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Ship-building needs government help to stay afloat

Limited docking, high port costs and inefficient operations

File photo.
File photo.

While the global maritime industry typically presents enormous opportunities for supplier development programmes, the SA maritime sector is shrinking and needs urgent interventions to stabilise and grow emerging businesses.

Enterprise supplier development (ESD) programmes in SA remain a legislative requirement for companies that take on government contracts, yet the blue economy still faces significant challenges – especially in the ship building and ship repair pillars. There is just not enough work in the local maritime sector to develop and sustain emerging ship builders and repairers. 

Ship building and repair encompass a wide range of specialised skills, including metal fabrication, marine electricians, mechanical fitters, carpenters, painters and riggers, among others.

During the building/repair cycle, not all these disciplines are needed at any one time. Unless workers can move to the next new build when work is completed, ship builders and their supplier stakeholders are forced to lay off workers which is disastrous for ESD companies.

Ship building requires costly infrastructure and skills investment, so the barrier to enter as a player is considerable. ESD programmes can enable new entrants to join the SA maritime fraternity, but new orders are key, whether for local or international clients.

Export, especially into the African market, has much potential. The oceans economy masterplan, an industry turnaround blueprint that is being completed, initiates SA government marketing the capacity to develop the local maritime sector. Success in this area will benefit ESD significantly.

Unfortunately, SA remains a very minor cog in the global ship building machine, building ships on a significantly smaller scale than countries such as Korea, China and Japan. While the local industry has over the years produced many vessels, building single order ships is inefficient and costly.

Government contracts are key to sustaining our ship building industry, as private demand is typically small. It is much cheaper for foreign vessel operators to buy a ship built in Vietnam or Korea, for example. Another challenge is that private clients are not obliged to support ESD.

The ship repair industry is not faring any better. While about 130,000 ships pass our coastline every year, we only attract a very small percentage of them into our ports, as SA remains an unattractive destination for ship repair mainly due to limited docking and repair infrastructure, high port costs and inefficient port operations.

SA’s dry dock facilities are very old and ongoing maintenance challenges and management inefficiencies result in less availability to the marine industry for commercial work.

With the current state of our maritime industry, it is difficult to develop proper and meaningful ESD programmes. As there is little work to sustain new entrants in this sector, developing small businesses under ESD initiatives is simply setting them up for failure, which is clearly the last thing we want to do.

For the maritime industry and ESD to grow, the cost drivers for shipbuilding locally should be reduced, allowing the industry to tap into the large maritime requirements in both Africa and South America. Indeed, privatisation of docking/ship lift facilities and improvement of port services would reduce cost.

Government should recognise and nurture shipyards who have successfully implemented ESD programmes to maintain sustainable maritime growth. 

Additionally, better protection of our waters and resources to tackle illegal fishing would result in greater quotas for local fishermen and the industry. The larger quotas would also allow more local fisherman and ESD to thrive. This could spill over into the requirements for building fishing vessels as most local fishing vessels are outdated and have inefficient equipment.

The local maritime industry needs interventions – including the privatisation of many of the functions performed by the state so it can be stabilised and grow. Only then can we implement ESD programmes to help small enterprises grow into sustainable maritime businesses.

• Moloi is HR and transformation manager, and Kamerman services & repairs manager at Damen Shipyards Cape Town

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