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A PERSPECTIVE ON PROJECTED LOCAL MARKET AND AFRICA’S
VESSEL REQUIREMENTS
GREG DAVIDSof
USG ADVISORY SERVICES, SOUTH AFRICA
BY
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
AFRICA: MACRO OVERVIEW Number of Countries: 53Population: 1,166 billion (2015)Middle class population: 313 million (fastest growing)Working class population: 500 millionMade up of 5 Regions: North Africa, East Africa, West Africa, Southern Africa and Central Africa
Number of Ports in Africa: 421 (small, medium and major included)
GDP: $5.486 trillion (2014).
Total Exports: USD 552 billion (2014)
Total Imports: USD 616,8 billion (2014)
Growth Forecast
Sub-Saharan Africa’s economy looks to a grow with a
solid 4.5-5.5 % from 2015 to 2020. However, this is on
the lower spectrum due to the recent sharp decline in
the oil market prices.
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
Macro-Economics
According to IMF, 7 out of 10 fastest growing economies are in Africa.
The average GDP growth is above 5% annually driven by factors as:
Demographic growth.
Natural resources.
Public investments into infrastructure expansions.
Presence of foreign countries and companies as customer and investors.
Key drivers for the local maritime market
Oil and Gas exploration.
Infrastructures developments in ports and terminals.
Fleet renewals (Navy, Coast Guard, Fishing etc).
GROWTH AND KEY DRIVERS
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
The continent has a young population with agrowing labour force – a highly valuable asset inan ageing world.
Africa is still urbanizing and much of theeconomic benefit lies ahead.
Companies need to gather detailed marketintelligence on where the most promisingconsumer markets are.
African economies are well positioned to benefitfrom rapidly accelerating technological changethat can unlock growth and leapfrog thelimitations and costs of physical infrastructure inimportant areas of the economy.
East Africa is already a global leader in mobilepayments.
Reinforcing the positive outlook for growth is acontinuing rise in infrastructure investment.
TRENDS FOR AFRICA’S FUTURE
In 2034, Africa is expected to have the world’slargest working-age population of 1.1 billion.
21 million new stable (formal, wage-paying)jobs over the past five years and 53 million jobsover the past 15 years.
Stable jobs grew at a rate of 3.8% between2000 and 2015, 1% faster than growth in thelabour force.
Africa’s consumers will spend $2 trillion by2025.
75 cities accounted for 44% of totalconsumption in 2015.
Penetration of smart phones is expected to hitat least the 50% mark in 2020.
Source: World Economic Forum 2016
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
KEY FACTS OF AFRICAN MARITIME
• Tugs, cargo vessels and offshore units have been ordered
from African shipyards since 2010.
• Egypt delivered 203 vessels (mostly tugs) between 2010 and
2015.
• Egyptian Timsah S.Y has the largest fleet of 62 vessels (56 in
operation and 6 under construction).
• The majority of the African vessels delivered to Egyptian and
South African owners.
• The largest OB (9 tugs) in 2015 held by Southern African
shipyards.
• Transnet has the largest OB at African shipyards (9 tugs).
• Rescue and salvage vessels form the largest portion of all
types of vessels that have been produced in African
countries.
Egypt
60 %
South Africa
25 %
Angola
5 %
Nigeria
5 %Other
5 %
Builder countries
Contains
many small
vessel
typically
with
high-speed
engines
and small
FPPs
0
5
10
15
20
200
0
200
1
200
2
200
3
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
# o
f ve
sse
ls
Contracting for African builders
Ferries General cargo Mobile drilling
Mooring Other cargo PSV/Supply
Rescue & Salvage Ro-Ro Specials
Tankers
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
AGE PROFILES OF AFRICAN OWNED VESSELS
Source: Clarkson
• Offshore vessels in general +30 years old although newer PSV/supply vessels also in fleet
• A large proportion of tugs above 30 years old
0
5
10
15
20
25
30
0 4 8
12
16
20
24
28
32
36
40
44
48
52
56
60
64
72
89
Tugs
0
5
10
15
20
25
30
35
0 2 4 6 8
13
17
19
22
28
30
32
34
36
38
40
42
44
46
50
AHTS
0
2
4
6
8
10
12
14
16
18
0 2 4 6
12
14
16
18
21
24
26
29
31
33
35
37
39
41
43
46
49
PSV/Supply
0
2
4
6
8
10
12
14
3 9
13
22
28
31
34
38
41
44
47
50
53
57
60
65
100
General cargo
0
5
10
15
20
25
1 4 7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
55
71
Tankers
0
1
2
3
4
5
6
7
8
9
10
0 3 6 9
12
15
18
21
25
28
31
35
39
42
46
49
52
58
Ferries
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
THE SOUTH AFRICAN FISHING INDUSTRY VESSEL AGE PROFILE
Sector No vessels Average vessel years
SCRL 7 60
WCRL (offshore) 405 33
KZN prawn trawl 8 40
Hake longline 75 33
Horse mackerel 5 32
Large pelagic 16 31
Tuna pole 128 31
Patagonian toothfish 2 29
Small pelagic 57 29
Hake inshore trawl 18 26
Hake deepsea trawl 60 26
Dermesal shark 4 20
Abalone 86 18
Squid 125 15
WCRL (nearshore) 314 16
Hake handline 74 15
Linefish 312 15
Net fisheries 68 15
KZN sardine beach seine 18 13
TOTAL ACTIVE VESSELS = 1 445
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
FLEET COMPOSITION
0 50 100 150 200 250
Mauritius
Tunisia
Tanzania
Morocco
Angola
Libya
Algeria
South Africa
Egypt
Nigeria
Bulkers
Containerships
Ferries
LNG
LPG
Offshore
Other Merchant
Ro-Ro
Specials
Tankers
Source: Clarkson
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
SHIP BUILDERS IN AFRICA
Egypt
48 %
South Africa
15 %
Unknown
10 %
United States
4 %
Nigeria
3 %
Other
20 %
Owner countries
0 10 20 30 40 50 60 70
Suez Canal
Sorefame
Egyptian S.B.
Arab Contr.
Canal Naval
Southern African
Port Said Eng. Wrks.
Dorbyl Marine
Alexandria S.Y.
Timsah S.B.
Top 10 builders
Fleet Orderbook
0 10 20 30 40 50 60
Egyptian Govt.
Egyptian Marine
Timsah S.B. Co
Bourbon
Alexandria Port
Egypt Govt Maritime
Portnet Dredging
Transnet
Unknown
Suez Canal Authority
Top 10 owners
Fleet Orderbook
Source: ClarksonMARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
INVESTING IN BLUE
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
OVERVIEW OF OPERATION PHAKISA
• Unlocking the Economic Potential of South Africa’s Oceans by focusing on four priority potential growth areas:• Marine transport and manufacturing.• Offshore oil and gas exploration.• Aquaculture and marine protection services and • Ocean governance.
• Represents a fundamental change in how we accelerate delivery – it is the first of many ‘business unusual’ initiatives that government will implement.
• Expected to increase the Ocean Economy’s GDP contribution by >R20 billion, and lead to the creation of 22 000 direct new jobs by 2019.
• Delivery of these initiatives are supported by multiple leaders including the President and Cabinet, the Minister in the Presidency, Department of Planning, Monitoring and Evaluation’s Operation Phakisa Delivery Unit, Lead Ministers for each lab, and specific initiative owners identified in detailed 3-ft delivery plans.
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
SOUTH AFRICAN CHALLENGES• Current fleet not meeting current needs.
• Vessels not built for specific African sea conditions.
• Maritime related scarce skills.
• Lack of training vessels for national cadet training programme.
• Lack of national shipbuilding capability.
• Lack of dry docking facilities for larger vessels.
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER
2016
OPPORTUNITIES• Substantial opportunity exists for research partnerships, academic
exchange and infrastructure investment financing.
• South Africa is the primary conduit for entry into Africa's blue
economy.
• Build ships in Africa for Africa.• International technology partnerships.
• Shipyard grant programme.
• Type of vessels required: Scientific, cadet training, OPV, IPV, OSV, PSV,
hydrographic, frigates, patrol, survey, cable laying, tugs, fishing.
• Develop, then commercialise the science.
• Shipbuilding and repairing: Strong driver - economic growth.
• Socioeconomic benefits – GDP, employment, skills development.
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
OPPORTUNITY MATRIXVesseltype Organisation Size Steeel
requirements
Scientific research
vessels(2)
OPV(2)
IPV
DAFF
DAFF/EnvironmentalAffairs
DAFF
1x18m
1x60m
2x80m
3x40m
1600ton
1200ton
2x1200ton
3x1500ton
Navyvessels:IPV(3)OPV(3)
Frigats(4)
HydrographicResearchVessel(1)
DOD
3x40m3x80m
4x100m
1x100m
3x500ton3x1200ton
4x1400ton
1x1000ton
Fishingvessels:
Recapitalisation(20)
Fishingindustry
20x15m
20x300ton
CableLayingVessels(3) DepartmentofTransport 3x110m 3x2500ton
Oil/Gas:OSV(4)PSV(4)
OilandGasIndustry 4x80m4x60m
4x1600ton4x1200ton
HarboursTugs(10) TNPA 10x40m 10x400tonPollution ControlVessels(4)
DEA 4x40m 4x330ton
SearchandRescueTugs(2)
SAMSA 2x80m
2x1600ton
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016
CONCLUSION
• Industry led maritime cluster.
• Enabling legislation and incentives.
• Diversify – new emerging blue economies.
• Contributor to labour income and GDP.
• Design and build ships for African sea-going conditions.
• USG advisory Services is strategically positioned to advise
on technical, research and financing investment for South
Africa’s blue economy.
MARITIME BUSINESS OPPORTUNITIES DAY, HELSINKI 24 NOVEMBER 2016