TRANSPORT: Cargo Carriers Beats The Trend
Recent Western Cape Business News
2010 is proving to be a year of high growth for supply chain and logistics service provider Cargo Carriers. In a year where many in the logistics industry are still reeling from the recession the company is having its best ‘new business year’ for 20 years.
Amongst the several new business contracts the company has secured is a 50-50 equity deal with Caltex Eastern Cape Marketer (CECM) to establish a new transportation business aptly named Khanya Carriers (Khanya means to shine) for the distribution of Caltex fuels and lubricants into the rural Eastern Cape.
CECM was established after concluding a deal with Chevron, the brand manufacturers and distributors of Caltex products in South Africa, for the transport and distribution of all fuels and lubricants throughout the rural Eastern Cape in December 2005. Initially the company supplied fuel to 35 Caltex service stations and relied on existing Chevron transporters for their distribution, as well as third party service providers.
With CECM having increased their footprint and the number of service stations to 46 in and around the Eastern Cape; intensified focus and guidance from Chevron for higher Safety, Health, Environment and Quality (SHEQ) standards; as well the need to optimise their transport solutions to efficiently service a wider area and a growing number of service stations, CECM opted to redefine the way they distributed their fuel and lubricants. They wanted more control over the transportation function, and needed to find a partner with the highest SHEQ standards, fuel experience as well as reliability, and as importantly in these uncertain times, a strong balance sheet.
“We did not want to simply contract out our last mile distribution; we wanted to form a partnership with a company who would be with us for the long haul, and would be committed to achieving long term growth. Some of the non-negotiable factors in selecting a company to enter into a partnership with were a high SHEQ score, a national footprint, and uncompromising reliability and integrity,” says CECM director, Clive Berlyn.
With its extensive network, more than 50 years experience in the transport industry and impressive SHEQ and B-BBEE scores Cargo Carriers was identified as the ideal candidate.
“Negotiations led to the signing of a 50-50 equity deal, and Khanya Carriers was born. Management of the new company falls under the control of Cargo Carriers, and operations currently include the use of eight dedicated bulk tankers to service the area,” says Cargo Carriers chief operating officer, Johan Kruger.
“Not only does Cargo Carriers have a solid track record in the handling and distribution of fuel in remote areas and superbly high SHEQ scores - which are imperative when dealing with hazardous materials; the level of technical expertise and integrity of their staff is exceptional. Two further benefits of this partnership are that Cargo Carriers is a level 5 B-BBEE contributor with an expectation that this will improve to a level 4 during 2011, which supports the B-BBEE policies of Chevron as well as CECM. There is also an excellent fit between the two businesses in terms of company culture,” says Berlyn.
For Cargo Carriers the partnership with CECM and the resulting establishment of Khanya Carriers comes at a perfect time in terms of the company’s current high growth strategy.
“The strengthening of our balance sheet over the past two years has not only put us on the acquisition trail, but provided us the opportunity to enter into joint ventures such as the one we have with CECM. This equity partnership allows us to further expand our footprint in the fuel industry and opens up opportunities for us to partner CECM in their expansion, and to work with other fuel companies interested in contracting out their last mile distribution,” says Kruger.
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