http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.15Change: 0.05
R/$ = 11.56Change: -0.01
Au 1174.16 $/ozChange: -22.76
Pt 1180.50 $/ozChange: -17.00
 
 
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 Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 28, 2012

Aluminium industry growth slowly recovering

Back
London|Africa|Education|Environment|Eskom|Nuclear|Packaging|Projects|System|Transnet|Welding|Africa|Europe|China|India|South Africa|United States|International Aluminium Institute|Southern African Institute Of Welding|Automotive|Building|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|Education|Environment|Eskom|Nuclear|Packaging|Projects|System|Transnet|Welding|Africa||||Automotive|Building|Energy|Equipment|Manufacturing|Nuclear|Packaging|Products|Services|Steel||Infrastructure|Power
london|africa-company|education-company|environment|eskom|nuclear-company|packaging-company|projects|system|transnet|welding|africa|europe|china|india|south-africa|united-states|international-aluminium-institute-facility|southern-african-institute-of-welding-facility|automotive|building|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 Aluminium News
The month-long strike in the metal sector knocked back the third-quarter growth rate of the South African economy by more than half of what it could have been, the SA Reserve Bank (SARB) said on Monday. In its latest Quarterly Bulletin, the bank said the annualised...
After a R1.5-billion impairment charge resulted in Hulamin reporting negative earnings per share (EPS) of 422c for the 2013 financial year, the aluminium supplier said on Monday that EPS and headline earnings per share for the 2014 financial year were expected to...
Henk Langenhoven
The Steel and Engineering Industries Federation of Southern Africa (Seifsa) warned on Friday that the metals and engineering sector could contract by between 2% and 3% in 2014, owing primarily to the fallout from a month-long strike in July. The sector, which made...
More
 
 
Latest News
Updated 3 hours ago Ailing German engineering and services company Bilfinger SE has agreed to sell most of its construction division to Swiss building giant Implenia as it seeks to focus on more lucrative industrial services. Bilfinger – which has issued four profit warnings this year,...
China appears to have been routinely underestimating output from its sprawling steel sector, with official figures for last year alone 40-million tonnes below a key industry estimate - an amount equivalent to Germany's entire annual production. Beijing has vowed to...
Lumwana, Zambia
Canada’s Barrick Gold Corp will suspend operations at its Lumwana copper mine, in Zambia’s Northwestern province, after the country enacted legislation that raised the royalty rate on openpit mining operations from 6% to 20%. TSX- and NYSE-listed Barrick, the world’s...
More
 
 
Recent Research Reports
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.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
 
 
 
 
 
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
TO BE PHASED INTO SERVICE The first MeerKAT dish, with another 63 to come
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
MATT BARKER Wireless networks should enable users to engage and must provide relevant information to them based on their activity and location
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...
 
 
 
 
 
 
 
 
 
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