cut down on investments.
The rail network in SA accounts for about 80% of the entire continent.
Standard Bank estimates that Africa would need to invest $50-billion (R710-million) over the next decade to develop 4000km of additional rail infrastructure.
Transnet has identified 10 countries in Africa where it is pursuing opportunities. Existing customers include Rio Tinto for its Mozambican operations; Botswana Rail; Mozambique’s Corredor de Desenvolvimento do Norte; and Central East African Railways‚ which operates in Mozambique and Malawi.
Transnet Engineering was initially created to supply rolling stock and maintenance services for Transnet Freight Rail‚ the group’s largest subsidiary.
Transnet Engineering also provided maintenance services to the Passenger Rail Agency of SA.
However‚ about three years ago‚ the Transnet board decided to market the company as an original equipment manufacturer of wagons‚ coaches and locomotives for Africa.
The parastatal has since made significant strides in realising its ambition of becoming an original equipment manufacturer:
l More than R3-billion worth of contracts are in the bid stage to supply wagons and passenger coaches to various African countries.
l 20% of Transnet Engineering’s annual R11-billion order book is for African clients outside SA. The rest is generated from within the Transnet group.
l Before June‚ Transnet Engineering is expected to launch its Africa locomotive‚ which it has been developing over the past three years.
l Transnet has six factories in SA‚ where it has capacity to manufacture 4000 new wagons and refurbish 3000 wagons a year.
Jiyane said there were no orders yet for the locomotive because it would be difficult for clients to buy the product without having test-driven it. The diesel locomotive is meant for use on branch lines and in yards.
Jan Havenga‚ of Stellenbosch University’s Centre for Supply Chain Management‚ says SA is the slowest growing economy south of the Sahara‚ which makes Transnet’s Africa Strategy of critical importance for the country.
As a state-owned company Transnet should also support the economic objectives of the country‚ he says. “SA’s own future trade growth will become more and more dependent on Africa. We need to be involved.”
Havenga says Transnet’s movement into the rest of Africa will enable the group to create alternative revenue streams and diversify its investment from only bulk mineral transport to include important markets such as fast-moving consumer goods.
JSE-listed shipping and logistics company Grindrod is building locomotives for Mozambique and Angola in partnership with Transnet‚ from Transnet Engineering’s Koedoespoort factory‚ just outside Pretoria.
Jiyane says Transnet Engineering has had the design for passenger coaches but this is the first time it has been put into production.
The company has manufacturing facilities in locations including Pretoria‚ Germiston‚ Bloemfontein and Salt River in Cape Town.
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