Reviewing the First Invest in Maritime South Africa Event, 27th September 2019, Waterfront Hotel, Durban, South Africa.

Dr Jack Dyer, jad@blueeconomyfuture.org.za; www.blueeconomyfuture.org.za.

The event focused on fit for purpose, market investable projects that can be potentially invested in, especially in the boatbuilding; small marinas; recreational and leisure equipment, tools, marine tourism and other blue economy sectors. Day One essentially launched the Annual General Meeting of the Maritime Business Forum of South Africa, initially created in November 2018. Day Two included the above program. The venue, hosted by the Department of Transport provided a complimentary copy of the Department of Transport’s 2017 Comprehensive Maritime Transport Policy and Maritime Review SA. It mentioned space for 250 participants but attendance was significantly less for the second day at 40-50 people but offered

certain networking opportunities. Transnet National Port Authority; Phenyo Logistics, South African Shipyards, EBH, SABBEX and Linsen Nambi Bunkerage Services were among the few exhibits present.

Maritime Review South Africa emphasized the challenges in relying upon a state-owned national port authority as a catalyst to develop South Africa’s ship repair sector, despite evident historic and emerging market demand along with opportunities for the local maritime industry supply chain. Transnet are several years behind on restoring and replacing ship repair facilities, assets and infrastructure such as capstans and repair cranes. Privatisation or alternative market provision of services by competitors is heavily emphasized. Emerging opportunities to capitalize upon include the fact that Cape Town’s recreational boatbuilding sector accelerated by 28.8% on average per year between 2012-2019. It is the second largest producer of catamarans after France globally. South Africa also faces a stagnant, declining and historically obsolete fishing vessel sector, needing recapitalization and investment as recognized by the South African Maritime Safety Association (SAMSA). Yet it has significant local experience with its existing maritime industry and 4 commercial shipyards. It has bunkerage services, experienced salvagers and historic repair; naval and recreational vessel experience; skills and training; specialised facilities including pipe bending capacity. The world’s first vessel propeller by 3D printing by the Netherlands headquarters of Damen Shipyards, with a local branch in Cape Town, offers chances from the 4 th Industrial Revolution for other specialised components of the future for South Africa and Africa to embrace and invest in.

Welcome and Introduction Acting DDG of Maritime Transport, Department of Transport

Two themes briefly raise include the “2019 Accelerating of CMTP process and “Empowering Women in the Maritime Community Dialogue.”

Not just talk shows but need meetings produce results. Aim for SA to be an international maritime centre of excellence -but now just to focus on serving maritime education and sector more. Aim by 2030. “How is it contributing to achieving this status? Need to put ourselves at service to international maritime industry. World expects nothing but excellence, perfection, efficiency and foresightedness. One of challenge to face to -desire be a shared one -work towards presenting to be one. South Africa must follow the International Maritime Centre offers A-Z of infrastructure and services following the example of Singapore. Global celebration of World Maritime Day yesterday. Decolonising the maritime sector means simply writing our own maritime history and be humbled by being the writers of that history -installing a united leadership of the maritime sector. SAMBF recognises ultimate objective of united voice of the maritime sector. Need to sell brand to local and international community as an offering to the world. Simple to make slogans -need to integrate with clusters and associations and engage government.

Introduce leadership of SAMBF. One to represent women Dlamini; Wiseman Mthethwa chair; Bhekazulu -deputy chair; Lusandon Ntuli -drive youth to the maritime space -grow it; Musa -director for transformation -barriers to get into business must decolonise; Moniswa Mhlanga -SG -secretary general; Trevor Wilson -treasurer; Objectives of CMTP lead to formation of SAMBF -voice for industry not government. How do you unify those with different, conflicting interests? Need to engage and represent the country foremost and industry to send. Perception of choice -transformation as negative but apparent intention is to expand the ocean economy and learn from each other. For youth, women and those with vulnerable groups. Issue off ringfencing certain opportunities for vulnerable groups. Who are the real beneficiaries of government investment and expenditure for procurement? Misperception over lacking in skills. Issue of Singapore -invest in people.

Issue of locals disrupt projects -need to deal with those who are marginalised by being inclusive. Issue of training -give them tools to represent the nation. Unusual for a port authority to be based in a city with no port – relocate to Durban. Yesterday South Korea point out shipbuilding can build nation but government

doesn’t assist. Pay tariffs for steel to fix international vessels. Challenge for maritime related investment historically in South Africa. South African territorial waters are 4 times size of the landmass -to benefit locals; ensure they are protected -the fisheries.

TNPA Presentation on Operation Phakisa 3 Foot Plan Status of Implementation

Captain Rufus Lekala -Acting Chief Operating Officer; Jackie Brown, Jacob -Ricky Bharaj;

The 150 year old South African national port monopoly influences procurement and dependent supply chains for 9 commercial ports; 16 cargo terminal operations; 3,800 km of pipelines; 20,500 kilometres of rail; > 200 million tons of cargo on rail; > 18 billion litres of fuel’ > 4.3 million TEU’s per year. Port specialisation; demands for transformation and inclusivity. Cannot just focus on the port limits and boundaries but extend to poor communities down railway lines and around ports now demand a stake. Future core objectives include reduce traffic density; externalities of excess road cargo; Need for increased maritime connectivity; A high performing core transport network in the region that will enable inter-regional trade. A low carbon, energy efficient freight system to address volatility of oil price as another core objective, yet the frequency of trains and proportion of cargo served by rail has radically decreased since the late 1980’s. Another aim includes the ability to create capacity ahead of demand. Targeted skills development with unrealistic aspirations need to be managed including embracing the 4 th Industrial Revolution and need for reskilling existing and future workforces to remain competitive and relevant. Issue of consequences -51% local -of people who cannot really participate in that level presents the issue of transformation. Question of transformation been raised in 2006 -What is new for a developmental state.

Question of capacity within SA ports -specialised comparative and competitive advantage of each port. Raising of Richard’s Bay for a new dock facility. Transnet will scrap the existing floating dock (23 metres beam; 109 metre length and 4,500 ton lifting capacity and replace it. TNPA claim to invest R4.7 billion in repair facilities -currently others use East London rather than issues over Durban’s graving dock facilities for minor vessels. This provides opportunities for specialised skills in artisan and engineer training. Projects to develop an offshore oil and gas/marine manufacturing hub in Saldanha Bay -Expected R10,4 billion for 3 projects and 3200 jobs. Ai for a Mossgas Jetty Marine Manufacturing Facility. Constraint -most oil rigs are too deep to use the facility; Berth 205 does not yet exist -Not feasible without the Industrial Development Zone incentives, partnership and development funding on tender April 2020. TNPA awarded concession for offshore supply base. TNPA using local woman operated oil company Simona Oil in partnership with French. Transnet have upgraded the berth -removed funding constraint on concessionaire. Issue of de-risking investments with empowerment.

Second project of Richard’s Bay Floating Dock currently under feasibility study; channel dredging; de-risk; berth strengthening and bulk landside infrastructure. Looking for concession in March 2020 for approach to market. Seeking estimated investment of R1.35 billion and to create a potential 240 jobs. Need to serve Post-Panamax vessel to enter it. Need for private sector. Need for East London Marine manufacturing cluster at port of East London -reliant on capitalisation of fishing vessels. Aim to create sustainable capacity for ship recycling and marine manufacturing services whilst resolving issues of uncertainty of port leases for local stakeholders. Potential to create 80 jobs. Various ship repair facility equipment under Initiative 5 of Operation Phakisa.

TNPA on Cruise Terminals -KZN Cruise Terminal Pty Ltd (Africa Amandla and MSC) to commit R250 million for 18-20 month period and Cape Town V and A Waterfront Holdings Pty to invest R170 million for a multipurpose-terminal fully operational for the cruise season at E Berth. It offers conference facilities, shops, offices and a restaurant. Global cruise industry of 24 million passengers and $260 billion. All ports other than Saldanha are suitable for cruise vessels. Currently 37 cruises call in yearly, it will increase to 100 needing 2 dedicated berths occurring simultaneously for Cape Town. From Durban it is currently 60, projected to increase to 70-80 cruises per year. Ned to be receptive to foreigners and enable exposure of young people to the sea and maritime sector i.e. embarking on a vessel and package holidays.

Opportunities for children to marine environment. SA Tourism project high growth to nearly 1000,000 passengers by 2025.

Question about whether TTNPA are serious to transformation and businesses they have created and sustained. Proposal for TNPA have a monthly meeting with the maritime industry sector. Issue with Jackie dredger as a local Transnet project as an alternative. Response of Transnet to consider it was not intention for a QA session but seek enquiries for other invited business. If expectation for TNPA to create instant millionaires -issue of governance and controls Challenge of how to support upcoming industries with no demand and issue with cash injections? BRICS seeking investment partners for bankable business case -procurements. Buffalo City Maritime Cluster -TNPA East London proposed engagement. Port has a Port Consultative Committee occurring quarterly exists -expand definition of port user and transformation. DTI Support to Marine Manufacturing -Not held

IDC Financing Maritime Projects Ndo Njoko

IDC focusing on high impact value chains and sectors such as automotive and transport equipment with industrial infrastructure. It mentions industrial infrastructure focus areas including logistics, land and marine. It excludes shipping and airlines. It wishes to focus on building and repair of vessels, rail and aircraft along with the building and repair of pleasure/sporting boats. People involved in tenders for TNPA can approach IDC fund from R1 million to R1 billion per project. IDC wish to support feasibility funding in shipyards, shipbuilding and repair facilities in working capital, equity, guarantees and project/corporate finance;

Maritime Industry Challenges

Small local industry with limited number of players

High capital investment requirements

Limited transformation, which presents an opportunity

No market funding support for luxury yacht/ work boat builders to market their products internationally

Limited government support for local procurement and in terms of providing incentives

Long term funding requirement mostly patient capital. The IDC charge 4% for interest lower than many commercial banks.

Case Study: Linsen Nambi -Women in Oil and Energy South Africa

This provides an example of the first SA black women, youth owned bunkerage services acquiring Grindrod bunkerage services which operates 3 modern bunker tankers in Durban and Cape Town ports The company was contracted to BP, Engen and Chevron and employs 110 people. It exposes youth and women (1000 WOESA members potentially) to skills in the maritime industry. The aim is for transformation as a catalyst to stimulate and invest in a more viable long-term South African marine industry focusing on female emancipation and inclusivity.

After Tea Presentations

Issue of events in silos raised -need people of industry as programme directors. SABBEX notes 95% of boatbuilding industry is exported to the Caribbean and Europe/USA. Pressure to maintain and grow the number 2 position. Local conditions -climate advantage to enhance more resilient sector. Third largest individual boat builder in world -200 per year based in Cape Town. Mention traditional passion, for ocean skills. Three key areas to maintain position; transform and to grow. SABBEX undertook study Cape Ocean Sports economy as growing area -need specialised skills and jobs -with first aid; engines. International Boating yacht -15 page on SA industry -R1.5 million exposure.

25 Metre Expedition Catamaran SABBEX Bruce Tedder

Project on Ocean Adventurer 2 -Moving Sushi and National Geographic expedition, support for 10 day ocean race from Mozambique to Madagascar. Prototype 23 metre, under 220 ton catamaran R37 million to serve demand for research capabilities.

Airscape Kite Manufacture -SABBEX Bruce Tedder

Kite surfing kites, foil wings; wing -Kite boarding without strings; precision workmanship -Airscape inflatable technology. Staff own machinery -they lease it. Kiteboarding is an Olympic sport and sole manufacturer for Ullman Kiteboarding International. It recycles from sail rejects as offcuts 40-50 pieces. Possibility to export to African continent with geographic proximity and competitive advantages.

Mountain Marine/Interceptor and Pilot Boat. Alf Tinker.

Aluminium custom boat builders -prototype first is a diesel powered12 m interceptor for in shore and harbour patrol and 15 metre pilot boat -more advanced, smaller vessels with advanced electronics and propulsion systems. Cape Town port are looking for a security vessel. Possibility of 400 odd ports for pilot boats. Looking for funding in sales and marketing. Movement towards sustainability and end of lifecycle -20-30% of energy of aluminium used inn creation is needed for lifespan; lighter material; more corrosive resilience than steel -lower maintenance and lifecycle costs. Offer empowerment via job creation and training including future chances for apprenticeships and Ship Constructor and naval architect partnership with local producers. Opportunity for import substitution and benefit for lifecycle maintenance Looing for R5-7 million -got hull involved looking for propulsion.

Ocean Sports Academy -Vanessa Davidson

Need for boat races and linking ocean sports to cities -trans-ocean yacht racing. Volvo Ocean Race -Cape Town as host -8 entrants, multi-stopover; bringing tourism, industry -boat building, repairs, equipment, safety, crew, training and provisioning -Durban could bid, PE, East London for 44 countries, media for 3-4 weeks, international sailors and awareness. Cape Town invest R10 million for R400-R500 million -tourism, workshops etc. Cape to Rio race -Royal Cape Yacht Club 2020 since 1971 30+ entries, crew of 8 -extensive media coverage and possible BRICS contacts.

House Boat Manufacture SABBEX Bruce Tedder

Leisure Liner -4-6 people to recapitalise SA houseboat industry in SA; Option to build a new boat for local and export market.

House Boat Operation SABBEX Bruce Tedder

V and A Waterfront Houseboats -opportunity to buy 50% for R5 million in 4 houseboats -trip to Granger Bay. Key is concession or usage rights for SANPARKS; Transnet, DPW etc.High performance block and pulley need R1-R 1.5 million investment needed with proof of concept; opportunities for import substitution; Cutting edge, export ready, Need investment for expansion and marketing opportunities to Europe.

Floating Hotel Jackie O SABBEX Bruce Tedder

Boutique yacht moored for 50% equity for transformation; operating for 3-4 years for R7.5 million opportunity for shareholders, event. No chef onboard -only boutique and functions venue in V and A. 128% over 5 years.

An audience question whether the opportunity to include smaller equity investments for shareholders could be extended to South Africa. One cited example involved fractional ownership in Caribbean -timeshare -for $1 million in local minor equity investments received $3 million in exchange. Boat used as hotel for interests something new for IDC and DBSA to consider with business case

DRACO/Sailing Hardware SABBEX Bruce Tedder

Investment Opportunities in Boatbuilding -new boat molds, tooling and demo boats. -get a royalty in exchange. Robertson and Cane 5-6 model range to last for only a 5 year range 100-150 boats per model. Or the alternative investment opportunity is to fund and acquire the demo model of new boat at cost model -personal use, charter income to sell for profit at international boat show. 8-9% return. Issue of brokerage fee. R10-15 million needed for initial stage including naval architect and designer, construction of model for

60 feet 12 people. Largest recreational boatbuilder in the world produces 700 per year. High demand for charter companies. 25 Bahama catamarans destroyed -lack capacity.

Stock Boat programme; Vanessa Davidson

No presentation held.

Cape Town International Boat Show -2020 16-17 October 2019; Durban

Global Aviation and Maritime Lifestyle Show 8-17 May 2020 Phindani Nene.

Various social philanthropy projects including increased maritime schools from 3 to 16 and 27 in the future. 150 black jetski riders to Richard’s Bay. Focusing on event expansion. Blue Train will move to Durban. Consider the ship as a floating mall. Promote it as an alternative. Consider the maritime clothing and safety gear as an opportunity for the fashion sector. But they need to envision fashion in action -partnership with Top Billing, African Fashion International and Nautical Channel -broadcast Ocean Volvo for 44 countries in South America, Europe, Australia, New Zealand and USA with 6 languages. People to see fishing boats, yacht, jet skis, SA Air Force, Emirates, SAA, British Airways, TNPA, DOT, IDC, Navy in action.

New Surf Rescue Craft Manufacture; SABBEX Bruce Tedder

Broad Based Black Economic Empowerment (Africa) Yacht Brokerage; SABBEX Bruce Tedder

Looking to transform the opportunity from ski boat to luxury yacht and catamaran with knowledge transfer -very personal, people based, lifestyle approach being selling -very bespoke, marketing, branding and technical aspects -how to drive, operate and sail with it -R 10 million and best investments of it; international standards, warranties and astute financial mind -demonstrate to owners; pre-owned as well as

local. More South Africans need to own boats. Many existing boats for sale but need requisite skills in engineering, ocean love and being creative as core skills.

Ferry Project on Lake Victoria Uganda.

Ambrose Park Oil Terminal

No presentation given