Global reach for local shipyard

June 8, 2016

 

Being part of an international shipbuilding group has given Damen Shipyards Cape Town (DSCT) the leverage to work in markets not only in Africa but other continents as well, to the benefit of the local shipbuilding sector.

This is according to Sam Montsi, Chairman of DSCT, which has exported vessels to Tanzania, Nigeria, Kenya, Angola, Djibouti and Venezuela, amongst others. “This is made possible by our relationship with the Damen group,” Montsi told defenceWeb. 

The South African shipyard mostly exports civil vessels and is focussing mainly on infrastructure support vessels. DSCT has just delivered a second Shoalbuster 3009 to Smit Amandla Marine, which will carry out supply and support work for the De Beers Group’s offshore diamond mining activities out of Port Nolloth in the Northern Cape. The first vessel, named Aukwatowa, was delivered last year and the second was named Aogatoa during a formal ceremony on 6 June. It is the first time Shoalbusters have been built in South Africa - Damen Shipyards Cape Town entered into an agreement with Damen Shipyards Hardinxveld Shipyard to provide the designs, the technologies and the training support.

DSCT earlier said the R150 million two-vessel new build programme stimulated skills transfer, enterprise development and job creation, and supports the priorities of Operation Phakisa with respect to stimulating the South African maritime economy.

The shipyard has delivered a number of different vessels over the years, including tugs, dredgers pilot boats and research vessels. It was awarded a contract by the Transnet National Ports Authority (TNPA) to build two 27 metre Pilot Cutters for the Port of Cape Town, as well as a 27 metre pilot vessel (Pilot Cutter 2706) and its fifth Stan Tug 2006 for operations in the Port of Saldanha (the latter was delivered in March 2013).

DSCT in partnership with the Damen Group built a number of in-demand vessels to keep on stock, which significantly shortens delivery times. The company several years ago sold three Stan Tug 2208 stock vessels and delivered a second Multi Cat 1908, to a customer in South America. In 2012 DSCT built tugs for the Nigerian Ports Authority and in May 2013 delivered the fisheries research vessel Pensador to Angola. To date, DSCT has delivered over 40 vessels to African countries, from offshore patrol vessels to supply vessels, dredgers and tugs.

DSCT has leveraged on the reputation of its predecessor, Farocean Marine, which built three inshore patrol vessels for the Department of Environment and Tourism and two Damen Stan tugs for the SA Navy. Two new ATD 2909 tugs were delivered to the SA Navy in July 2015 and February 2016 and DSCT is bidding for the Navy’s Projects Hotel and Biro, which are seeking a new hydrographic survey vessel to replace the SAS Protea, as well as three inshore and three offshore patrol vessels.

Montsi said that local procurement is important and is something DSCT ties to maximise wherever possible. For instance, on the ATD 2909 tugs for the SA Navy, DSCT subcontracted and acquired parts from South African companies, although the engines, propulsion systems and some other items were imported.

Montsi told defenceWeb it was not always possible to add a lot of local content due to constraints regarding components suppliers and sub-contractors who need to be accredited by entities like Lloyds or Bureau Veritas. However, he told defenceWeb that DSCT has started an initiative to proactively identify local suppliers with a focus on SMMEs and establish issues that need to be addressed to facilitate their achieving accredited status. DSCT will then engage the likes of the Department of Trade and Industry and others to help the process.

Montsi said that being part of the Damen group, which owns shipyards in almost every continent, means DSCT has the potential to expose qualifying local companies to the entire group. At the moment DSCT partners with and sources services from companies around Cape Town. DSCT would like to broaden this to other provinces. To facilitate this, DSCT is talking to other big shipbuilders in South Africa, such as Southern African Shipyards, to join hands in helping the development and growth of local suppliers.

As part of its efforts to develop local skills, DSCT nearly five years ago started an apprenticeship programme, training youth in various shipbuilding and related activities, with an emphasis on recruiting women. Montsi told defenceWeb that DSCT has trained over 52 youth, most of whom have been absorbed into the shipyard, in an effort that “we are very very proud of.” Eleven new apprentices were taken on in 2015.

An important policy initiative by Government that Montsi believes offers a turning point in the development of the shipbuilding industry is Operation Phakisa with its focus on the development and growth of the blue economy sector. Without this initiative “the shipbuilding and repair industry, which is already challenged, would die.” In Phakisa Government commits to ensuring that all vessels requirements by the state and state owned entities will be built in South Africa. This means Government will stop exporting its business in the process creating jobs in foreign countries. “As the private sector we need to join in that lead and see how we can all work together and make Phakisa a reality.”

One of the core components of Phakisa is ship repair and services, something DSCT is active in across Africa. For instance, the company has serviced and repaired vessels for clients in Namibia, Angola, Nigeria, Tanzania, Kenya, Mauritius, Democratic Republic of Congo, Madagascar, Djibouti and Ghana. The Damen Group has also realised that it’s a lot more cost effective for people to come from South Africa to service Damen supplied vessels on the continent.

Montsi said a lot of this work is related to the oil and gas sector. This is one of three Phakisa main focus areas, along with marine transport and manufacturing and aquaculture. Minister in the Presidency: Planning, Monitoring and Evaluation Jeff Radebe in April this year said that since its introduction in 2014, the Ocean Economy component of Operation Phakisa has unlocked R17 billion in both public sector and private sector investments and created 4 500 new jobs. This includes the building of nine tugs for the Transnet National Ports Authority, two of which are destined for Port Elizabeth. They are being built by Southern African Shipyards in Durban under a R1.4 billion contract. Chairman of Southern African Shipyards, Dr Donald Mkhawanazi, said the tugboats project has created at least 500 direct and 3 500 indirect jobs. Transnet has allocated more than R7 billion to improve South Africa’s ports.

“South Africa’s location and the expertise demonstrated by projects like this are key to us increasing our share of the global marine manufacturing market, including ship-building and repair, rig repair and refurbishment or boat-building,” Chair of Transnet SOC Limited Linda Mabaso said last month.

Last month Rural Development and Land Reform Minister Gugile Nkwinti, chairing an Economic Sectors, Employment and Infrastructure Development cluster media briefing, said through marine transport and manufacturing, the contribution to GDP will increase from R7 billion to between R14 billion and R23 billion by 2019, creating between 40 000 and 50 000 jobs.

“With regard to off-shore oil and gas exploration, we will promote exploration in order to drill 30 exploration wells in the next two years. With regard to aqua culture, we envisage that the GDP contribution will jump from R0.7 billion to R3 billion and jobs created will increase from 2 227 to 15 000,” he said.

He said the country’s potential in terms of ocean economy ranges between R129 and R127 billion with between 800 000 and one million jobs potential by 2030, as compared to the current R54 billion and 316 000 jobs.

The Economic Sectors, Employment and Infrastructure Development cluster said that 14 licenses have been issued for oil and gas exploration, with drilling of two exploration wells scheduled to take place along the South African coast. “An amount of R353 million over the next three years has already been unlocked in the ports of Durban and Cape Town for boatbuilding infrastructure through incentives provided by government,” the cluster said.

“Further investments in boat building - catamaran production, workboat ferries for the navy, two offshore mining vessels and tugboats for the ports authority - and a fuel storage facility amount to approximately R3.6 billion.”

DSCT recently expanded its facilities in Cape Town, giving the company the capability to build bigger vessels, increasing capacity of the shipyard. In the new Shed 6 DSCT can build a vessel with a maximum length of 83 metres, beam of 15 metres and draught of 5.5 metres. Between four and five steel hull and aluminium vessels can be built annually.

Apart from building new vessels, DSCT is positioned to provide repairs and refit capabilities, Montsi said. DSCT Services & Repairs is using the strengths of the Group to build that capacity in South Africa.

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