Industrial Policy highlights 2015-2016 Ship and Boat Building

The following highlights were published in the revised Industrial Policy Action Plan of South Africa yesterday:

Ship/boatbuilding and associated services industry

  • TNPA has identified projects valued at R16.8 billion to facilitate the growth of the local ship repair, ship building and oil and gas sectors. These include new capacity creation at ports of Saldanha Bay, Richards Bay and East London and a R30 million repair to its badly corroded outer caisson at Durban’s ageing dry dock.
  • Since the designation of working vessels  for local  procurement (60% local  content) and the issuance of  the instruction note by National Treasury, achievements have included the following:
    • Southern  African Shipyards is currently in the process of building 9 tugboats  as part of the ten of  R1.4 billion awarded by TNPA in 2014. The contract to date has created approximately 200 additional  jobs. More than 60  apprentice artisans are in training as well as three marine engineers.  More thanR700 million has  been earmarked for the Supplier Development Plan entered into between Southern African Shipyards and Transnet’s local  suppliers, employees and graduates.
    • Southey Holdings and Nautic Africa have invested R289.9 million and 63.4 million respectively; both investments having been approved under the 12i tax incentive.  It is expected that some 355 direct jobs will be created.
    • Veecraft was awarded a tender worth nearly R23 million to build workboat ferries for the Navy.
    • Smit Amandla Marine partnered with Damen Shipyards Cape Town to build two new vessels valued at R150 million which will carry out supply and support work for the De Beers Group’s offshore diamond mining activities in Port Nolloth. The vessels are part of the Smit Amandla Marine’s National Industrial Participation Programme (NIPP) obligations. Smit Amandla Marine was awarded a contract by PetroSA as part of project Ikhwezi. In anticipation of a NIP obligation arising out of this contract, it then signed a strategic partnership agreement with the dti and started identifying projects towards meeting its obligation. Smit Amandla won a contract from De Beers to provide it with services requiring two Shoal Buster Vessels for its offshore diamond operations. Smit Amandla had previously imported all its vessels, but in line with its NIP commitments it decided to contract a local shipbuilding company, Damen Shipyards, to build the vessels. This amounted to an investment of R150m in the local economy.

Efforts to rebuild SA’s capabilities in this sector are recent, but demonstrate what can be achieved in a short time span with the deployment of appropriate levers. These achievements and platforms place the sector in a strong positon for future growth, including with respect to export potential.

Veecraft

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