Grindrod joins up with empowerment company
Jul 25, 2003
Durban-based shipping and logistics group Grindrod disclosed its intentions with regards to port concessioning this week with the announcement that it is forming a joint venture incorporating Grindrod and black economic empowerment company (BEE) J&J Group.
The move obviously holds some significance in view of the impending concessioning of port terminals, both in South Africa and other regional countries, particularly since Grindrod recently bought out the P&O Group interests in two other South African joint venture companies - P&O Grindrod Logistics and Kusasa Bulk Terminals. The latter operates a heavy minerals terminal at Richards Bay with assets of R130 million, and P&O Grindrod Logistics has wharfside facilities at most ports with a strong presence in Durban.
The latest development would appear to free both Grindrod and P&O Ports to act independently when it comes to concessioning.
According to a communication from the new company, both shareholdings (Kusasa and P&O Grindrod) have been onsold to the newly created Grindrod J&J Logistics Company to provide the basis for a terminal and logistics business involved in South African ports. The deal became effective on 1 July 2003 utilising what Grindrod says is some innovative financing to facilitate the venture.
The development also strengthens Grindrod’s positioning in terms of the BEE requirement. “The joint venture provides critical operating mass and expertise to establish an effective logistics player across South Africa and the continent, to take up the opportunities that are opening up as a result of the restructuring taking place,” says Jay Naidoo, J&J’s chairman, who brings to the joint venture a network of African entrepreneurs and intellectual capital.
Ivan Clark, managing director of Grindrod said the joint transaction confirmed Grindrod’s commitment to South Africa and enhanced the company policy of promoting value added empowerment transactions at operating level.
“For Grindrod, the joint venture with J&J opens up huge opportunities in the freight logistics market as numerous customers are looking for top class service from truly empowered companies.”
All terminal operators who intend bidding for the concessioning of SA port terminals will be required to meet stringent BEE requirements.