Date: 26/09/2007
Source: Transnet
Title: SA: Ramos: 2007 Exporter of the year awards

Good evening ladies and gentlemen,

At the outset, let me thank the chamber for inviting me to address you. We are proud members of the Durban Chamber of Commerce and as such I was determined to make our presence felt.
We have a rather close association with the Exporter of the Year awards. Over the past few years, we have sponsored the KZN awards. We remain committed and look forward to sustaining and growing our involvement with the chamber.
Let me take the opportunity to congratulate all of tonight's winners.
South Africa has always been a trading nation, and nothing represents that better than this wonderful city. Durban's link to the sea has formed a crucial part of South Africa's place in the network of international trade; the network which has underpinned our economy in good times and bad ones. The city's prosperity and growth is intimately linked with its status as South Africa's - in fact Africa's - largest container port, and one of the busiest in the world.
The port of Durban handles approximately 66% of all containers imported or exported through South Africa's ports indicating its dominance in this segment and its importance to the economy as a whole. On the manufacturing sector, especially on the vehicle exports and imports, Durban is playing a pivotal role on both the dry and the liquid bulk sides.
The past 15 years have seen Durban's position reaffirmed, despite several other large port projects and the creation of specialised ports like Richards Bay, which perform their own specialist functions so effectively.

Yet despite - or perhaps because of - the unchanging importance of Durban, we are constantly in change mode, as a company, as a chamber and as a city. We cannot rest on any laurels but must continue to build and defend our future dominance on a healthy and competitive footing-with all the well-known spin-offs for our economy. The changing nature of the Port of Durban, the emblem of the port system in this country, reflects both the changing nature of trade internationally and the changing nature of South Africa's economy. We have a duty to keep up.

In the last few years, for example, our port system has experienced exponential growth in volumes. Increasingly, these volumes of freight are being handled in containers and indications are that the migration of break bulk into containers will continue into the future. It is now believed that as much as 90% of world freight moves in these boxes called containers. To illustrate this growth, Port Terminals' container sector handled 3.4 million TEUs in the year to March 2007, representing a 13% increase on prior year's numbers.

In addition, South Africa's manufacturing sector, especially in the automotive field, has seen large volumes of fully built units being imported and exported through the port system.
Vehicle volumes are such a success story that during the same period, Port Terminals' automotive sector handled 558 218 units - a figure that reflected an 18% increase on the comparable period a year earlier.
One of the reasons why Durban managed to maintain its eminence despite competition is two-fold: first, its own innovations and second, the extraordinary increase in trade following the end of apartheid. You could call it Durban's peace dividend. And what a dividend it has turned out to be! - stretching the outer limits of our imagination, never mind our ability to plan and implement.
Allow me to just share with you some of our recent service improvements. These include:
o a new record of 6,700 containers handled in a single day at DCT (two years ago we were averaging 3,500 containers a day)
o the car terminal today handles 120 vehicles an hour and gets vessels out in 12 hours
o Richards Bay loading rates for ferros often exceed 200 tons an hour - performance levels which please our customers
According to the SA Revenue Service (Sars), South Africa's total exports amounted to around R100 billion in 1994. Between then and last year, they have just about quadrupled to just under R400 billion in 2006.
But the crucial consequence of this sea-change has been an overall increase in trade's role in the South African economy as a whole. In the early 1990's, trade constituted 21% of GDP, and this has now gone up to about 27% of GDP. This is by no means insignificant in a country where trade has always been a big part of our lives.

This string of good news is bringing its own pressures on our infrastructure. Again, let me use Durban to illustrate a practical problem and a solution for our country today. Two are worth mentioning: first, capacity; and second, congestion.
o Vessels still wait to get into the port of Durban,
§ However, we are developing capacity to deal with growing demand and to allow us to provide "catch-up" capability for weather and other reasons behind the delays
§ A new 720,000 TEU terminal at Pier 1 has begun operations and will be fully operational by December this year. The terminal will relieve pressure on DCT
o Road congestion and delays in getting into DCT are a real concern
§ However, better integration between Transnet National Ports Authority (formerly the NPA) and Port Terminals has resulted in projects to develop truck staging areas, automated gate systems and road access improvements
§ We are working closely with the City to resolve the situation regarding the truck congestion.
To support future growth in trade, we are investing R78 billion in creating more capacity. The plans include:
v Widening and deepening the entrance channel in Durban to enable future growth (R3 billion)
v Resurfacing Pier 1 and deepening the berth to create more capacity
v We are increasing the parking capacity in the car terminal from 10 000 bays to 14 000 bays
v We are building a new multi-product pipeline from KZN to Gauteng. The latest estimate of the pipeline is R11 billion.
v We are investing R8 billion in building a new port in Port Elizabeth, the Port of Ngqura
v We're buying 404 new locomotives primarily for our general freight business
South Africa's overall reliance on trade as a key component of our economy really forms the basis of Transnet's business and our reason for being.
We aim to be a key facilitator in this process, and we believe that if we do our job properly, we can provide not only a return for our shareholder, but also a key competitive advantage for the economy as a whole.
Underpinning the rollout of our investment programme are two strategic goals: first, to address existing customers' demands and to create appropriate capacity ahead of demand; and second, to continuously reengineer the business to make it more efficient, customer-oriented and to position it to offer a much more integrated portfolio of services.
The challenges I have just outlined cannot be tackled by Transnet alone. They require a range of partnerships. Internally, we have strengthened this collaboration. Increasingly, your interfaces with us will be with cross-functional and multi-divisional teams instead of fragmented and individual ones. This was what some of you told us in research. We have heard you.

Externally, we will continue to work on improving our very significant relationship with the Durban Chamber of Commerce and Industry and all its members.

Importantly, we will work tirelessly with the Cities of eThekwini and Richards Bay in KwaZulu Natal to coordinate our approaches for developing capacity in our ports to address today's needs and ahead of future demand. We will also work with these authorities to ensure efficient access in and out of these ports. The chamber has a vital role to play in this.

Transnet will implement corridor plans to ensure that we have the capacity that our exporters and importers require to make their companies succeed globally.
Again, let me thank you one more time for inviting me and congratulations to all the winners.

I thank you.