With an estimated 12 000 ships calling at South Africa’s ports each year and over 30 000 vessels sailing along the South African coastline annually, the ship repair industry should theoretically be a thriving and growing industry. In reality, however, it is an opportunity that is largely being missed.

Durban’s ship repair sector – worth an estimated R1-billion – is stagnating owing to a huge shortfall in ship repair facilities. The Transnet-owned floating dock has been out of commission for a number of years and the graving dock has underperformed owing to a lack of maintenance and repair. There has been little, if any, meaningful private-sector investment.

Internationally accredited marine engineering company Dormac, which is one of the largest ship repair users of the Durban graving dock, has been finding it difficult to remain competitive in the absence of world-class facilities. It says it has been turning away between four and seven vessels each month and estimates that the demand for ship repair at South Africa’s busiest port exceeds supply sevenfold.

Whereas it was able to dock just six vessels in Durban over the past year, it serviced 20 in Cape Town – ten of these vessels, however, would have preferred to have been serviced in Durban.

This reality formed the extremely strong business case for its biggest investment yet: the Dormac Dock 1, the new multimillion- rand composite floating dock that arrived in the Port of Durban on July 17.

Investment Case
Dormac MD Chris Sparg says the compelling case for an investment of this nature predates present-day frustrations. The company’s original decision to invest in its own floating dock goes back at least 16 years to just after Dormac was created through the June 2000 merger between Dorbyl Marine Durban and Imac, part of Southey Holdings.

One of the causes of the delays was obtaining permission for this project from Transnet National Ports Authority (TNPA).

A breakthrough came in 2013 when Dormac was informed that, on presentation of a solid business case, a mature environmental impact assessment (which took two years to finalise) and an acceptable design, the project could go ahead.

“It was a significant step. We realised that if we didn’t take it, we would never move forward,” Sparg says.

Dormac changed its original plan from a graving dock to the recently arrived floating dock. Instead of infilling a space for the quay and dock, it elected to reclaim space for the quay from existing leased land. This change also made it possible to retain vital slipway infrastructure for repairs and new building.

Sparg says that, on receiving permission to go ahead, Dormac fast-tracked the project, starting with the purchase of the new dry dock from the Ukraine-based Pallada shipyard. What would have ordinarily taken around 24 months to complete has taken only eight months and Dormac has taken delivery of the dry dock a month ahead of schedule.

The Dormac management team is extremely complimentary about the quality of the workmanship and the service received from Pallada, regarded by some as an unlikely supplier, given recent political tensions in the country.

Long Tow
The new floating dock left the Pallada shipyard at the end of April under tow to the tug Fairplay 33. Seventy-nine days and 8 800 miles later – with nine days spent sheltering in Saldanha Bay to escape the Cape weather – it arrived in Durban.

Unlike all other floating docks in South Africa and neighbouring Namibia, Dormac Dock 1 is brand new with the latest state-of-the-art technologies, which include two 7.5 t dock portal cranes, two high-voltage transformers, four ballast electric pumps, two fire service electric pumps and six capstans, each with a traction force of 8 t.

The new 155 m dock has a reinforced ferroconcrete pontoon measuring 139.5 m × 32.4 m with steel wing walls. It has a dock lifting capacity of 8 500 t and a total submersion depth of 11.8 m.

Its positioning alongside a specially designed and extremely strong quay has necessitated the excavation of 112 000 m3 of soil and the construction of 176 piles. It will be permanently attached to the new quayside by two accurately driven 32 m pylons on which the floating dock will raise or lower with connection pawls.

With the floating dock alongside a newly built repair quay, as opposed to the more common Mediterranean mooring type of placement, the ship repair will become more efficient, with close access to Dormac’s adjacent state-of-the-art workshop facilities. Permanent site establishment will be in place for docking needs and is expected to reduce setup times.

Alongside the quay is a newly hardened work area created by covering an old derelict slipway that has not been in use for over 30 years. This is ideal for on-location fabrication and a laydown area for equipment close to a docked vessel. The yard has an office block available for project personnel within 50 m of the dock entrance.

Contractor Franki SA has helped fast-track the construction of the quay. According to Sparg, most contractors estimated that this would take between 12 and 13 months to complete. With final dredging expected to be complete by September at the latest, it would have taken just nine months.

Docking Orders
“We want to get into operation as soon as possible. We have some docking orders and we need to get them executed. We have not pursued marketing dockings aggressively for the month of August but, for the month of September, we already have four. If we can get her commissioned by August, we have a further two,” says Sparg.

Dormac also has a second tier of 12 provisional bookings and the company is confident that it will be able to bring in 45 dockings over the next year, doubling the turnover of its Durban business.

Financial director Craig Samuel says that the rationale behind the substantial investment in Dormac Dock 1 was that it would be occupied 24/7. Given the interest from international clients so far, management is confident that it will achieve this.

Phakisa Alignment
Operations director Ian Cameron adds that the business case for the investment was based on attracting additional docking opportunities into the Port of Durban and growing the market for South African ship repairs, coinciding perfectly with government’s Operation Phakisa, which seeks to leverage the capacity of the South African maritime industry for economic growth and job creation.

Sparg says that Dormac does not share the widely held opinion that the current downswing in both the South African and global economies is reason to hold back on investment to minimise risk.

The company’s last financial year was its best yet and, given the demand for ship repairs in Durban, the commissioning of the new dock is likely to result in a second record year.

“We are of the opinion that, if you operate this business correctly, you will bring the market. We’ve successfully competed internationally for 14 years. Dormac has always grown. We’ve also moved into oil and gas. We scenario-plan and we honestly believe that what we offer is world-class. We see ourselves as a world-class shipyard. We do not benchmark ourselves locally, but internationally,” he says.

Looking to the future, Samuel says that traffic around the Cape is increasing as many vessels are avoiding the Suez Canal, which takes the bulk of traffic from East to West. In addition, vessels operating on the oilfields on the west coast are also looking to come to Durban for ship repairs because of capacity constraints there. This means an even bigger boost to ship repair opportunities.

Another plus is the current exchange rate, which means that South African ship repair companies are well positioned to competitively compete with international counterparts in the Canary Islands, Dubai and Singapore.

Sparg says that Dormac intends positioning itself to act on these opportunities. “The naming of the new dock – Dormac Dock 1 – indicates that this is just the start of the plan and not the end. Dormac’s vision is to strategically invest in this type of asset going forward.”

He says that Dormac has “a sincere interest” in future investment in this area and has already won a bid to locate a floating dock in one of Namibia’s ports. It is also bidding for TNPA’s Saldanha Bay project.

These projects, together with Dormac Dock 1, require a ready supply of skilled labour, which is in short supply in South Africa. Samuel says that the already successful artisan training programme, which has trained 626 employees over the past five years, will now be extended to include dry docking. This will add another 15 candidates a year, bringing the total number of artisans trained by Dormac each year to around 100.

Based on the regular throughput of envisaged dockings, the new floating dock is expected to create an additional 80 new direct jobs. Further job creation is also likely to result from Dormac’s business partners, contractors and suppliers.

Many have evolved and continue to evolve into sustainable businesses, thanks to Dormac’s stringent enterprise development programme that has seen it provide both skills development and funding for fledgling suppliers.

As a result, Dormac’s investment both in the floating dock itself and the people who will operate it provides a perfect fit with Operation Phakisa, the company’s management believes.