Dutch warehouser gets SA storage and forwarding firm

Dutch warehousing and logistics firm C. Steinweg has bought South Africa-based Nomad Freight, a private warehousing and forwarding company, the source said. In a letter sent by Steinweg and Nomad to their customers, and seen by Reuters, the South African company said it was "a good time to join forces and team up" with Steinweg, which has a vast global warehousing and logistics network in 32 countries.

Big trading companies and banks have been buying warehousing firms in a trend criticised by some metals traders, who fear conflicts of interests despite so-called "Chinese walls" that these companies implement as safeguards. Banks and trading houses have used the metal and its storage as a financial tool to boost profits; storing metal generates tens of millions of dollars in revenues. "Africa is a developing continent for resources, and Steinweg wanted to enter via an established market where cargo flows are already in existence," the industry source told Reuters. "That was the logic behind the purchase."

At the same time, London Metal Exchange (LME) regulations allow warehouses to release only a fraction of their inventories per day, leading to long delays in metal delivery. Steinweg is the only major warehousing and logistics firm that is registered with the LME and remains independent. It told Reuters in March it was planning to stay that way. According to its website, Nomad has a big interest in a warehouse operation in the South African port city of Durban. It also does export and import cargo forwarding, customs clearing and trucking services to and from resources-rich Zimbabwe, Zambia, the Democratic Republic of Congo and Malawi.

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