[Johannesburg: 21 November 2018] Transnet SOC Limited has announced its intent to enter into a fifteen-year concession agreement with AFGRI Operations (“AFGRI’) for the operation and maintenance of landside operations with Transnet Port Terminals. The agreement will focus on two strategic agri-ports in the country, the East London Grain Elevator in the Port of East London and the Durban Agri-Port at the Port of Durban.
This initiative between Transnet and AFGRI will breathe new life into the two terminals through refurbishment, funding, and marketing projects.
Agri-ports are regarded as strategic facilities for the country, impacting on critical needs such as food security, transformation and long-term growth within agricultural logistics.
The lack of capital investment, as well as a decline in market share, has pressed Transnet to look for a private sector partner to turn these facilities into integrated and efficient agrilogistic supply chain services. This will complement existing providers in Durban.
The fifteen-year contract with AFGRI will allow the company sufficient time to recoup its capital investment, which is currently required to give the terminals a face-lift and install the necessary processes to ensure efficiency.
In addition to this, AFGRI will be in charge of customer engagements, contracting maintenance, repair and overhaul of the terminals landside equipment and plants.
Transnet Port Terminal, among other things, will provide the funding needed to restore or reconfigure the quayside plant and equipment and provide efficient rail capacity for private sector partners.
The East London Grain Elevator, situated on the West Bank of the Port of East London, is the largest port based grain elevator in South Africa with a potential capacity of 720 000 tons per annum. Currently, the facility handles between 80 000 and 100 000 tons of grain per annum.
The East London agri-port is a natural market for maize export originating from the areas of Kroonstad, in the Free State and the servicing of the Eastern Cape milling industry. It also acts as an overflow terminal for the Port of Durban during peak harvesting seasons.
This partnership will also further strengthen Transnet’s road-to-rail strategy, which is already witnessing a slight volume increase in the Port of East London.
The Durban Agri-port is one of the three agri-bulk terminals in the Port of Durban; the other two terminals are operated by South African Bulk Terminals and Bidvest Bulk Terminals respectively.
The Port of Durban is known for its excellent road and infrastructure connections to inland provinces such as the Free State and Gauteng. The terminal has an installed capacity of 156 000 tons which translates to 1.8 million tons per annum of capacity assuming the product is turned every month of the year. Potential capacity at the terminal is projected to be between 600 000 to 700 00 tons per annum. The terminal also has the ability to handle wheat and soya bean imports as well as ad-hoc projects on request.
Chris Venter the CEO of AFGRI Group Holdings, the holding company of AFGRI, said: “This is a milestone agreement between Transnet and AFGRI and hugely beneficial to South Africa to ensure the agri-ports are effectively managed. We have decades of solid experience in dealing with logistics and the storage and movement of grain. This agreement supports our endeavours to nurture food security across the continent and we look forward to supporting Transnet at their agri-ports.”
Transnet’s Chief Business Development Officer, Gert De Beer said: “The proposed arrangement would create the platform for synergy between Transnet and the private sector in providing an integrated logistics solution into the Agri-market. The project offering will be designed to optimise direct developmental benefits as well as having significant impact on the broader Agri-sector, which will further unlock developmental benefits for the economy.”
Both AFGRI and Transnet Port Terminal will be in charge of planning and scheduling of landside and quayside operations, health and safety as well as legal matters. It is intended that the operations will be integrated from April 2019.
Issued on behalf of Transnet SOC Ltd
By: Mr Molatwane Likhethe, GM: Corporate and Public Affairs.
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