RMG SD Doc 12 06 2014

Directors: Rolf Ramakers, Klaus Peter Hoffmann** Eric I Cohen*, Kevin Bradley* (*= USA, **= German)

VAT no.: 4260240645 Company Registration no.: 2007/015496/07

Terex Port Equipment Southern Africa (Pty) Ltd 1A Transport Drive, Prospecton 4133. South Africa PO Box 191, Umbogintwini, 4120. South Africa

Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220

SUPPLIER DEVELOPMENT PLAN

for

Design, manufacture, delivery, erection,

testing and commissioning of two

Electric Rail Mounted Gantry Cranes for

Durban and inclusive of training.




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Letter of Award




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VISION

To design, manufacture and successfully deliver the RMG’s.

To meet and exceed TPT SD requirements.

To reduce capital leakage of foreign currency out of South Africa.

To maintain, preserve and create local job opportunities that

contribute and enhance government initiatives and plans.

Contributing to the development of capacity of local industry to

showcase our diverse knowledge and skill to compete

successfully on the world stage.

]




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220

SD Initiatives

Localisation.

Technology transfer.

Sustainability.

Skills development.




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220

SD Plan Values

Total % SD of Contact Value Initiative Total Value

Actual spend for the year ended 31 March 2014

Localisation R 37 977 000.00 R 24 077 209.00

Technology Transfer/ Sustainability R 6 778 800.00 R 6 337 779.75

Skills Development R 727 200.00 R 0.00

Total R 45 483 000.00 R 30 414 988.75




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RMG Crane design




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Manufacturing in JHB




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Challenges of manufacturing in South Africa

Capacity

Manufacturing expertise

Qualified employees

Logistics

Sourcing local suppliers

Local suppliers maintaining OEM standards

Export/Import Costs (Exchange Rates)

Lack of competitiveness amongst local suppliers to

compete on the world stage with international

counterparts.




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Overcoming challenges of manufacturing in South Africa

Developing and Enhancing our Capacity through technology transfer

and exchange from OEM’s

Manufacturing expertise Development through exchanging ideas and

sharing technological advances in the manufacturing sector.

Creating Qualified employees through training initiatives provided by

the OEM’s as well as looking at local institutions capable of providing

similar training as required by OEM.

Setting up of local branches/agencies to handle logistics in areas of

influence; as this will cut down on lead times from manufacture to

customer

Developing local supplier capacity through OEM Initiatives/IP transfer

OEM approval of identified supplier capacity will ensure Local

suppliers maintain OEM standards.




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220

Assembly of 1st RMG at Durban Container Terminal. 3rd June 2014




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220

Successes

Capacity

The Terex Material Handling and Port Solutions factory in Boksburg had the size

and the engineering equipment to build these cranes. The challenge was for the

team members to recognize and achieve this. We did it!

We employed and trained a number of additional team members, we

worked a lot of overtime and the whole team pulled together to achieve our vision.

This knockon effect ensured people kept their jobs and created more job

opportunities.

Technology Transfer

Together with our Terex partners in Germany, China and India we brought into

South Africa the latest engineering, electrical, manufacturing, safety and quality

standards as employed globally by Terex. This ensures that Transnet Port

Terminals has a state-of-the-art RMG.




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Successes (continued)

Localization

In order to achieve the required commitment, Terex developed and utilized a

number of South African companies as prime suppliers for this project. Going

forward these locally developed suppliers will be the backbone of the component

supply chain for maintenance (after sales support) of these (and future) RMG’s

manufactured in South Africa. This ensured technology transfer from the OEM’s to

local industry as well as to our own Terex factory. This process ensures that local

suppliers achieve and maintain global standards for the original manufacture as

well as going forward.

The extent of this localization drastically reduced the Capital Leakage of South

African currency Local Capacity Building. This meant that Transnet invested

capital back into a locally based company to manufacture the RMG locally which

reduced costs as there was no foreign currency needed to purchase the items




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offshore as well as saving on import costs.

This project has created opportunity for a number of South African

enterprises to benefit through the supply of components, transport and logistics,

skills transfer and training.

As a result we proved that we have the ability to produce state of the art

equipment locally and improved our strategic position being able to compete

with our counterparts from Europe and Asia to supply more equipment into

Africa and the world; increasing our competativeness on the world stage.

This will lead to sustainable growth of the economy and contribute to

meaningful jobs and oppertunities for people in our industry and sphere of

influence; that support government economic growth initiatives.




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220

The Future

Manufacture for export to other parts of the world from South Africa.

Increase factory capacity; development and exchange of technology/

IP Transfer from OEM to locally established businesses/suppliers.

Development of established local agencies to reduce lead times of

agreed manufactured components from manufacture to customer.

Meeting SD requirements of Transnet

Capital Leakage for Foreign currency kept to a minimum

Contribution to local training initiatives /OEM support to empower

employees /trainees to become more skilled in their field of operation.

Contribution to the sustainable Job creation / preservation initiatives




Phone: +27 (0) 31 902 4351 Fax: +27 (0) 31 902 8220

Current Terex SD Initiatives RMG’s (Durban) 84% achieved to date

Straddle Carriers (Durban and Cape Town) 73% achieved to date.

Bulk Operating System (Saldanha) 100% achieved

Forklifts (Richards Bay) 91% achieved to date.

Documents

RMG SD Doc 12 06 2014