Boston, MA -- (SBWIRE) -- 01/09/2013 -- BMI maintains our cautiously optimistic stance with regards to South Africa's freight transport sector in 2012. Although container volumes at the country's largest box-handling facility, Durban, have struggled to maintain volumes, total tonnage volumes at the Port of Richards Bay have grown by around 10%. Given that the facility is the largest South African port in terms of total tonnage volumes, this also bodes well for the country's rail freight sector, and would suggest that the feared slowdown in Chinese demand for the country's commodities has not yet impacted upon the sector.

Headline Industry Data

- Rail freight growth will be 8.4% in 2012, and will average 3.7% to 2016.
- Richards Bay Port's tonnage throughput in 2012 is forecast to increase by 8.7%. Over the medium term we project a 3.0% average annual increase.
- 2012 total trade growth is forecast at 1.3%, down from the estimated 7.8% expansion in 2011.

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Key Industry Trends

Transnet Registers 21% Revenue Increase

South Africa's state-owned transport company Transnet registered a 21% year-on-year (y-o-y) rise in revenue to ZAR45.9bn (US$5.6bn) during FY2011/12 ended March 31. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to ZAR18.9bn (US$2.3bn) during the reported period, compared with ZAR15.8bn (US$1.9bn) during FY2010/11. This was partly attributed to a 10.4% y-o-y rise in rail volumes to 201mn tonnes. However, net profits fell 1.5% y-o-y to ZAR4.1bn (US$0.5bn).

TFR Issues Tenders For Locomotives

BMI notes that South African state-owned freight transport company Transnet Freight Rail (TFR) is investing heavily in developing its rail network. This consists of investments not only in the physical infrastructure, but also in the equipment used to transport goods. Investment has lagged behind demand in the country, and given how important South Africa's commodities exports are to the economy we note that Transnet's current commitment to improving performance is timely.

Largest SA Container Vessel Docks At Durban

The Port of Durban has announced the arrival of the largest container vessel ever to dock at a South African facility. The MSC Sola, which has a capacity of 11,660 twenty-foot equivalent units (TEUs), docked at the port on July 5 2012. The Port of Durban underwent a ZAR2.9bn (US$357,941) expansion programme in 2010. BMI believes that the vessel's arrival will demonstrate to other container shipping companies that Durban is capable of handling larger vessels, although it should be noted that the vessel was not fully laden when it called due to shallow waters.

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