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Grindrod aims for completion of northern Mozambique logistics hub in H1

26th March 2021

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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Grindrod aims to have its logistics hub in Palma, in northern Mozambique, “up and running” by the end of the first half of this year, says Grindrod Freight Services CEO Xolani Mbambo.

Palma currently serves as a focal point for oil and gas developments in that part of the country.

Mbambo says the establishment of the logistics hub was postponed as a result of insurgent activity in the region last year.

“We have since decided to continue with construction.”

The logistics hub will include fuel and container depots, while also catering for some engineering services.

Grindrod CEO Andrew Waller notes that French energy giant Total, which is developing a liquefied natural gas project in the region, announced in December that it had scaled down from 4 000 people on site, to 1 600 people, owing to rising security threats.

He says Mozambique has to address these long-standing and deep-seated security threats from religious insurgents “as a country”.

“We operate in northern Mozambique under the auspices of Total – they control the area under their watch,” notes Waller.

“Total has a significant security presence; there are many governments involved. But, of course, we would love there to be a solution.

“We have scaled down a few people in that area, but we are largely the only means to get product into that region, as you cannot use truck transport.

“Our ships are highly critical to bring in fuel, food and water, as well as construction material. So far, we haven’t been involved in any skirmishes. We are in a secure zone [that] Total has set out, and which is patrolled by various security forces.”

Grindrod operates seven ships into the region, all able to land on the beach.

The growth prospects for Grindrod in northern Mozambique remain “very exciting”, says Mbambo.

“From here we want to push on and entrench ourselves up east, to unlock Nacala, Zambia, Malawi and Mozambique. This really talks to Grindrod’s strategy to unlock trade corridors.”

The Numbers
Earlier this month, Grindrod reported its financial results for the year ended December 31.

Revenue from core operations declined by 1%, to R4.7-billion, compared with the previous financial year.

Trading profit from core operations was fairly flat, at R1.4-billion.

Core operations include ports and terminal operations, logistics and the company’s bank.

Businesses that Grindrod is in the process of selling include Senwes, with the deal expected to be wrapped up this month.

Marine Fuels, however, has proved more difficult to sell, with Waller noting that Grindrod remains committed to exiting this business.

Looking ahead, Waller says Grindrod saw a strong recovery in the commodity and container market in the second half of the financial year, and that this trend is expected to continue into this year.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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