Ports, terminals and cross-border logistics group Grindrod is preparing to continue its Mozambique winning streak at Richards Bay port, where it was selected as the preferred bidder for constructing and managing a new container handling facility.
Grindrod has been operating three terminals at the Maputo port, where it has been experiencing an uninterrupted sequence of wins, aided by sluggish performance at SA ports that caused customers to bypass the Durban and Richards Bay ports.
Grindrod’s share price has risen more than 67% over the past year.
According to Grindrod’s latest market update, the port of Maputo achieved record volumes of 5.8-million tonnes in the five months to May 30, a 17% increase on the previous period.
This was despite a difficult operating climate and a cyclonic event that affected the functioning of its terminals in Mozambique, especially the dry-bulk terminals, which handled 6% less cargo at 4.6-million tonnes.
But security concern about the Red Sea resulted in a spike in container rates, and logistics was largely affected by lower container volume throughput.
The group said the pricing performance of commodities it handled at its port and terminals had been declining, with an average price reduction of 19% compared with 2023. But it said the price performance of manganese, copper, iron ore, and chrome ore was strong, up 2% on the previous period.
In SA, where the rebuilding of the conveyor belt connecting Grindrod’s Navitrade and Richards Bay port was completed, the Richards Bay conveyor belt, damaged by a fire, began functioning again in January, increasing the company’s handled volumes in SA 27% to 2.2-million tonnes in the five months.
Promote efficiency
SA ports have been beset by delays and broken equipment used to load and offload ships.
Transnet National Ports Authority (TNPA), which is responsible for the effective and efficient economic functioning of the national port system, named Grindrod as the preferred bidder in June for the development and operation of a container handling facility at the port of Richards Bay as part of its plans to promote increased port efficiency and service standards.
“With over 20 years of expertise in the container sector, Grindrod SA is ideally positioned to spearhead the development and operation of this facility, which is scheduled to become operational in 2027,” said TNPA acting CEO Phyllis Difeto. “The project entails an estimated capital investment of about R285m, offering a substantial boost to the region’s container industry.”
Grindrod helps run the Maputo port. The concession by the government was granted to Maputo Port Development Company, in which Grindrod holds a 24.7% share. Grindrod is a subconcessionaire in the dry bulk and car terminals in Maputo Port and the coal terminal in Matola. The company helps export and import motor vehicles as well as coal and heavy minerals such as chrome and bulk cargo.
The Mozambican government extended its concession to help run the port until 2058.
Grindrod is expected to draw on its Mozambique successes to lead the execution of the Richards Bay development, which will increase the port’s container handling capacity from 50,000 20ft equivalent units (TEUs) to 200,000 TEUs a year as per the ports master plan.
Locomotive fleet
The strategic location of the proposed container handling facility serves the northern parts of KwaZulu-Natal, providing vital proximity to the hinterland market. This positioning is expected to lower logistics costs and reduce transportation lead times, TNPA added in a statement.
The JSE-listed industrial transportation company told shareholders recently that the structural reorganisation of its rail division was almost completed. It said a fleet of 13 locomotives was being realigned for the Southern African Development Community (Sadc) rail business prospects after it mutually terminated an iron ore rail venture with a client in Sierra Leone.
Rowan Goeller, research analyst at Chronux, said Grindrod was in a good position, with growth potential and appealing port and terminal exposure.
“Rail is still significant to Grindrod. Its focus will be on borderless trains in landlocked countries, with a particular emphasis on the Democratic Republic of Congo,” said Goeller.
Grindrod has been collaborating with Transnet Freight Rail, Mozambique Ports and Railways (CFM), Zambia Railways, Eswatini Rail and the National Railway of Zimbabwe on initiatives to move cargo on trains.
This is expected to improve train turnaround times and benefit export customers, according to CEO Xolani Mbambo who has been advocating for the revamping of railways in Sadc.
Grindrod’s results are expected on or about August 23.
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