The inefficiencies of the Port of Durban and rail infrastructure are some of the questions raised by Sappi Limited during the inauguration of its factory by President Cyril Ramaphosa. The President attended the official opening of two multi-billion dollar investment projects on the KwaZulu-Natal coast, the R7 billion Sappi plant in Umkomaas and the new car plant in KwaDukuz.
The Chairman of Sappi Limited, Sir Nigel Rudd, briefed Ramaphosa on the challenges preventing the export of goods through the Port of Durban. He says inefficiencies in ports, as well as rail infrastructure, are costly and hinder the company’s growth.
“As an important user of rail services and one of the largest container exporters using the Port of Durban, we understand how South Africa is currently struggling with congested and inefficient ports, unreliable roads and road infrastructure. As we look forward to future investment decisions, the board will make those decisions based on economic considerations. We are sure that the government understands and appreciates the importance of solving these problems,” says Rad.
It comes after Sappi expanded its Umkomaas plant at a cost of 7 billion rand to meet growing global demand for soluble pulp, which is used in renewable textiles such as viscose. Sapi says the expansion of the Umkomaas plant has provided business opportunities for about 3,000 small-scale contractors, mostly from the region. The company’s chief executive officer (CEO) Steve Binney says Sappi mills also sources wood from small plantation owners in rural areas, mostly women.
“We get a large percentage of our raw wood requirements from our Hulis farmers, who number approximately 4,000, most of them rural women. More than 80 percent of the approximately 3,000 contractor positions on this project have gone to community members. In addition, the Saiccor factory has spent more than 220 million rand on local community initiatives, including a community skills centre. We contribute R60 billion a year to the KZN economy, both directly and indirectly,” Binney explains.
Meanwhile, the new Metair Hesto Harness plant has created 4,000 jobs in the largely rural Ilembe area. The plant produces electrical wiring assemblies for information transmission and power supply of vehicles. Toyota and Ford are among the car manufacturers that receive parts from the factory.
The wage fund of the plant contributes 30 million rubles to the local economy every month. For many factory workers, this is their first full-time job.
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“This is my first job opportunity and this is the first place I am currently working. It has been a very meaningful opportunity in my life, it has improved the way I provide for my family. Now I have six dependents, all thanks to Hesto,” says one employee.
“It really changed my life because where I come from, I’m a single parent. Yes, now I have children, I have a house and I live on my own, and it is so good to have my own money, it has changed a lot,” says another employee.
Meanwhile, Ramaphosa says great strides have been made in improving transport infrastructure, including the Port of Durban. However, much remains to be done to improve the efficiency of rail and road transport.
“All these issues will definitely be addressed because they are holding Sappi back from further growth. We have made progress in solving the problems related to our rail and port operations, but more needs to be done before Sappi can export its products. I was not pleased to hear that up to 75,000 tons sometimes remain in their warehouses, without space or facilities at our ports for export. So it comes down to the efficiency of our ports and that’s exactly what we want to focus on,” explains Ramaphosa.
Ramaphosa says the country is slowly recovering from the effects of the COVID-19 pandemic.