Ports & Ships Maritime News

May 26, 2008
Author: P&S

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  • Illovo to up its investment in Mozambique sugar

  • Indian Ocean islands expect 20,000 cruise passengers for 2008 – 2009 season

  • PetroSA increases capacity at Coega plant

  • Pirates free Jordanian ship Victoria

  • News from the shipping lines

  • Lonrho appoints former Portnet CEO Sipho Nyawo to African board

  • Special Report: Economic growth - only way out of poverty

  • Pic of the day – MAERSK BROOKLYN


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    Illovo to up its investment in Mozambique sugar

    South Africa’s leading sugar producer Illovo Sugar says it intends investing a further R250 million on doubling the company’s sugar production in Mozambique to 300,000 tonnes a year.

    Announcing this last week Illovo chief executive Don MacLeod said the investment would be made over the following two years at the Maragra factory “as part of our expansion strategy.”

    MacLeod said the initial aim is to supply the local market before looking to export to the European Union. Additional investments in Mozambique, Zambia, Tanzania and Mali will be made possible by the free access regime that is due to come into force in 2009 within the European Union.

    According to MacLeod Illovo Sugar will expand its operations in Mali by way of a new factory to be built at a cost of R1.4 billion, which will produce 200,000 tonnes of sugar annually. That’s on top of a recently completed expansion project in Zambia enabling production to increase initially to 300,000t and later when the second phase is completed in April 2009, to 440,000t.

    Together with smaller expansion projects in Tanzania and Malawi Illovo Sugar expects to increase its sugar production capacity over the next five years.

    Illovo also announced increased headline earnings for the 2007/08 financial year ending 31 March which rose by 16 percent to R600 million, enabling the company to increase earnings per share by 15 percent to 171.6 cents a share, up from 149.1c per share.

    Indian Ocean islands expect 20,000 cruise passengers for 2008 – 2009 season

    report by Alain Malherbe (AeroShip - Port Louis)

    Mauritius, La Reunion, Madagascar and Seychelles will be joining forces to promote the Indian Ocean as a cruising destination. In this respect an internet website will be jointly developed by the four islands.

    Robert Desveaux, president of Mauritius Tourism Promotion Authority (MTPA), say he is convinced that cruising represents THE sector of the future.

    “The Indian Ocean has all the necessary assets to succeed in the development of such industry .The proximity of the Indian Ocean Islands, their capabilities to offer their respective authenticity, and the variety of their products.”

    However, such success will be essentially reliant on the participation of the various ports.

    It is of primary importance to encourage the other ports to develop and improve their respective products and to give the level of service claimed by cruising companies, Robert Desveaux observed.

    “It is not only about having the right infrastructures”, he said, “there is also the human side as well as the authenticity of each destination that forms the essential elements of success.”

    Cruising tourists usually seek “a concentration of events, visits, of happiness and emotions,” according to Robert Desveaux.”

    Cruising is becoming more and more extensive in Mauritius. MV Costa Marina and MV Odyssey from British company Foresight Ltd lately chose Port Louis as home port for the season 2008-09. The Odyssey, a four-star hotel standard ship with a capacity of 450 passengers will perform calls to the neighboring islands.

    “Mauritius has a very good potential in the cruising tourism sector. We plan to invest 50 million dollars in the first stage,” declared Ravi Kumar Mehrotra, Chief Executive Officer of Foresight Limited.


    Between January and March, twelve passenger cruises called at Port Louis bringing approximately 10,000 passengers. Seventeen more vessels are expected to call Port Louis for the 2008/09 season with more than 20,000 passengers on board.

    In 2007, the island welcomed only eleven steamers and 6,163 passengers.

    Rs 400 million (approximately USD 15.385m) will be invested in the construction of a quay for cruises at ‘Les Salines’. It will be located between the Caudan Waterfront and Bulk Sugar Terminal. This project will consist of a pier of 100 metres and a terminal for passengers of 1,000 square meters. Work will begin in September 2008 and will be expected to complete around May 2009.

    PetroSA increases capacity at Coega plant

    by Bathandwa Mbola

    Port Elizabeth 23 May - The Petroleum Oil and Gas Corporation of South Africa (PetroSA), the country's state-owned oil company, has increased the size of a planned refinery at Coega near Port Elizabeth.

    The plant, which will cost about USD 11 billion, will have a capacity of 400,000 barrels a day, rather than the previously proposed 250,000 barrels a day (bpd).

    The board approved this increase on Thursday, after evaluating the conclusions of a recently completed pre-feasibility study undertaken by a leading US-based refinery engineering company, KBR.

    The Coega refinery (known as Project Mthombo) will be the lowest cost producer in sub-Sahara Africa.

    This is due to economies of scale, proven world-class technologies and crude processing flexibility.

    “This will enable it to accomplish a balancing role and sustain a competitive advantage in open market conditions within both local and export environments while meeting the highest global standards of product quality and environmental responsibility,” PetroSA Vice-President of New Venture: Midstream, Joern Falbe, said on Thursday.

    “The design configuration to process a wide spread of feedstock, with prominence given to lower-cost heavy, sour and acid crudes, is the primary driver in maximising commerciality as well as security of supply.”

    By 2014, when the refinery is due to be commissioned, South Africa will already be experiencing a shortfall of locally-refined product of about 200,000 bpd.

    This will be due to South Africa’s projected economic growth and low investment in existing refineries.

    This shortfall will be met by importing product - an expensive solution that has a major impact on foreign exchange and increases potential supply vulnerability.

    PetroSA’s original base case of a 250,000 bpd crude refinery on the east coast of South Africa proved robustly attractive to meet the country's medium term fuel growth requirements.

    However, acknowledging the National Oil Company's mandated role to reduce external dependency in national energy security requirements, combined with input from potential international partners who recognise the flexibility of Coega to supply diverse markets and mitigate risk, the Board of PetroSA has approved expanding the planned refining capacity to 400,000 bpd.

    “After evaluating all operational, logistical and environmental considerations, 400,000 bpd was deemed the most suitable configuration,” said Mr Falbe.

    He added that this increase from 250,000 to 400,000 bpd increased project funding.

    “However, due to the economies of scale, the investment cost per barrel reduces by 20 percent and operating costs improve by 30 percent, boosting the original project economics substantially.

    “A recently-completed logistics study has confirmed that crude supply in VLCCs [very large crude carriers] via a SPM [Single Point Mooring] is technically and operationally feasible, and PetroSA now awaits the outcome of an environmental and engineering analysis to determine the most suitable location for the facility,” said Mr Falbe.

    The positioning of this highly competitive, world-class mega refinery will help to diversify crude and product supply structures in South Africa by providing an essential strategic supply alternative to the country's main inland markets.

    A future product pipeline from Coega to Gauteng, commercially viable, becomes a justifiable reality in the medium term.

    Fast track project projections indicate that the streaming of Coega remains on target for 2014. - BuaNews

    Pirates free Jordanian ship Victoria

    Amman (Jordan), 23 May – Jordanian Transport Minister Alaa Batayneh announced on Saturday that the Jordan-flagged Emirates-owned general cargo ship Victoria, which had been seized on 17 May by Somali pirates, has been released together with the crew of 12.

    “We have been informed by the ship's owner, Marwan Shipping and Trading Company, that the ship and its crew and cargo were released on Friday,” Batayneh said, adding that the Danish authorities have informed Jordanian maritime officials that the vessel's crew were in good health.

    He was unable to comment on whether a financial ransom or other type of deal had been struck.

    The crew of 12 is made up of Pakistanis, Indians, Bangladeshis and Tanzanians

    Victoria is carrying a cargo of 4,200 tonnes of sugar in the form of humanitarian aid donated by Denmark.

    According to reports coming from Kenya, the ship was again under way and heading towards its original destination of Mogadishu to discharge the cargo which is reported as being largely intact. A small number of Somali soldiers are on board to help protect the vessel in the event of another attack.

    Earlier reports indicating that some of the sugar was being sold in the town opposite where the ship was being held, approximately 500km northeast of Mogadishu, cannot be confirmed.

    In an unrelated incident, the BBC has reported that seven Somali pirates who had seized the cargo dhow AL-KHALEEJ in Puntland waters (the semi autonomous region of Northern Somalia) have been given life sentences for piracy by a court.

    Another four Somalis who assisted the pirates were given similar sentences on a charge of ‘taking people hostage with the aim of obtaining a ransom’. The convicted pirates were being held in the Puntland capital of Bosasso.

    News from the shipping lines

    Hamburg Süd’s largest container ship, the 5,900-TEU RIO DE LA PLATA which made her maiden call at Durban on Saturday, 24 May 2008. Along with her still to be introduced consorts the Rio de la Plata will ultimately move to the ECSA - Europe service, releasing ships of the 5,500-TEU Monte Class onto the Asia - South Africa - ECSA routes. Picture Hamburg Süd

    Hamburg Süd introduces latest and largest ship

    South African ports continue to play host to a growing number of maiden ship visits as shipping lines adjust their fleets and trade routes, generally introducing larger tonnage.

    The reasons for this conversion to bigger ships are fairly straightforward. As demand increases, particularly for consumer goods coming out of Asia, so shipping lines have gone the route of introducing larger ships that bring economies of scale while being capable of absorbing increasing traffic.

    This usually takes place initially on the major trade routes, such as Asia – Europe, but also has a cascading effect as large ships already deployed there are replaced by the mega ships and released for transfer to secondary trade routes.

    South Africa probably features somewhere in the region of the third strata of trading routes but it is noticeable that certain shipping lines have begun introducing ships in the 6,000-TEU (twenty foot container equivalents) range much sooner than had been expected. Only a few years earlier these 6,000-TEU ships were still being regarded as the giant ‘mega-ships’ of the future.

    A good example of the above can be seen with German shipping line Hamburg Süd which recently began introducing a new class of ship in the 6,000-TEU range. The first of these, Rio de la Plata made her grand entry into Durban on Friday (23 May) when she was greeted with tugs spraying water from their fire cannons and this was followed (so we understand – the media wasn’t invited), by a reception held on board the ship which was berthed temporarily at R berth (the car terminal).

    The 286m long and 40m wide Rio de la Plata is named for the estuary formed by two major South American rivers, Paraná and Uruguay, on which the two key ports of Buenos Aires and Montevideo are situated, and was named at the Korean shipyard on 17 March this year. She is the first in a new series of 5,900-TEU ships, becoming Hamburg Süd’s largest container vessel class.

    A total of six of these 80,455-DWT Rio-class ships will be introduced, initially on Hamburg Süd’s Far East – South Africa – South America service before transferring across to the company’s Europe – East Coast South America trades.

    That’s when the class of ships they are replacing on the Europe service, the 5,520-TEU ‘Monte’ class will move onto the Far East – South Africa – East Coast South America service (the cascade effect), bringing with them increased container capacity between Asia and South Africa.

    DAL and Safmarine agree to go separate ways

    After 11 years of co-operation in what was called the SAFDAL Joint Venture, both DAL Deutsche Afrika-Linien and Safmarine have mutually agreed to terminate the J/V as from 31 October 2008.

    As from that date each shipping line will market their own brands and will be represented in all European and southern Africa countries by their own agency organisations. Both DAL and Safmarine will continue as members of the SAECS (South Africa Europe Container Service) Vessel Sharing Agreement.

    DAL has long had its own people in South Africa but more recently established the DAL Agency southern Africa head office in Durban, with Shabu Joseph as Managing Director and Malte Kersten the DAL/John T Essberger Owners Representative.

    The address of DAL in SA Sharif House, 2 Sinemembe Crescent, La Lucia Ridge, Durban. Tel 031 570 7878.

    Lonrho appoints former Portnet CEO Sipho Nyawo to African board

    VAAL RIVER, one of the container ships in the SA Independent Liner Services (SAILS) container service operating between South Africa, West Africa and northern Europe, in which Lonrho has a considerable interest. Picture taken in Cape Town by Robert Ravensberg

    Lonrho Plc, the London-listed conglomerate with considerable and diverse investments in Africa has announced the establishment of a new company in South Africa, Lonrho Projects South Africa (Pty) Limited, to look into a number of major projects in which Lonrho is interested.

    The new company operates from Johannesburg and will undertake feasibility studies into the respective projects. Among them are

    * An oil terminal and port infrastructure development
    * A banking project
    * Development of a resort hotel
    * Regional aviation and airport opportunities.

    Appointed to the board of directors is Sipho Nyawo, whom readers may recall as the former chief executive of Portnet until late 1996. Nyawo has worked with the United Nations Centre for Regional Development, the Port Authority in New York and New Jersey, Portnet in several roles culminating as chief executive, Southern African Infrastructure Consulting Group (SAICOG), and as Government Commissioner in the KwaZulu Natal Provincial Commission for Planning and Development. Nyawo also has interests in property development.

    “Lonrho is undertaking in depth feasibility studies for several major new initiatives in South Africa. As part of this process, we are keen to utilise local skills and expertise whenever possible. Lonrho Projects South Africa (Pty) Limited brings local skills to the Board, and the potential for strategic BEE involvement in our proposed developments” said David Lenigas, Lonrho’s Executive Chairman.

    Lonrho investments in Africa include the following projects:

    Hotel Cardoso - www.hotelcardoso.co.mz
    Lonrho Mining - www.lonrhomining.com
    Luba Freeport - www.lubafreeport.com (the new freeport development in Freeport is a new deep water port and oilfield service logistics base currently under development on the west coast of the island of Bioko (Equatorial Guinea)
    Fly540 - www.fly540.com
    Swissta Holdings - www.swissta.com
    SA Independent Liner Services (SAILS) – container liner service
    Bytes and Pieces www.bytespieces.com
    Kwikbuild - www.e-kwikbuild.co.za
    LonZim - www.lonzim.co.uk

    Special Report: Economic growth - only way out of poverty

    By Shaun Benton (BuaNews)

    There is no way to lift the millions of the world's poorest people out of the ghetto of poverty other than through sustained economic growth, writes Shaun Benton.

    This according to a report, by an international group of leading economists, which was released in Cape Town, London, Cairo, New York and the Caribbean island state of St Kitts and Nevis on Wednesday.

    In Cape Town, Finance Minister Trevor Manuel presented the Report of the Commission on Growth and Development (CGD) to the media, along with leading economist Gobind Nankani, a Ghanaian who heads the Global Development Network.

    The CGD, a result of two years’ study on the requirements for “sustained and inclusive” economic growth for developing countries, is chaired by Michael Spence, one of two Nobel prize-winning economists on the commission.

    ‘The Growth Report - Strategies for Sustained Growth and Development’ sought to identify the key policy ingredients for long-term growth and development, in a report that was expected to be presented in New Delhi on Thursday.

    But reacting to the immediacy of issues such as fast-rising food prices, the report stated that policies supporting the growth of biofuels could be halted or even reversed should they be found to be a threat to food security.

    “Policies that favour biofuels over food can be reviewed and, if necessary, reversed,” the report stated, while calling for “prompt action to protect poorer people from price increases.”

    The report recommended a number of actions to combat food price rises over the longer term, “once the current emergency situation is dealt with,” according to a CGD media release on the report.

    The actions to contain steep food price increases include an end to export bans and “more effective safety nets and redistribution mechanisms” to protect the more vulnerable, as well as a revitalisation of infrastructure investment for agriculture.

    The issue of biofuels is one that has been receiving serious consideration in South Africa, with Deputy President Phumzile Mlambo-Ngcuka remarking recently that because South Africa had not yet fully entered into the production phase of biofuels, there was still time “to turn it around into food security.”

    In its 165-page report released on Wednesday, the CGD commissioners found that the reduction of poverty is “impossible” without economic growth.

    It also warned that malnutrition and reduced incomes “will reduce long-term growth prospects,” with Mr Manuel pointing out to reporters that economic expansion “is not an end goal but a necessary means to achieve growth.”

    A sustained and growing economy is a basic, fundamental prerequisite for lifting people out of poverty, with Mr Spence saying that it can “lift people en masse from poverty and drudgery.”

    Mr Manuel echoed this finding on Wednesday, saying that “no country has been able to lift people out of poverty in the absence of economic growth,” but pointedly adding that a perspective that sees economic growth simply as an end in itself is one that provided no direction forward.

    And another key element of the Report - which examined key basic “ingredients” for sustained growth, along with further development - is that a one-size-fits-all policy is unworkable.

    While some universal issues are obviously true, Mr Manuel said, he and Mr Nankani emphasised that a country’s economy had its particular idiosyncrasies that needed to be taken into account.

    This leads to a result where, in practice, argued Mr Nankani, policy-making by governments becomes a bit of an art, and that is had to be formulated in a country-specific, time-specific way.

    Another key feature of the Report is that in the more successful, high growth economies studied, none had governments where the ideas of free-market purists were overwhelmingly dominant, said Mr Manuel.

    And while the energies of a free market encouraged faster growth, “the state has a very important complementary role to play to markets,” said Mr Nankani, who is currently based in New Delhi, India.

    But a micro-economic analysis could never overlook the private sector’s process of creative destruction where companies expand or shrink in a process that brings an economic vigour fundamental to growth, the economist indicated.

    The evidence in the study, according to Professor Robert Solow, the other Nobel economic laureate on the commission - and quoted by the CGD - showed that “competition is absolutely essential at every stage of economic development.”

    Further to this, the study found, he said, that access to world markets is “very much a lesson for the rich countries as it is for developing countries, and that the more equitable the growth, the more sustainable it's likely to be.”

    Another key point was that of inclusion. Mr Nankin told reporters in Cape Town on Wednesday that growth has got to be inclusive or it’s never sustained, adding that the current economic climate in the world provided a historic, golden opportunity for resource rich, commodity-exporting African countries.

    Referring to the thesis of the ‘resource curse’ commonly used by economists from the basis of 20th-century experience of war-ravaged but resource-rich developing countries, Mr Nankin insisted that the ‘resource gift’ can be a blessing rather than a curse, particularly for commodity-exporting African countries.

    And while African countries needed to take a much bolder approach when taking advantage of global opportunities, inclusiveness - the mainstreaming and sharing of economic endeavour - needed to be significant in Africa and underpinned by education and the acquiring of skills.

    The study identified 13 countries that had experienced economic growth of more than seven per cent consistently over about 25 years, and queried how other developing countries could emulate them on top of the more obvious elements of for, instance, macroeconomic stability.

    This fiscal responsibility would see modest inflation in a policy environment orientated towards a high investment and high savings ratio which are ultimately essential to an improved quality of life for people, said the Finance Minister.

    The Report found that equality of opportunity and gender inclusiveness were necessary to bring the benefits of globalisation to those not yet actively participating, while drilling down to details around the core issue of education and skills.

    This probe found that, for instance, adequate nutrition among infants and children is crucial to the equalisation of opportunity, allowing children to benefit appropriately from educational systems and to then bring this capacity to the workplace.

    And labour had to be mobile, the economists found, as it dealt with an area of particular importance to South Africa, with its dual economy where the mainstream economy runs in parallel with what is often referred to as the ‘second economy’.

    This awkward duality is already being addressed by the Asgisa - the Accelerated and Shared Growth Initiative of South Africa - programme under way in South Africa.

    Dealing broadly with this question, the Report recommended a way of bridging the divide between the formal and informal labour sectors by allowing export-oriented industries to recruit workers on easier terms than those which prevail in the formal sector.

    However, this recruitment should come also with similar levels of worker protection in terms of safety and health and working hours. The Report also highlighted the need for countries - with all their various stakeholders - to better analyse the effects of changing demographics.

    These changing demographics are being marked by a rapidly urbanising world, with the rate of urbanisation - itself frequently unplanned - presenting a big, big challenge in the developing world, with governments needing to examine ways in which to get services into these dense locations, said Mr Manuel.

    This is a particularly pressing issue in the so-called ‘South’ - the developing world - where most of the largest cities in the world would be located by 2020, a high-level meeting of the India-Brazil-South Africa trilateral held in Cape Town earlier this month noted.

    At the same time it was noted that half the world's population is - as of this year - now living in cities, with urban slum dwellers now numbering over one billion people. – BuaNews

    Pic of the day – MAERSK BROOKLYN

    Click on image to enlarge – with some browsers click twice

    A fine view of the container ship MAERSK BROOKLYN (48,853-gt, 4,174-TEU) underway in Durban harbour on Saturday, 24 May 2008. The harbour tug at the container ship’s stern is MKHUZE. Picture by Trevor Jones

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