SA shipbuilding industry has potential to chart new waters and cause economic waves

South Africa’s potential to become a major player in the multi-billion rand shipbuilding industry on the continent presents an opportunity for job creation and economic growth, but government entities still procure some vessels internationally at higher prices.

Sandock Austral Shipyards (SAS) chief executive Prasheen Maharaj highlighted the potential of the sector when two locally built launch boats were christened in Durban on Monday before being handed over to the Transnet National Ports Authority (TNPA). The vessels will replace two 40-year-old vessels in the Port of Cape Town.

Maharaj, who is also president of the Durban Chamber of Commerce and Industry, said the sector holds potential to boost economic growth.

The local construction of the two R58 million vessels held significance beyond the immediate benefits to Transnet, which is expanding its marine craft fleet in line with its recovery plan, he said.

“By investing in local shipbuilding, we foster the development of a robust maritime ecosystem, supporting a wide range of ancillary industries such as steel manufacturing, engineering, electronics and logistics. This translates into increased domestic production, reduced reliance on imports, and a significant boost to our nation’s GDP,” he said.

The project created about 70 direct jobs and 40 indirect jobs through SAS contractors and supported the practical training of 20 apprentices.

“Shipbuilding is a labour intensive industry, generating a substantial number of skilled and semi-skilled jobs,” said Maharaj. 

Building ships locally also strengthens domestic supply chains, ensuring a more reliable and efficient flow of goods and services.

“This enhanced resilience is particularly crucial in times of global disruptions, as we have witnessed in recent years. By cultivating a strong local supplier base, we not only mitigate risks but also create opportunities for small and medium-sized enterprises to thrive, further bolstering our economy — especially BEE [black economic empowerment] companies.” 

Maharaj said the benefit of building ships locally enhances the country’s international competitiveness as a low-cost manufacturing destination. “This opens doors to global export markets, enabling us to become a leading exporter of vessels and stimulating our economy even further.”

He said the SAS recently forged a technology partnership with Vera Navis, the largest firm of Naval Architects and Marine Engineers in Portugal.

“The intention behind the partnership is to bring European design and manufacturing technology, driven by artificial intelligence that will substantially increase South Africa’s productivity and efficiency,” he said.

“As a result of the company’s partnership with Vera Navis, we gained the confidence of BRS Shipbrokers, the second largest Ship Broking company in the world based in Geneva, Switzerland, who have placed a serious inquiry on us to build what could potentially be an order for six CSOVs [commissioning service operation vessels] . This contract value is approximately R8.5 billion.” 

CSOVs are vessels that maintain offshore wind farms, the demand for which is expected to grow as the world moves towards renewable energy sources.

But, he said, to secure the contract “and a few more multi-billion rand contracts” the company would require an investment of about R150 million to build a slipway to launch vessels and buy new high tech equipment. It would also need a secure lease of at least 25 years from Transnet.

Maharaj likened the potential of the local ship building industry to the growth the sector achieved in South Korea.

“If any of you think that this is a pipe dream, I want you to remember that the South Korean Shipbuilding Industry and the South African Shipbuilding Industry were the same size in the mid 1970s. South Korea took a very strategic view and aggressively implemented a shipbuilding industrial plan. They became the largest shipbuilding country in the world and held this position for over 20 years to be only recently overtaken by China,” he said.

By localising the construction of dredging vessels, for example, the country could meet domestic demand and tap into a burgeoning market across the African continent.

The TNPA’s acting manager for the Port of Cape Town, Ophelia Shabane, said the two launch boats would be used to service customers in niche sectors such as the fishing industry.

Launch boats are the only craft that can assist in towing and pulling vessels into confined sea channels. They are also used to run mooring lines and assist in docking, sailing and shifting of fishing and other smaller vessels in the port.

KwaZulu-Natal’s MEC for economic development, tourism and environmental affairs, Musa Zondi, said the project demonstrated the power of the country and strength of the province.

He said the SAS is in partnership with the department to support the 24-month training of marine engineering graduates in mechanical, electrical and industrial engineering.

“This programme is aimed at addressing the scarce skills of the industry — the graduates will form part of the resources to establish a boat-building park for KwaZulu-Natal which will be overseen by the newly trained marine engineers,” Zondi said.