Maersk SA starts new year on even keel

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Associated Press

Maersk South Africa expects container exports to grow between 5 percent and 10 percent this year after posting double-digit growth last year. Containerised imports grew 5 percent. Photo: AP

Johannesburg - This year “started off as the last one ended” for Maersk South Africa, with imports flat or coming down but exports recording double-digit growth as higher inflation, increases in food and petrol prices, as well as the weakening of the rand, toned down local consumers’ tastes and needs.

“Import growth will be flatter because consumers have less purchasing power,” Matt Conroy, Maersk SA’s trade and marketing manager, said at a results presentation in Johannesburg yesterday.

The local arm of Danish shipping group Maersk Line was sustained last year by strong demand for chrome and manganese from China, which accounted for 35 percent of export revenue, while refrigerated exports, mainly of fruit, accounted for 25 percent of earnings. Paper, timber, food and beverages, chemicals and automotive parts all chipped in the remainder of the R1.5 billion in earnings last year.

Maersk Line is the shipping business of the Danish AP Moeller-Maersk conglomerate, and the largest container shipping company, with southern African shipping line Safmarine a member of the group.

Exports to Asia grew by 3 percentage points to 50 percent of the total last year. Europe came in at 30 percent and the Middle East and India at 10 percent.

Trade with Africa made up less than 5 percent of total container flow and was mostly with Kenya, Angola and Nigeria. Exports from South Africa constituted the bulk of the African business.

Container exports from South Africa were expected to record 5 percent to 10 percent growth this year, following the more than 10 percent growth last year, said said.

“You need to consider the context of this growth. In 2012 mining output was restricted by industrial action. In contrast, 2013 was fairly stable from a labour point of view, and this was reflected in export volume,” he said.

Conroy said that, while container exports in general could continue to grow, refrigerated cargo was expected to be affected by unseasonal weather such as hail and late frost, which would affect production of many fruit varieties. Output of table grapes was expected to be down 25 percent to 30 percent on last year’s volumes.

Commodity exports were expected to grow by between 5 percent and 10 percent this year, but that hinged on the recovery of the US and European economies.

Imported containerised cargo increased 5 percent.

“The weaker currency has improved the margins for manufacturers and the export markets, in the short term at least. The other edge of the sword for many exporters is that some input costs, where there is foreign exchange exposure, have or will increase,” Maersk SA managing director Jonathan Horn said.

He said the signs were already evident with container volumes rising more than 10 percent on traffic out of the country last year but the bulk of this was mainly raw materials, not finished goods.

Maersk Line is the core liner shipping business of the Maersk group, with a merchant fleet comprising 600 vessels.

The company established its southern African office in 1992 in Cape Town and has branch offices in Port Elizabeth, Durban, East London and Johannesburg.

Safmarine is the local containerised shipping services division. It was established in Cape Town in 1946 and acquired by Maersk Line in 1999.


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