Stainless Steel Tank Containers (Comprehensive)

An asset-based Shari'ah compliant investment opportunity.

Al Baraka Bank has entered into a successful relationship with International Tank Containers (Pty) Ltd ( trading as Intertank), a specialist tank container investment management and marketing company that offers expert and unrivalled service in the tank container investment industry.

An Investment in tank containers is effectively an investment in world trade, with rental income protected from domestic uncertainties and the international erosion of the local currency. Tank containers are a highly profitable off-shore investment opportunity which provide the investor with an income flow derived from hard currency sources.

These factors, together with the tax efficiency of the investment, have resulted in tank containers becoming an integral part of overall financial planning for high net-worth individuals, professionals and entrepreneurs. It is also an attractive instrument in retirement and tax planning.

Stainless steel tank containers

Stainless steel tank containers, introduced to the market in the 1960's, offer an ideal form of intermodal transportation, avoiding the need to decant and transfer bulk chemicals, liquids and similar products between port, rail, and road links.
Over the years, these specialised tank containers have gained acceptance as the safest, most efficient, economical and environmentally correct method for the transportation of bulk liquids. The increasing popularity of tank containers, coupled with ongoing expansion in the international bulk transportation market, assures continued growth in tank container usage. The world population of tank containers is expected to grow at a rate of 10% per annum.

The South African Investor

A tank container provides one of the few proven off-shore investment opportunities open to South Africans, offering a 20 year plus rental income flow in dollars. In essence, the investor's return is based on a proportionate share of the rental from a dedicated Islamic pool of tanks, and not from any one tank in particular.
Rental returns have been consistent over the years, and are paid quarterly in arrears. Historically, net cash rental returns on a sample range of tank containers investments, taking into account depreciation allowances, have averaged over 14% per annum after tax. Over the long term, increased rentals returns are likely to be earned due to the following factors: international inflation, increased demand for the use of tank containers, devaluation of the Rand against leading international currencies, raw material costs and related increases resulting in higher unit prices for new tank containers.
In South Africa, the full amount of the investment in one or more tank containers cab be written off on a straight-line depreciation basis over five years, in terms of Section 11(e) of the Income Tax Act.

Acquisition and ownership

Through Al Baraka Bank the purchase price of the container/s is deposited into the Intertank bank account. Intertank pays all related costs and takes delivery of the container on the investor's behalf. A certificate of ownership in the name of the investor is then issued by Intertank. In accordance with the exchange control regulations, the original ownership certificate is lodged with Intertank's bankers, The Standard Bank of South Africa Limited. The investor will receive a certified copy of the certificate as proof of ownership. The Islamic pool; of tank containers will have its own manager appointed by Intertank, who will lease these containers to end users. The income from this rental is divided, after deduction of expenses, amongst the respective investors, in proportion to the number of tanks that they own in the pool. Even if a particular investor's tank container happens to be out of active use for some time, the investor can still be sure of an Islamically acceptable return.

There are two ways of financing the investment. The first is to invest the full amount as a cash purchase. The second is to apply to Al Baraka Bank for finance. Al Baraka Bank can effectively implement the Murabaha sale with repayments on an instalment sale basis, as a method of financing the investor's purchase of tank containers. As a result, investors can earn hard currency rentals returns without initially divesting themselves of large amounts of capital. The profit payable on the financing is also tax deductible.

In a Murabaha transaction, ownership of the asset is transferred to the client immediately. All parties agree at the outset of the Murabaha contract on the profit mark-up, the period and terms of repayments. These terms cannot be changed for the duration of the transaction. Since the price and instalments are fixed at the outset of the transaction, profitability is easier to predict. A statement detailing rentals, costs and fees, is issued every quarter. Rental income distributions made by Intertank can be paid in SA Rands at the ruling exchange rate or alternatively, retained off-shore.

Al Baraka Bank

Al Baraka Bank was registered in South Africa in 1989 in response to the need for a system of banking in line with Islamic economic principles. The Bank is jointly owned by South African investors and the Saudi Arabian based Dallah Al Baraka Group, which has established one of the largest international Islamic banking groups in the world with banks and finance houses worldwide. Al Baraka Bank has the additional advantage of being able to draw on the vast experience and expertise of the Dallah Al Baraka Group. Al Baraka Bank is therefore well placed to assist both local and international investors who wish to take advantage of the opportunities that arise in the changing South Africa.

Locally all the bank's products and services have been developed in a manner that promotes the understanding and adoption of Islamic banking and economic principles, so as to contribute to the socio-economic development of the Muslim community and the country as a whole.

Al Baraka Bank, is a pioneer of Islamic banking in South Africa, has considerable expertise in the finance and investment fields. Al Baraka operates nationwide with branches in all major business centres -Durban, Cape Town, Johannesburg and Pretoria. Each branch provides a comprehensive range of banking services including investments, trade financing, project financing and asset-based financing. Al Baraka Bank is thus strategically positioned to serve the diverse needs of the South African market.

Al Baraka has experienced tremendous success in gaining the confidence of the community.
The impressive track record and growth of profit-orientated Islamic banking is a viable alternative to interest-based banking is tangible proof of the market's acceptance of this alternative system of banking.

Intertank

Intertank is a subsidiary if JSE-listed IOTA financial Services Ltd. Through its close relationships with accredited marketers such as banking groups, stockbrokers, trust companies, financial service brokerages, auditors and accountants it offers a service unequalled in the industry. Intertank is based in Johannesburg, Cape Town, Durban and London. Since its inception 1991 it has enjoyed close working relationship with Consani Engineering (pty) Ltd, and more recently Welfit Oddy (Pty) Ltd, a member of the Burg Group. Consani Engineering and Welfit Oddy, based in the Cape, are the leading manufacturers of tank containers in the world, and currently supply over 50 % of annual international demand.

Intertank's relationships with these companies, together with long-standing agreements with six international tank container management companies in America and Europe, enables it to offer a professional service of outstanding quality to its Muslim investors. Truly global representation allows it to maximise clients' long-term investment returns.

With Intertank, investors and brokers are assured of a professional service built on the company's unquestioned integrity and ability to provide investor security.

Click here to contact us and find out more about investing with Al Baraka Bank.