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- SA’s boat-building industry is growing nicely again after a lull during the Covid-19 pandemic.
- SA ranks second in the world for building catamarans, for example.
- But the loss of AGOA benefits would hit job creation hard, the industry says.
- For more financial news, go to the News24 Business front page.
The South African boat building industry is booming again after a pandemic slowdown – but the loss of US duty-free access will hurt.
Bruce Tedder, chairperson of the South African Boatbuilding Export Council (SABBEX), estimates that the local industry currently completes more than one boat per working day. SA ranks second in the world for building catamarans, after France.
About 300 craft were launched last year at an average price of about $500 000 (just over R9 million) each.
“Our boats are award-winning, world-class, and well-built. Most of the designs, sails, and other equipment are also locally manufactured,” says Tedder.
“Worldwide, there has been a huge post-Covid-19 boom, and in SA we are getting our good share of this. Private yacht sales are booming, as folks travel in a safe ‘bubble’,” says Tedder.
Also, after the pandemic, the charter sector has bounced back.
“Fleets need to be upgraded, so the charter companies are buying big time. Demand exceeds supply, with order books for most of our builders now running for two to three years. Boom times indeed, but years in the making,” says Tedder.
According to Wesgro, the official tourism, trade, and investment promotion agency for the Western Cape, the vast majority of boats built in the Western Cape are for the export market. Wesgro data shows that the sector has had post-Covid-19 growth rates of 20%. As of 2023, the industry is worth about R3 billion. SA was ranked as roughly the 18th biggest exporter of recreational boats worldwide in 2021.
The top export markets are the US (R1.4 billion), Italy (R840 million), the British Virgin Islands (R472 million), France (R319 million), and Turkey (R126 million). The Western Cape is SA’s boatbuilding hub, accounting for an estimated 70% of the country’s marine manufacturing capacity. Most boatbuilding companies are based in Cape Town, but there are also boatyards in St Helena Bay, Saldanha Bay, Swellendam, George, and Knysna.
However, the potential loss of South Africa’s access to duty-free benefits according to the African Growth and Opportunity Act (AGOA) will be painful as AGOA benefits SA boat builders.
A bipartisan group of top US legislators is demanding that this year’s AGOA summit be moved away from SA and warned that the country is in danger of losing its AGOA status due to SA’s friendly stance towards Russia.
SABBEX recently hosted a delegation from the US to illustrate the importance of AGOA for the local industry, especially job creation.
“The negative impact, should SA’s boat building industry lose access to AGOA, would be the impact on job creation. With the industry growing, we see more job creation in the sector and a commitment from boat builders to upskill staff qualifications. It was this likely negative impact of job losses which mostly concerned the US delegation we hosted,” says Vanessa Davidson, a manager at SABBEX.
“We are batting for Team SA and have a positive trade balance of 85% of our products being exported.”
Alderman James Vos, the City of Cape Town’s Mayoral Committee Member for Economic Growth, says the loss of AGOA trade revenue and investments would deal a massive blow to Cape Town’s boat-building industry.
In 2021, the US ranked as the Western Cape’s biggest export market. It is also one of the biggest sources of foreign direct investment and tourism for the province.
“There are still a great deal more opportunities for Cape Town to seize on in terms of the US market. We must do all we can to make sure that SA remains part of AGOA and that we seek out further opportunities with the North American market,” says Vos.
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