Durban shipbuilding scheme gets backing

The Kwazulu-Natal-based heavy engineering firm Duys Engineering has received accreditation for a shipbuilding initiative under the outgoing Strategic Industrial Project (SIP) tax-incentive scheme. CEO Henk Duys believes that there are immense possibilities around the Durban shoreline, especially in the construction of ships or parts on contract from European countries.

The shipbuilding industry has been dormant in Durban for some time, and while it has good basic infrastructure, much of the equipment needs upgrading. World demand for ships is on the increase and such an investment would create many jobs in the area. Duys has had interest from overseas firms seeking a company to build hulls, tugs and trawlers.

The company, which has been accredited by the National Ports Authority as well as provincial and local authorities, has received approval for a $14.5 million project from the government to fulfill this vision. However, a recent deal to acquire a shipyard has fallen through, putting start-up of the project on hold for some time.

Duys has not lost hope, however, and intends to make a success of the project and envisages spending some $23 million on a yard. A project such as this will fail without government support, he says, as international competition, especially from the east, is fierce. According to the first July government gazette, the company applied for, and qualified for, some $7.2 million for plant and machinery, $457,000 for buildings and other assets worth some $6.8 million.

Approved in March, the project was expected to go into commercial production in September this year and was to run from October to September 2008. The company’s project was awarded seven points and afforded preferential status and will receive a tax incentive of $4.3 million. This amount, that will be deducted from national revenue, is balanced by the fact that the company will create 1,000 direct and 6,000 indirect jobs before its completion.