Page 111 - Risk Report 2024

7. Energy 8. Logistics

The National Energy Crisis Committee has made progress Private sector partnerships are an important option, e.g. Sasol and
to implement the Energy Action Plan, to end load shedding, Transnet Freight Rail (TFR) have formed a pioneering public-private
expand generation, and reform the energy sector. Eskom's partnership to enhance rail transport reliability. Over a five-year
Operational Recovery Plan reduced unplanned losses by 3GW period, Transnet will transport product from Sasol's facilities to
and increased planned maintenance by 12%. Medupi Unit 4 is customers using a dedicated fleet of tankers, aiming to minimise
set to return in September 2024, and Kusile Unit 6 in October disruptions in product and materials transportation. Transnet has
also appointed new leadership and finalised a partnership with a port
2024, further bolstering supply. Progress has been made to build operator from the Philippines. Additionally, positive developments
significant new generation capacity. The Eskom Kenhardt Solar include Transnet National Ports Authority's commitment to develop
Project is operational, adding 540 MW of solar capacity and KwaZulu-Natal Logistics Hub, featuring new container terminals,
225 MW of battery capacity. The establishment of the National upgraded roads and port security, and the relocation of the SA Navy
Transmission Company of South Africa (NTCSA) has occurred, base from Salisbury Island to Richards Bay's Naval and Pelican Islands
and the ERA Amendment Bill remains on schedule for tabling in by 2030. Transnet withdrew a request for quotes for an operating lease
the current Parliament. This paves the way for a market allowing on a freight-rail artery linking Durban to Johannesburg due to changes
for the buying and selling of electricity. Eskom launched Market in national transport policy, including separating rail operations from
Codes in April 2024, to govern this market, with plans to submit infrastructure. Transnet needs to reassess its process for introducing
them to NERSA for approval alongside the NTCSA trading licence private partners. Investors are exploring building a Botswana rail line
to bypass SA and Transnet inefficiencies, as regional countries seek
application post ERA Amendment Bill enactment. All of this will better global market access. Transnet aims to increase its main coal
alleviate the extensive pressure on manufacturers, which in export corridor's capacity by adding fourteen extra trains per week,
turn will alleviate economic growth pressures. though challenges persist in moving coal to ports for export despite
more locomotives becoming available.

9. Food Security 10. Climate Change
A severe shortage of food will impact the sector through Climate risks to manufacturing businesses include meeting
the impact on its workforce and the rest of society. Food anticipated legislative and policy requirements, increasing
manufacturers, cold storage providers, and food transporters operational costs to reduce emissions, and adapting to
are impacted by all the risks in this report. physical impacts. Identifying appropriate responses that drive
sustainability through economic development, job creation,
energy security and environmental efforts is a pivotal task
within this sector. The Climate Change Bill has been approved by
the NCOP. When the bill is enacted, carbon budget regulations
will be implemented, making it mandatory to comply with an
allocated carbon budget. Global carbon emissions (together
with the related financial and credit risks) continue to rise. To
meet global goals, investment is required in climate change
adaptation and resilience as well.

11. Technology 12. Skills

Business interruption resulting from a successful cyberattack, Persistent challenges to attract and retain skilled resources
will be damaging in the extreme to large manufacturers. require of manufacturing companies to invest in training,
upskilling, and mentorship programs to develop a competent
workforce. By creating a positive work environment and
fostering a culture of learning and innovation, companies
can improve productivity, quality workmanship, and overall
competitiveness.