The 34South facility – a planned ship recycling facility located along the west coast of South Africa – intends to meet all the requirements stipulated by the EU commission
The 34South facility will target larger Panamax-sized vessels, and once approved, will be the first green, compliant, ship recycling centre in Africa, making South Africa one of the first non-OECD countries able to accept these end-of-life vessels.
Those behind 34South gave presentations on its background and development at the Riviera webinar The first certified ‘EU equivalent’ shipbreaking facility in Africa held on 4 February 2021. They were Frost & Sullivan Africa partner & Africa chief executive Hendrik Malan, Frost & Sullivan Africa consulting analyst Yaa Agyare-Dwomoh, 34South managing director Robin Hoogwerf, and Industrial Development Corporation of South Africa (IDC) senior dealmaker Herman Husselmann.
Mr Malan explained the commercial viability of the project. He noted that India, Bangladesh and Pakistan control around 90% of the ship recycling market and have a well-developed downstream infrastructure that is willing to pay premium prices for rolled steel products. There are well-known concerns around the shipbreaking industry in the Indian sub-continent: environmental concerns, labour conditions and sustainability.
Major shipping companies are aware of these issues and have introduced their own internal policies, a trend that is driven by stakeholders and charterers, noted Mr Malan. In summary, he said, “The bulk of global ship capacity for recycling vessels does not comply with sustainable practices, the global legislative environment is pushing a transition toward a greener industry, and many industry leaders are being proactive in adopting responsible practices. All these factors support investment in greener facilities,” he said.
So why Africa? Ms Agyare-Dwomoh explained the geographical implications of a ship recycling facility in Africa. The first point is the lack of 10,000 ldt plus facilities in Europe on the EU list of approved ship recycling yards. The second point was the lower labour costs in South Africa compared to a European ship recycling facility. Another aspect in favour of a ship recycling facility in South Africa is location.
“The final voyage costs would be lower to send a vessel to the southern tip of Africa (compared to a Europe to Asia trip),” said Ms Agyare-Dwomoh. The saving would be around 11,600 km.
“In conclusion,” said Ms Agyare-Dwomoh, “this facility offers a prime opportunity, being able to decommission larger vessels in a responsible manner, in an opportunistic location,” she said. Ms Agyare-Dwomoh also highlighted that South Africa exports significant volumes of scrap metal – a trade the new facility would contribute to.
Mr Hoogwerf covered the practical aspects. 34South has a land option in the Saldanha Bay Industrial Development Zone and includes the IDC as a shareholder.
The facility is a 10-ha site in a free trade zone. “There are large company tax incentives for operating in this zone,” said Mr Hoogwerf. Regarding the facilities, he said “One of the main features are large gantry cranes for the efficient handling of the recycling materials.”
The facility will have a shiplift and transfer system with a capacity of 240 m long and 40 m wide to handle vessels up to 18,000 ldt. The company will design and commission a fully South Africa and EU-accredited waste handling facility, which will include hazardous waste.
Mr Husselmann explained the IDC is 100% owned by the South African Government. The project touches on two important IDC tenets, supporting the steel sector and supporting the maritime sector.
From left to right: Frost & Sullivan Africa consulting analyst Yaa Agyare-Dwomoh, Frost & Sullivan Africa partner & Africa chief executive Hendrik Malan, 34South managing director Robin Hoogwerf, and Industrial Development Corporation of South Africa (IDC) senior dealmaker Herman Husselmann (source: Riviera)
Results of The first certified ‘EU equivalent’ shipbreaking facility in Africa Polls
Having seen the presentations what impact will the Saldanha Facility have on ocean/marine life?
Positive impact: 17%
Will not adversely impact: 19%
Adverse impact: 11%
Am unclear: 32%
EU Regulations will extend to EU ownership and not only flags…
Having heard the presentations do you see South Africa as a commercially viable destination for ship recycling?
Yes, major player status awaits: 35%
Yes, but regional status: 28%
Yes, for local markets: 4%
Not persuaded: 25%
If stricter environmental standards are enforced, do you foresee the use of scrap metal in crude steel production to...
Remain the same: 20%
Which regulation will have the biggest impact on a South Africa-based ship recycling facility?
Hong Kong Convention: 19%
EU SRR: 55%
Basel Ban Convention: 26%
If you were considering using this facility, how much importance would you attach to the fact it allows operators to bypass the Suez Canal tolls?
Great importance: 13%
It is important: 21%
A consideration, but not the most important consideration: 54%
This would not register as a consideration: 12%
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