A Financial Report on Port Elizabeth - Free Essay Example

Port Volumes Port Elizabeth handled a total of 1,176 ships during the 2011/12 financial year ended 31 March 2012, with a total tonnage of 27,005,954-gt. Cargo handled during the fiscal year 2005/06 amounted to 11,755,469 tonnes including containers, of which 5,970,945 tonnes was bulk cargo, 1,729,880t was breakbulk, and 4,054,644 tonnes were containers. Imports (without containers) amounted to 2,006,010t and exports 5,659,668. Transhioment cargo handled was 35,147t without containers. The port handled 300,344 TEUs during 2011/12, of which 157,057 were imports including 74,655 transhipment TEUs and 143,287 were exports, including 77,558 transhipment TEUs. Port Facilities Port Elizabeths main features are the container terminal, fruit terminal and manganese terminal. The container terminal has a capacity in excess of 375,000 TEUs and has the advantage of being able to load railway trains directly under the gantry cranes, without containers having to be double handled, thus speeding up delivery to inland destinations. There are 5,400 ground slots for conventional container handling. The terminal has three quayside gantry cranes and is supported by a number of straddle carriers. Motor vehicle components constitute a large percentage of the container traffic at Port Elizabeth, with other commodities including steel, machinery, wool, and agricultural products making up the balance. The break bulk ter minal handles a variety of agricultural products including wheat imports and fruit (deciduous and citrus) exports as well as steel, scrap, timber and motor vehicles. At the bulk facility the storage bins have a capacity of 350,000 tonnes of manganese ore, which is the major bulk export from Port Elizabeth. Smaller volumes of other ores are also handled here. The port offers bunker facilities at berths 13, 14 and 15 (ore and tanker berths), with diesel oil available at the Dom Pedro Quay (trawler quay).A full range of ships chandling and stevedoring as well as other support services is available. The port houses a yacht club and marina as well as a NSRI base. Looking ahead: Port Elizabeth faces losing some of its container business, and in the future all of its dry and liquid bulk traffic to the new port of Ngqura (Coega) which has been open since October 2009. The bulk terminals involving manganese exports and petroleum products at Guar are however not expected to be developed for some years as Transnet is locked in to existing contracts at Port Elzaibeth. Interestingly a Port Infrastructure Master Plan of justa few years ago made provision for extending Port Elizabeth harbour with a new quay to the east of and adjacent to the No.1 or Charl Malan Quay. Whether such a facility will ever be built appears unlikely due to the development of the Port of Ngqura a mere 20km away. SECTION 2. FINANCIAL DATA SALES FORECAST (YEARLY) YEAR YEAR YEAR SALES 1 2 3 FINISHED GOODS 34560 51840 69120 SPEAR PARTS 5184 7776 10368 SERVIES. 6912 10368 13824 TOTAL SALES 46656 69984 93312 YEAR YEAR YEAR DIRCT COST OF SALES 1 2 3 FINISHED GOODS 15552 23328 31104 SPEAR PARTS 2332.8 3499.2 4665.6 SERVIES. 3110.4 4665.6 6220.8 TOTAL DIRECT COST OF SALES 20995.2 31492.8 41990.4 TABLE 5. SALES FORECAST YEARLY TABLE 6. PL MONTHLY TABLE 7. BALANCE SHEET TABLE 8. BREAK EVEN POINT fixed cost per month AMOUNT Sales 3888 Profit 214 variable cost @ 30% 1166 fixed cost per year 2507 TABLE 9. BEP FIG. 19. BREAK EVEN POINT FINDINGS AND SUGGESTIONS From export plan it has been found out that India and South Africa both are having several needs which are being fulfilled by export or import only. Only their own capacity doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t fulfil their requirements. India and South Africa is doing trade from many years and both are part of several committees like BRICS, which focuses on finding ways to increase export-import opportunities. It is found out that industrial growth of India is high, as compared to the other developing countries, because of that development in the electrical electronics industry is at faster rate as compared to South Africa. Export procedure of India requires documentation and many other things which demotivate some businessman not to do business in other countries. Export procedure can be created as such that it can be easy to understand and procedure can be completed in lesser time. Initiatives taken by government through providing different schemes to exporters helps companies to g et initial benefit of cost and they can be able to work in better way as they are getting financial benefit in some or the other area. EXIM Bank is one of the most important institute supporting for the export for Small and Medium enterprise. SUGGESTIONS: Neither for South Africa nor for India, each other are main trade partners; but they are doing business with other countries so some ways can be found out for both countries to be in win-win situation and by that both could have better trade relations. As company is going to analyse market for three, they can plan to go public if they find huge opportunity in South African market. As company is going to supply 100 kVA diesel set generators it will be good opportunity to company for analysing the demands of the generators set and thus can expand its product line. If there is any kind of opportunity after three year and if company can able handle they can definitely plan to have warehouse in South Africa and after that they have to deal with human capital at South Africa. There is huge scope in the service industry as well as in the recycling of the diesel set generators so the company can initially analyse the scenario and then can enter into that business also. CONCLUSION Now a days, almost each and every organization needs consistent power supply as data loss can be more expensive than the capital expenditure required for backup power equipment. Globally, power demand is increasing rapidly, while supply is not growing at the same pace, thus creating huge power deficit in many parts of the world. Consequently, the demand for power generation equipment such as diesel generators continues to increase worldwide. Poor power infrastructure and unreliable grid power supply have been largely responsible for increasing frequency of power outages, which is likely to boost the demand for diesel gensets across the globe. The global market for diesel gensets is largely dominated by Asia-Pacific due to rapid urbanization and industrialization in this region, with China and India emerging as the largest revenue contributing countries in the regionà ¢Ã¢â€š ¬Ã¢â€ž ¢s diesel genset market. Electrical Industry supply diesel generators for virt ually every market sector. The one common denominator is the requirement for efficient, reliable power à ¢Ã¢â€š ¬Ã¢â‚¬Å" either for prime power or on standby. OPPORTUNITIES: If you can identify a product that is produced particularly well in your country, but does not yet exist in a country where it will be demanded, this provides a perfect business opportunity to export it before somebody else does, or before the destination country starts producing it themselves. South Africa is a country of 50 million people that is rich in diverse cultures, people and natural heritage. Enjoying remarkable macroeconomic stability and a pro-business environment, South Africa is a logical and attractive choice for U.S. companies to enter the African continent. It is the most advanced, broad-based and productive economy in Africa, and has a gross domestic product (GDP) of $363.7 billion in 2010, or about one third of the total GDP for sub-Saharan Africa region. Over the last five years, th e annual growth of South Africaà ¢Ã¢â€š ¬Ã¢â€ž ¢s GDP has averaged 3.2 percent. This creates opportunity to export in south Africa. Rising Urbanization, growing consumerism and increasing infrastructure investment is the great opportunity to export in South Africa. Growth in Electrical industry and other industry where product can be used: Analysis shows that South African Electrical industry is at growing stage and it has opportunity to grow; which indicates that demand of high electricity supply ,which inturns will lead to demand of diesel set generators. Thus can expand its product chain too. Growing import of chemical in South Africa from India: As the electrical industry is growing in South Africa import of electrical products from India is also increasing. Trade data of electrical industry of India and South Africa shows that how the trend is showing growth in the electrical and electronics import by South Africa from India. Also the service sector of diesel set generator is the important area for the expansion for the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s business. and also the recycling of diesel set generator business is having prominent growth in future in south Africa. Support from government and other associations: Government and different associations are supporting the export from India to South Africa. They are providing support through monetary and non-monetary bases. Support includes incentive to export, help in export procedure, deduction in charges, reimbursement in certain costs, support at South African trade fairs, etc. As the demand for gensets in Africa has a growing trend, it creates opportunity to export gensets in Africa. Unemployment, at a rate of 25 percent, remains South Africaà ¢Ã¢â€š ¬Ã¢â€ž ¢s largest social challenge. Hence, if we set up our plant in South Africa, then also we will be able to get manpower easily. Importing and exporting increases consumer choice of products and services. Consumer choice is a strong point of competitive advantage for a company and is valued so highly by society that it is included in international measures of welfare. Exporting can allow for a country or industry to carry on p roducing at a lower cost. Costs of production are a large determining factor behind the competitiveness and profitability of a business. The wise exporter will seek to take advantage of differences in prices around the world to help these benefit local or foreign firms. As producing DG sets in our own country and then exporting to South Africa reduces cost, it is wise to export directly to South Africa. ANNEXURE Bibliography Arora, M.N. 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