Transnet urges niche markets

SMALL and medium-sized engineering companies must create niche markets for themselves to supply Transnet with parts for the locomotives the freight logistics state-owned company envisages building within the next two to three decades.

Transnet CEO Brian Molefe said at a University of Pretoria Alumni breakfast last week the growth in Africa and the expansion of intra-African trade would ultimately increase the growth in railways. His vision for Transnet entailed the "industrialisation of the railways" where Transnet would be manufacturing locomotives and establish concessions for its current freight role. Transnet would not be able to supply all the components‚ including wheels‚ windscreens‚ seats and even braking systems‚ therefore small firms needed to position themselves to become parts suppliers‚ Molefe said.

He said given the growth in Africa– seven of the world's fastest-growing economies were on the continent – Transnet saw a bigger opportunity in developing and building locomotives which would be needed for the expected expansion in the demand for rail transport.

Molefe referred to the latest Ernst and Young Africa Attractiveness survey which highlighted growth into sub-Sahara Africa‚ the expansion of intra-African investment‚ and the shift in investment from extractive to consumer focussed sectors as the three most crucial shifts in recent times.

" In less than five years Africa has risen to become the second most attractive investment destination in the world‚ tied with Asia."

Transnet in March this year awarded its biggest locomotive supply contracts of R50-billion to four global original equipment manufactures‚ as part of its R312-billion rolling capital expenditure market demand strategy announced in 2012.

Transnet has budgeted another R1-billion in research and development over the next seven years and will spend R8-billion on training‚ including the training of 2000 artisans over the same period. - Amanda Visser