Transnet SOC must seek new opportunities in areas such as fast-moving consumer-goods volumes to compensate for a slump in Chinese demand for South African commodities such as coal and iron ore, according to Chief Executive Officer Siyabonga Gama.
The South African state-owned rail, ports and pipelines operator is working on a “refreshed” operating model, Gama told employees on Monday, according to extracts of his speech posted by the Johannesburg-based company on its Twitter account. Transnet should also expand its manufacturing capabilities, he said.
“For a long time, we have relied on the voracious Chinese appetite for commodities that we move,” Gama, whose appointment was made permanent last week following a year as acting CEO, was quoted as saying. “Under these circumstances, we could afford to provide capacity at any cost. This has changed, certainly for the next half decade, perhaps forever.”
Transnet said in October it extended its capital expenditure program to as much as R380 billion ($26 billion) over the next 10 years as it considered delaying projects amid slumping prices of raw materials. An earlier plan was to invest R337 billion over seven years.
Transnet is seeking to improve customer service and collaboration within the company and simplify its processes, according to the Twitter postings.
“As part of this new thinking, we are changing the manner in which we are organised,” Gama was cited as saying.
© 2016 Bloomberg