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South Africa will establish shipping company with private sector directors

Shipping tanker out at sea

The government of South Africa is planning to launch a shipping company, with board members drawn from the private sector.

It wants to buy or build its own ship fleet, including at least one oil tanker and one chemical tanker.

The South African Shipping Company (SASCO), a new state-owned business, will own and run these ships. The President will choose a minister to be in charge the company and appoint all board members and the CEO. This is according to Business Insider.

SASCO would be “the preferred national government shipping company.”

the yard of a shipping company

According to the South African Shipping Company Bill, board members of the company must be appointed on the basis of their knowledge and experience in the fields of shipping, corporate management; business studies; maritime transport; transport and logistics; ship agency, clearing and forwarding; and commerce, banking, finance, economic or legal matters.

The Bill, which is a draft law, was released by the Department of Transport this week. It will be discussed with the public later this month.

A government shipping company

That could mean that SASCO could be set up as soon as next year, possibly through an acquisition. The plan says that “a shipping going concern” or other companies could be bought and folded into the new SOE.

The Bill says what an oil tanker, a chemical tanker, a container ship, a multipurpose bulk carrier (which can carry anything from coal to grain), a coastal government shipping company shipping vessel (usually used to land cargo in shallower ports), and one or more bunker barges, ships that carry fuel and supplies to other ships, must be in the strategic fleet that the company must buy.

a yard with shipping containers

Under the draft law, the money to set up and run the company would come directly from the state.

However, the money to buy the ships would come from the “Industrial Development Fund,” which is probably a mistaken reference to South Africa’s Industrial Development Corporation (IDC).

READ MORE: Godongwana: Eskom to be divided into three entities

Since 2017, South Africa’s Comprehensive Maritime Transport Policy (CMTP) has called for a local government shipping company to be given preferential access to SA ports and for the government to use other “radical” methods to help this company.

south africa flag painted on wall

The Department of Transport says that South Africa is the only BRICS country that doesn’t have its own ships. It used to own one shipping company, Safmarine. The other BRICS (Brazil, India, China and Russia) nations all own shipping lines. With China owning the largest fleet.

Who started Safmarine in South Africa?

The company’s origins trace back to June 1946 when South African industrialist Dr. Hendrik van der Bijl and American ship owner Henry Mercer joined forces to establish it, using three American wartime ships. Initially, under American control from 1950, the Industrial Development Corporation (IDC) intervened in 1959 to finance its repurchase and restore South African control. However, the company eventually divested its holding in 1984.

safmarine ship at sea

In 1996, its container line found its headquarters and registration in Antwerp, Belgium, following its acquisition of the Belgian container line CMBT, which had originated from Compagnie Maritime Belge.

Does Safmarine still exist?

In 1999, Danish shipping company A.P. Moller-Maersk Group acquired the group, and rather than fully integrating it into Maersk Sealand, the decision was made to retain the Safmarine brand under Maersk Line. In 2002, the group expanded its operations by acquiring Torm Lines. However, on October 3, 2011, it made the strategic choice to integrate its internal support and management functions into those of its sister company, Maersk Line. By 2020, the company had been fully merged into Maersk Line.

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