Grindrod will roll out an R8-billion multiyear programme to scale up its business in South Africa and Mozambique.

This comes amid a softening in the global commodity cycle, as well as social upheaval in Mozambique following its 2024 national elections.

Announcing Grindrod’s financial results for the year ended December 31, CEO Xolani Mbambo said the capital allocation would be split 50:50 between South Africa and Mozambique, in recognition of the need to create balanced exposure to the two countries.

He added that Grindrod had been present at the Maputo port since 2005, and had seen numerous administration changes in Mozambique.

This said, the losses attributed to subsequent intermittent border closures between the countries stood at 4.4-million tons of goods and R200-million in headline earnings for the 2024 financial year.

Mbambo said Grindrod’s refined strategy would see the group focus on the areas of bulk cargo, logistics, containers, and rail.

Capital spend included R1.4-billion to buy the remaining 35% stake in the Matola terminal.

The terminal, a private entity in Maputo, operated a dry bulk terminal with yearly export capacity exceeding seven-million tons. It specialised in commodities such as magnetite and coal.

The deal should be completed before the end of June.

Following this, the plan was to spend R1.5-billion to upgrade the terminal over the next three to six years, including the acquisition of a new ship loader, to bump up volumes.

In terms of rail, Grindrod would spend R1.2-billion to participate in rail network opportunities, especially in South Africa, where the network was being opened to private operators.

The time frame for this project was one to three years.

Mbambo said Grindrod was already a train operating company, with a fleet of 41 locomotives, three shunt locomotives and 88 wagons.

The group was busy refurbishing 13 locomotives repatriated from Sierra Leone for potential participation in private-sector concessions in South Africa’s rail network.

Grindrod would also seek to acquire new rolling stock to increase its reach in the domestic rail network.

“There is a buzz in the market around rail, and there seems to be some meaningful progress,” said Mbambo.

Last year Grindrod was selected by Transnet to build and operate a container terminal in Richards Bay.

In light of his, the company had allocated R500-million to the Richards Bay container facility to upgrade infrastructure and mobile equipment.

The last part of the JSE-listed group’s strategy revolved around mergers and acquisitions, with R3.5-billion set aside in a one- to three-year horizon for what would largely involve the acquisition of stakes in other businesses, said Mbambo.

He added that the short-term outlook for Grindrod was “bumpy”, owing to the downturn in the commodity cycle, especially in terms of coal, lithium and graphite, but believed that the medium- to long-term prospects were “exciting”.

Grindrod on Thursday reported a 2% drop in core revenue for the financial year ended December 31, to R7.4-billion, compared with the previous year.

Core trading profit was down 20%, to R2-billion.