SAS on course for recovery

The order book of a once defunct firm will soon exceed R1 billion, thereby creating hundreds of new jobs, largely thanks to a relatively small injection of loan funding by the KwaZulu-Natal Growth Fund. Since the R24 million loan was made two-and-a-half years ago, the once moribund Southern African Shipyards (SAS) in Durban has created 270 full-time jobs.

SAS, formerly Africa’s largest ship builder, was shut down in 2003 due to a lull in demand for ships but the KwaZulu-Natal department of finance and economic development decided in January 2006 to resurrect the province’s shipbuilding industry.

The KwaZulu-Natal Growth Fund granted the loan, which is structured as a seven-year debt instrument, to acquire SAS to Ocean Masters Marine Services, a 47 % black-owned and led company.

Since then the shipyard has secured a contract valued at R400 million to build five harbour tugs for state-owned rail and freight firm Transnet. Ocean Masters says about 270 permanent jobs have been created as a result of the contract, while R200 million has so far been spent on local suppliers and sub-contractors. A spokesman for the company said that the firm’s prospects remain positive and, based on immediate contracts that are in the process of being finalised, will see its order book swell to over R1 billion and direct permanent employment levels increasing to 450 employees.