ISSN 2412-7779

Cold Link Africa Online

REGULARS

INCORPORATING COLD CHAIN

Cold Link Africa ColdLinkAfrica

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VOL . 38 - NO . 1 | MARCH / APRIL 2024

REGULARS

3 Editor ’ s column 33 Products 34 Buyer ’ s guide 35 Word search

NEWS

5 Congestion at Cape Town ’ s Port imperils entire cold chain 6 How can the private sector shape itself in the supply chain profession ? 7 Research project ENOUGH publishes scientific outcomes and political appraisals

INTERNATIONAL NEWS

8 Addressing cold chain challenges for Africa ’ s fresh produce exporters

FEATURES

13 Supe rmarkets opt for SA ’ s cutting-edge green chill

BUSINESS AND TRAINING

19 Revolutionising green logistics with solar-powered refrigeration transport 21 New occupational qualification for the HVAC & R sector

EVENTS

22 HERVAC design , technology and trends – it ’ s all at FRIGAIR 2025 !

PROJECT

23 Supermarket chain modernises store with eco-friendly refrigeration

CONTRIBUTORS

27 Site emergency response training with AMC Engineers 29 Moving towards Industry 4.0 and other transformative trends in

2024 30 Refrigeration Practitioner registration – 05

TECHNICAL

31 Supermarket refrigerant leak solutions

We want to showcase your projects ! Get in touch : eamonn @ interactmedia . co . za

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Cold Link Africa Supplied by Just Refrigeration Supplied by MSA Safety

The Economist ’ s Big Mac index is another indicator . An update of this index recently indicated that the rand is undervalued relative to the dollar by as much as 46 %. Further evidence of the dead weight of government ’ s poor governance is that at the beginning of 2024 , the IMF calculated the exchange rate at R7.17 per dollar on a purchasing power parity ( PPP ) basis – which is what the Big Mac index is on a simplified basis . In reality , the currency is now sitting at nearly R19 per dollar – which is pretty much what the rest of the world thinks of South Africa ’ s long-term policy-making .

A few brave souls like myself even venture that the rand can recover every time it plunges on the back of bad news , only to be disappointed .

The Big Mac index is a simple and straightforward comparison of the price of the popular McDonald ’ s hamburger in different countries in local currencies , assuming that the burger is exactly the same everywhere and can be used as a benchmark to calculate a ‘ correct ’ exchange rate . According to this , the rand should be at R9.31 per dollar indicating plenty of scope for the rand to recover significantly .

The rand ’ s weakness mainly reflects a sharp rise in the country ’ s risk premium after South Africa lost its investment grade status by all major rating agencies in 2020 , which was further reinforced by the country ’ s greylisting by the Financial Action Task Force in 2023 , the sharp deterioration in our fiscal metrics and more recently concerns about South Africa ’ s geopolitical alignments with totalitarian countries such as China , Russia , Iran and their ilk . Argentina for one recently refused to join BRICS and be associated with this grouping , as we should . These are countries which still behave as liberation forces against the status quo – rather than as status-quo governments .

The rand ’ s value in practice reflects foreign and local investors ’ assessment of South Africa ’ s relatively higher risk and lower returns than other key emerging markets , which in turn is reflected in the fact that private sector investment in major projects within the country has virtually collapsed to nil .

The difference between the PPP fair value and the actual exchange rate for the rand suggests that factors like capital flows and trade flows have made the rand weaker . Additionally , the market predicts that the country ’ s inflation differences will worsen . In theory , a PPP exchange rate only considers yield differences , excluding other factors like political risk , economic outlook and capital flight . However , the actual exchange rate takes all these factors into account , resulting in its current weakness .

Only once perceptions improve for South Africa ’ s economic growth and interest rate differentials – the critical drivers of the exchange rate over the medium to longer term – are investors likely to feel adequately compensated for holding rand-based assets and vice versa .

For example , intra-African trade ought to be one area where South Africa could have an advantage . But government ’ s geopolitical alignments seem destined to exclude us from major trade groupings as even the rest of Africa is not prepared to take on the US and EU .

Africa , with the world ’ s youngest population and growing urbanisation rates , boasts an attractive market – both as a global trade partner and within the continent – with intra-African trade expected to increase at a compound annual growth rate of almost 4 % over the coming years . Logistics will continue to play a pivotal role in facilitating and enhancing intra-African trade and in connecting Africa and the world , with the African logistics industry expected to double over the next 3 – 5 years . This could be of enormous benefit to the African cold chain . However , regional supply chain pressures , such as inefficient infrastructure and high logistics costs of 2 – 3x more than leading global economies , significantly impact food and trade inflation , amplifying challenges in a region already facing complex dynamics , including political instability and elections in some African countries this year , climate change , food security challenges , global geopolitical tensions , as well as inflation and currency headwinds .

The most prominent supply chain trends for SSA in 2024 focus on building resilience and sustainability , economic sensitivity , flexibility and leveraging technological innovation for increased visibility . CLA

Eamonn

EDITOR ’ S COLUMN

The Big Mac index is a simple and straightforward comparison of the price of the popular McDonald ’ s hamburger in different countries in local currencies