Mark Sessions tells Supply Chain Digital how the site operates today: “We are essentially a distribution terminal where we have three logistical means: We receive product, either by ship, by rail or by road and we also distribute product by ship, rail or road.”
Within the import/export industry, Sessions explains, there are more imports of petroleum products, while the chemicals sector relies on exports and distribution.
He joined the company in early 2008, having spent some time as Group Financial Manager of a sawmilling group based outside Durban. “It was a personal move into Durban,” Sessions reveals. “Really, I was looking for a much larger, internationally based company to expand my horizons.”
As part of a service industry, Vopak lists customer care and service, as well as compliance with international safety standards, as vital if it is to compete with the dominant names in the industry. At no point has client interaction been more important than during the economic downturn. Sessions admits that the recession has had the biggest impact on the chemicals market. “Obviously, chemicals are used in the process of manufacture and, all round the world, manufacture has taken a knock,” he says. “We see a slower movement of product through our terminal on the chemical side.
“There is less product coming in and being stored in the tanks; and that product is taking longer to be distributed out.”
In response, the terminal in Durban has changed its contract structure so that revenue is on a more fixed basis, eliminating the risk, as far as possible, of variable income. Such flexibility allows the company to negotiate customers’ contracts and provide a more bespoke service.

Expansion plans

Aside from the impact of the global economic crisis, Vopak has identified a much more significant challenge to overcome. “Probably the biggest challenge we are facing is that in Durban itself, at the port here, there is a severe shortage of land available for bulk liquid storage,” Sessions explains. “There will be limited space given to bulk liquid storage, so our main goal now is to optimise the space that we have.
“It’s a three phase approach and it’s our future expansion programme for the next three to five years.”
Currently, the terminal operates a range of tank sizes but the smaller tanks will soon be replaced with larger tanks. The driver behind this optimisation is to increase Vopak Terminal Durban’s storage and handling of petroleum products.
The construction of a new multi-product pipeline running from Durban to Johannesburg will aid in the delivery of petroleum products to the northern regions of South Africa, where the majority of fuel consumption in the country exists.
By being able to connect to this pipeline, Vopak Terminal Durban will be able to more efficiently co-ordinate the delivery of petroleum products to the northern region. The process should be underway in June 2010.
In the meantime, the company is awaiting Environmental Impact Assessment (EIA) approval, expected by November this year.
As part of its development, Vopak will also be required to remove non-core activities from the port in Durban in order to earn revenue from core operations only, such as storage and handling.
Sessions believes the expansion plan will put Durban on the map as the “terminal of the future”. “Along with the bigger tanks, we will construct a new road loading gantry at one of our sites, which will be fully automated,” he adds. “So turnaround times at the terminal will be significantly less and result in us achieving one of our customer service
goals.”
A recently constructed loading point specifically for petroleum has already reduced turnaround time from 90 minutes, to just over half an hour, according to Sessions.

RICHARDS BAY
“One of our other expansion plans is to build a new terminal in Richards Bay, which is about 300km north of Durban,” says Sessions. “We’ve submitted a tender and been shortlisted. We are awaiting approval from the port’s authority that we’ve been awarded the land.”
Construction of the terminal is expected to begin in 2011, and reach completion in 2014. Once operational, the Richards Bay terminal will provide the company with a capacity of 250,000 cubic metres. However, Sessions explains that it will have the ability to increase to 500,000 cubic metres at a later date.
In terms of suitability, the Richards Bay site has several advantages: “It’s the port with the most land available and it’s deep enough to facilitate larger vessels,” says Sessions.
Its location means Vopak can utilise the terminal for large breakbulk goods and as a stop-off point for smaller parcels on the way to Durban.
“Richards Bay gives us a mid-point where we can have a larger storage capacity than we have in Durban, and also to realise synergies that exist by having the two terminals,” he continues.