http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.04Change: -0.16
R/$ = 12.07Change: -0.10
Au 1204.60 $/ozChange: 1.40
Pt 1170.50 $/ozChange: 4.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 28, 2012

Aluminium industry growth slowly recovering

Back
London|Africa|Aluminium|Building|Education|Environment|Eskom|Nuclear|Packaging|Projects|Rolling Stock|rolling-stock|System|Training|Transnet|Welding|Africa|Europe|China|India|South Africa|United States|International Aluminium Institute|Southern African Institute Of Welding|Automotive|Energy|Energy Intensive|Equipment|Gross Domestic Product|Manufacturing|Manufacturing Country|Nuclear|Packaging|Product|Products|Scrap Metal|Services|Steel|Steel Weighs|Infrastructure|Mark Krieg|Power
|Africa|Aluminium|Building|Education|Environment|Eskom|Nuclear|Packaging|Projects|Rolling Stock|rolling-stock|System|Training|Transnet|Welding|Africa||||Automotive|Energy|Equipment|Manufacturing|Nuclear|Packaging|Products|Services|Steel||Infrastructure|Power
london|africa-company|aluminium|building|education-company|environment|eskom|nuclear-company|packaging-company|projects|rolling-stock|rolling stock|system|training|transnet|welding|africa|europe|china|india|south-africa|united-states|international-aluminium-institute-facility|southern-african-institute-of-welding-facility|automotive|energy|energy-intensive|equipment|gross-domestic-product|manufacturing|manufacturing-country|nuclear-industry-term|packaging|product|products|scrap-metal|services|steel|steel-weighs|infrastructure|mark-krieg|power
© Reuse this



Growth in South Africa’s aluminium industry has recovered slowly since the 2008/9 economic crisis, but volumes have not yet returned to pre-2008 levels, highlights Aluminium Federation of South Africa (Afsa) executive director Mark Krieg.

He states that certain industries that are supplied by the aluminium sector, such as packaging and consumer durables, continue to grow steadily, in line with the country’s gross domestic product.

However, growth in the automotive industry is worrying.

“The international automotive industry is showing signs of slowing, following several good years. The aluminium casting industry, which supplies the automotive sector, is also under pressure, as aluminium scrap is the main feedstock of the industry. It is losing volume owing to the cost of scrap. Scrap metal is exported by South Africa at an export parity price,” he says.

Krieg adds that the local automotive industry is important for the aluminium sector and that the industry and government have ambitious plans to double output in the next few years.

“The aluminium content in automobiles is increasing because aluminium weighs one-third of what steel weighs, so there is a clear weight advantage, which saves costs, fuel and carbon emissions,” he notes.

Further, Krieg states that the building industry is recovering slowly after building projects came to a halt, following the eco- nomic downturn in 2008/9. The recovery of this industry will impact positively on South Africa’s aluminium industry, as it is a key player in the building sector.

Meanwhile, he notes that administrative costs and stealth taxes for industry will increase, keeping pressure on the remaining manufacturers to be competitive with respect to imports.

“The effect is to turn South Africa from a manufacturing country into a consuming country, as it is already more of a consumer than a manufacturer,” he explains.

Krieg adds that global developments play a significant role in influencing South Africa’s aluminium industry.

“It is not anticipated that Europe will soon emerge from the current economic difficulties it is facing, but there is optimism in the US. The slowdown in China is likely to impact on countries that are reliant on commodity exports; however, as has previously been found, a reduced scrap aluminium price could offer opportunities for local producers to develop and pursue new markets,” he states.

Afsa works with the relevant government departments, such as the Department of Trade and Industry, to keep the interests of aluminium high on the agenda.

“We continue to profile and benchmark Afsa members and bring business opportunities to their attention. We will also pursue the designated product route to secure market opportunity for local suppliers and oppose lobbies that seek a moratorium on local content,” he says.

Environment

Krieg says the production of primary aluminium is energy intensive. However, 50% of the total aluminium used in manufacture, on average, is recycled aluminium, which halves the energy used in its production. Remelting secondary aluminium takes 5% of the energy used to produce primary aluminium,” he notes.

He adds that different processes have been developed over the years to combat aluminium’s carbon footprint, such as building new plants that are equipped with new technology to reduce energy use.

“A lot of work has been done by organisations like the International Aluminium Institute, in London, which has put initiatives in place to promote the recycling of everyday aluminium products, such as aluminium cans,” says Krieg.

He states that the recycling of aluminium is one way of reducing the manufacturing process’s impact on the environment.

Challenges

“Imports are a big challenge facing the industry. The proposed export duty on metal scrap has not been implemented, with various parties having [identified] numerous obstacles and raised concerns,” Krieg points out.

Further research on the scrap-metal value chain and the industries that depend on scrap metal has been proposed.

He adds that aluminium scrap-metal exports to countries such as India and China have increased by 26% to 41 000 t. The consequence of exporting aluminium scrap is that local foundries and smelters are closing down.

Education and Skills

Krieg says a large skills gap is emerging in the industry, as it is in others, as older people are retiring and the knowledge they have is not disseminated widely enough among the next generation of welders, apprentices and artisans.

The sector education and training authorities are doing a lot by developing the necessary curricula and training material through the Quality Council for Trades and Occupations processes, especially with regard to apprentices and tradesmen.

“Welding courses are offered by the Southern African Institute of Welding, which is where we refer welders to learn welding skills pertaining to aluminium and to develop their practical and theoretical skills,” he says.

Opportunities

Krieg says there are many opportunities for the aluminium sector in State-owned Transnet’s and Eskom’s infrastructure development programmes.

“Transnet wants to expand and revitalise its railway system. This is good news for the aluminium industry, as aluminium is a key product in the production of railway rolling stock.

“There is also strong growth in the electricity industry. Eskom plans to build more power stations, including nuclear power stations, and 5 000 km of overhead transmission lines, which can be supplied by the South African aluminium industry,” explains Krieg.

He states that government is developing various large infrastructure projects to create jobs for South African companies.

“My concern is that many of these job opportunities may not be realised and that South Africa will not benefit from these projects. All the products in the aluminium industry can be imported, so if we don’t work together with State-owned companies and business to build and develop skills and capabilities, the industry will not benefit.

“Many of these government infrastructure projects have deadlines regarding their completion. If South African labour and services are not up to the task, State-owned companies will import what they need because there won’t be another option, and I see that as a concern,” Krieg says.

He adds that a major challenge facing role-players in the industry is to stay in business and continue investing.

“We encourage our members to take part in programmes such as the Manufacturers Competitiveness Enhancement Programme, which is a new grant scheme that was put in place by government in July.

“It is focused not only on acquiring new equipment for factories, but also on assisting companies in clean-up initiatives and ways to streamline factories to make them more environment friendly.

“There is a lot of opportunity – industry players have to make use of it,” he concludes.

Edited by: Chanel de Bruyn
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Metals News
Acting Transnet CEO Siyabonga Gama
Acting Transnet CEO Siyabonga Gama, who was appointed to the position following the surprise secondment of Brian Molefe to Eskom, has placed revenue diversification at the top of his list of immediate priorities, with the weak commodity outlook seen as having the...
While noting that it was not possible to forecast the extent of electricity curtailment over the remainder of the year, aluminium manufacturer Hulamin says it is “already clear” that its earnings per share (EPS) and headline earnings per share (HEPS) for the six...
Global crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) decreased by 2.7% year-on-year to 138-million tonnes in March. China’s crude steel production decreased by 1.2% year-on-year to 69.5-million tonnes, while Japan’s...
More
 
 
Latest News
South African mining and energy adviser Ted Blom has raised a litany of concerns about the state of power utility Eskom and has warned of runaway costs and shortfalls in coal and water, as well as rail capacity. Blom was surprised by the recent buoyancy shown by...
JSE-listed Astrapak will sell specialised packaging systems manufacturer Knilam to Mapflex SA for R17.7-million. The proceeds would be used to reduce Astrapak’s current level of gearing.
The last of the 26 mooring units comprising the Port of Ngqura’s automated mooring system (AMS) have arrived at the port and are expected to improve port efficiency and safety, further driving the Transnet National Ports Authority’s (TNPA’s) objective of establishing...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
Sappi Southern Africa CEO Alex Thiel
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96