Sappi raises issues of inefficiency at Port of Durban with President Ramaphosa

Inefficiencies in the Port of Durban and rail transport infrastructure are some of the concerns raised by Sappi Limited during the opening of its plant by President Cyril Ramaphosa. The President was at the official opening of two multi-billion rand investment projects on the KwaZulu-Natal coast, the R7 billion Sappi mill at Umkomaas and a new automotive plant at KwaDukuza.

The chairperson of Sappi Limited Sir Nigel Rudd told Ramaphosa about challenges hindering the export of goods through the Port of Durban. He says inefficiencies in the ports as well as in the rail infrastructure is costly and hindering the company’s growth.

“As a significant user of rail services and one of the largest container exporters using the Port of Durban, we are cue to the way South Africa is currently grappling with congested and inefficient ports, unreliable road and road infrastructure. As we look forward to the future investment decisions the board will make these decisions on the basis of economics. We are confident that the government understands and appreciate the importance of addressing these issues”, says Rudd.

This comes as Sappi expanded its mill at Umkomaas at a cost of R7 billion to meet the increase in global demand for dissolving pulp used in renewable textiles like viscose. Sappi says the Umkomaas mill expansion has provided business opportunities to about 3 000 small contractors, mainly from the area. The company’s Chief Executive Officer (CEO) Steve Binnie says Sappi mills also sources timber from small plantation owners in rural areas who are mainly women.

“We obtain large percentage of our raw wood requirement from our Khulisa farmers approximately 4 000, most of them are rural women based. Over 80 percent of the approximately 3 000 contractors’ positions for this project went to community members. In addition, Saiccor mill has spent over R220 million on local community initiatives including community skills centre. We contribute R60 billion per annum to the KZN economy both directly and indirectly”, Binnie explains.

Meanwhile, the new Metair Hesto Harness plant has created 4 000 jobs in the mainly rural Ilembe District. The plant manufactures wiring assemblies which transmit information and supply electrical power in vehicles. Toyota and Ford are among the automotive manufacturers who get parts from the plant.

The wage bill of the plant pumps R30 million per month into the local economy. For many workers at the plant this is their first full-time job.

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“This is my first job opportunity and it is the first place that I am currently employed in. It was a very significant opportunity in my life, it improved the way that I provide for my family. I now have six dependents, all thanks to Hesto”, says one on the employees.

“It really changed my life because where I come from I am a single parent. Yes I’ve got kids now, I’ve got a house and living on my own and it is so nice to have my own money it changed a lot of things”, says another employee.

Meanwhile, Ramaphosa says great strides have been made in improving transportation infrastructure, including the port of Durban. However, a lot still needs to be done to improve the efficiency of rail and road transport.

“All those issues will definitely be addressed because they are holding Sappi back from growing even further. We have made progress in addressing challenges with our rail and port operations, but much more need to be done to enable Sappi to able to export its products. I was not pleased when I heard that up to 75 000 tons sometimes stays in their warehouses without having spaces and capability at our ports to exports. So, it comes down to the efficiency of our ports and that is precisely what we want to focus attention on”, Ramaphosa explains.

Ramaphosa says the country is slowly recovering from the impact of the COVID-19 pandemic.