The Metal and Engineering Industry and Maritime Sector
The manufacturing sector is a vital cog in the exploitation of the maritime sector and the opportunities that it brings. Addressing delegates on the second day of the Annual Metal and Engineering Industry National Conference – a Summit on Job Creation, Sobantu Tilayi, Chief Operations Officer at the South African Maritime Safety Authority (SAMSA), explored in depth what these opportunities are and how they are vital to the Metal and Engineering Industries Bargaining Council’s (MEIBC) mission to create jobs. Tilayi’s presentation was titled, ‘Using Coastal Shipping to Support African Infrastructure Development and the Growth of the African Maritime Industry’.
Untold opportunities exist for exploitation, but the metal and engineering sector has thus far not taken advantage of these, according to Tilayi. The maritime sector on its own, particularly shipping, can play an important role in advancing Africa’s geo-economic and geostrategic interests. “Shipping is the
missing link in this regard, as it makes a case for the development of an african indigenous shipping tonnage on the back of Africa’s transportation and industrial support requirements.” But just what opportunities does the maritime sector, and especially shipping, present for the metal and engineering industry?
Africa as a totality offers development opportunities that cannot afford to be missed owing to its emergence as a fast-growing economy. The offshore oil and gas boom across the continent has resulted in a need for new and improved modes of transportation to move the necessary machinery to oil and gas sites. In addition, onshore energy activities are now being carried out on an unprecedented scale and require infrastructure such as the fabrication of structures. “Owing to its close proximity to exploration sites, the region is best positioned to provide logistics bases for this booming industry. I should point out that South Africa has had a head start in this regard with the facilities at the Cape Town and Saldanha ports, though they are not as fully developed as they should be at this point,” observes Tilayi. As gas exploration continues and discoveries are made on the East Coast of Africa, there will be a need for more support bases. The Southern Cape and KwaZulu-Natal offer various opportunities. Sunrise Energy estimates that more than 218 floating structures are required to support East Coast gas activities. Such are the opportunities for the metal and engineering industry.
As a developing economy, Africa is faced with huge infrastructure-development projects. While momentum has been steadily realised in recent years, Tilayi notes that more still needs to be done in this regard. “According to a UNCTAD [United Nations Conference on Trade and Development] 2012 Report, Africa requires infrastructure investment of at least 7% of its GDP [gross domestic product] in order to address the infrastructure backlogs. In any case, these projects require transportation of equipment into the region,” he reveals. He adds that, while this equipment largely does not originate from the region, there is scope for Africa’s involvement in the transportation chain in respect of the equipment. “Currently, most African countries import the equipment and, in some instances, this includes services – services that could be offered by African countries themselves.” This is to the detriment of local industry, he points out. South Africa has, however, undertaken numerous port development projects that require ship-to-shore cranes and other cargo-handling equipment.
Trade is an important part of a growing economy. It is especially important to Africa, as 91% of its trade is seaborne. “The maritime connectivity of African countries is largely determined by the amount of mineral resources they possess, leading to resource export-led urbanisation of Africa. This is a very unsustainable model,” notes Tilayi. It is therefore incumbent on landlocked countries to ensure development that allows access to international markets. This, in turn, is dependent on the performance of the network of maritime transport and logistics corridors, including ports and ships. In this context, Tilayi submits that the development of transport infrastructure has become a key enabler of, and catalyst for, the competitiveness and development of Africa’s economy.
Partnering for Job Creation
In striving for global competitiveness, the metal and engineering industry must, says Tilayi, work with a bias towards focused maritime industry development. This essentially means that the sector will have to explore the maritime sector on all fronts in order to be able to exploit the opportunities that exist in respect of shipbuilding, offshore industry support, and maritime skills development. “With regard to shipbuilding, there is a need for the continent to collaborate on shipbuilding capacity. Through its trade and strategic requirements, Africa has a substantial market for ships to support its shipbuilding industry,” says Tilayi, adding that the offshore industry has a considerable need for logistics support bases that require steelwork and fabrication.
“The booming offshore industry needs support that will contribute significantly to maritime industry activity and further enhance the expertise and capacity that the industry requires. On the other hand, there are vast opportunities in the skills development sphere. There is potential for skills development using already existing offshore operations in order to address the unemployment that has become a societal bane. For example, the industry can tap into areas of seafaring and general artisan work, which is where the MEIBC and the industry are ideally placed to make all the difference,” he explains.
From the onset, Tilayi has pointed out that the Council has a role to play in the bigger picture of job creation in its own industry as well as in the maritime sector. “The MEIBC’s strategic position provides an opportunity for the growth of the maritime industry using more South African services. There are several avenues that can be employed to achieve this end,” he says. This, he elaborates, could be through maritime skills development or maritime infrastructure development. At present, less than 20% of personnel who man offshore operations and support vessels are South African, and the manning of product transportation vessels along the South African coast is done largely by foreign nationals, and this at a time when the country has the capacity to do undertake this work. This is a situation that cannot be allowed to continue, he concludes.
CASE IN POINT | SAMSA
by Andrew Ngozo