MoU strengthens local shipbuilding industry

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The Memorandum of Understanding signed between Southern African Shipyards (SAS) and the China Shipbuilding and Trading Company (CSTC) will bring competitiveness and efficiency into South Africa with benefits to the shipbuilding supply chain, according to Prasheen Maharaj, CEO of SAS.

Maharaj told defenceWeb that China has become a world leader in shipbuilding and has captured a large chunk of the market through pricing and efficiency and that SAS would like to apply that competitiveness into the local economy so South Africa can become a globally competitive player. As a result, the MoU, which became effective at the end of March, mainly covers technology and skills transfer and will see SAS source equipment and supplies from China. Southern African Shipyards has also identified personnel to travel to China and learn best practices.

In addition to the transfer of technology, skills and competitiveness, Maharaj said that Southern African Shipyards can market CSTC’s large ships in Africa. These will mostly be commercial vessels, while SAS will offer its own smaller vessels to potential clients. “The Chinese want to push and develop the African market,” he said.
“In terms of the MoU, SAS and CSTC have committed to building a collaborative institutional relationship where we share our experience and expertise, particularly around potential projects which fall under Operation Phakisa,” said Maharaj.

Operation Phakisa was launched by President Jacob Zuma in 2014. One of its two key focus areas is to develop South Africa’s maritime economy in sectors such as marine transport and manufacturing and offshore oil and gas. It includes the expansion of South African port capacity for repair work for oil ships and oil rigs.

One of the projects the MoU with CSTC is targeting is the R12 billion Saldanha Bay oil and gas hub, which aims to cater for the South African and West African oil and gas markets. Transnet as the custodian of the project aims to have construction underway by 2017/18. For this endeavour, SAS and CSTC are looking to form a joint venture to bring Chinese shipyard building expertise in the design and construction of the rig repair and oil services hub. Maharaj said SAS and CSTC would mainly project manage something like this. SAS and CSTC are also eying a ship repair hub in Richard’s Bay that aims to add floating docks and other facilities.



Maharaj said that 17 000 unique vessels pass through South African waters every year and that it is possible to capture a large part of that maintenance, repair and refurbishment market. At the moment South Africa is not known as a major destination for such work but Southern African Shipyards, as the largest shipyard in Southern Africa, aims to change this.