Benefiting from South Africa’s industrialization
(People's Daily Online) Yu Meng 2016-01-27 07:01
The Mpisi Group Logo
The Mpisi Group, a logistics service company connecting South Africa and China, was established in 2004 when South Africa officially recognized China's market economy status, and the bilateral trade began to expand rapidly ever since.
World-class minerals are sent to China while affordable consumer goods are shipped to South Africa. The volume of the highly complementary trade between the two countries has increased from $4.6 billion in 2004 to $60.3 billion in 2014.
During the same period, Mpisi, which started out as a custom clearing agency, has grown into a one-stop logistics service provider who now employs 300 staff members, 75 percent of whom are local.
As the commodity super cycle ended in 2011, the Mpisi has felt changes directly in bilateral trade. Clothing and iron ores are no longer passings so much through South Africa’s ports, instead wind turbines and cement are taking over the roads.
“During 2009-11, we transported 300,000 tons of iron ores every year,” recalled Huang Renzhi, the founder and CEO of the group. In 2009, Mpisi delivered Zambian copper ores for Chinese mining company JinChuan Group. Since then, sending ores overseas has become Mpisi’s core business until the end of the raw materials super cycle in 2011. The company has seen a steep decline in ores exportation since then. “This year we have no orders at all, ” said Huang.
At the moment, Mpisi’s Chinese clients are mainly from key sectors for industrialization such as infrastructure and renewable energy.
“Chinese wind power companies are actively taking part in South Africa’s Renewable Energy Independent Power Producer Procurement Programme,” Mpisi’s project manager Gu says, adding that he has helped Long Yuan Power and GoldWind, a wind turbine manufacturer, ship their products to the Northern Cape and the Eastern Cape respectively. In 2015, Mpisi’s break bulk cargo, like wind turbines, is reaching 100, 000 freight tons. Mpisi has bought new freight trucks to meet this demand.
As South Africa develops its own manufacturing sector, the export of clothing and textiles is no longer profitable for Chinese producers. To make up for losses caused by reduced orders from Chinese exporters, Mpisi decided in 2013 to establish its own garment factory which is now employing 135 workers.
”Currently there are 10 employees of the company receiving training in China,” Huang said. “The training is free and we have also provided them with accommodation.”
”Youth unemployment in South Africa is constrained to lack of skill,” noted Huang. “The manufacturing industry will advance when more skilled labor come into the market.”
(The story was originally published on Business Day on December, 2nd, 2015.)
