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Case Title:

Transnet, The State-owned South African Transport and Logistics Group: Maria Ramos' Turnaround Strategies

Publication Year : 2006

Authors: Shahnaz, Sumit Kumar Chaudhuri

Industry: Transportation

Region:South Africa

Case Code: SCM0002

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
Transnet is a transport and logistics company controlled by the South African government. Started in the late 1850’s as a railway system, it got the company status in 1990. Being a government organisation, it suffered from inefficiency, bureaucracy and over staffing. In January 2004, Maria Ramos took over as the chief executive of the Transnet group. She implemented a four-point turnaround strategy for the revival of Transnet. She is overhauling South Africa’s largest transport company, which controls the country’s rail and port operations, divesting non-core assets, including South African Airways, embarking on a major capital expenditure program and improving customer service. Profits were up 57%, to $1.3 billion, for the fiscal year that ended March 31st 2006, on a revenue of $4.1 billion.

Pedagogical Objectives:

  • To understand the problems affecting the financial health of Transnet
  • To analyse the strategies implemented by Maria Ramos to turn Transnet around
  • To debate whether disinvestments and laying off employees are always the most useful tools to revive a company
  • To understand and analyse how a government-controlled company, if enthused and imbued with professional management, can be turned around into a profitable venture

Keywords : Public sector enterprise; South African Railways; South African Railways and Harbour (SAR&H); Metrorail; Overstaffing; Spoornet; Restructuring / Turnaround Strategies Case Study; National Ports Authority; Restructuring; Spin offs; The Blue Train; Revival strategies; Worker opposition

Contents:

  • Transnet: What Ailed the South African Transport and Logistics Giant?
  • Turning Around Transnet: Maria Ramos' Recipe

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