http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.69Change: -0.05
R/$ = 12.32Change: -0.01
Au 1168.78 $/ozChange: -0.02
Pt 1083.00 $/ozChange: 1.00
 
 
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|Casting|Education|Environment|Eskom|Export|India|Nuclear|Packaging|Projects|Rolling Stock|rolling-stock|System|Training|Transnet|Welding|Africa|Europe|China|South Africa|United States|International Aluminium Institute|Southern African Institute Of Welding|Automotive|Energy|Energy Intensive|Equipment|Gross Domestic Product|Manufacturing|Manufacturing Country|Packaging|Product|Products|Scrap Metal|Services|Steel|Steel Weighs|Infrastructure|Mark Krieg|Power
|Africa|Aluminium|Building|Casting|Education|Environment|Eskom|Export|Nuclear|Packaging|Projects|Rolling Stock|rolling-stock|System|Training|Transnet|Welding|Africa||||Automotive|Energy|Equipment|Manufacturing|Packaging|Products|Services|Steel||Infrastructure|Power
london|africa-company|aluminium|building|casting|education-company|environment|eskom|export|india|nuclear|packaging-company|projects|rolling-stock|rolling stock|system|training|transnet|welding|africa|europe|china|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|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
Creamer Media Senior Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Aluminium News
Article contains comments
Describing Mozambique as an “excellent” platform from which to serve key markets in Africa, Bahrain-based industrial group Midal Cables would on Wednesday launch a $50-million, 14 500 m2 aluminum factory located adjacent to the Mozal joint venture aluminium smelter,...
South African pump manufacturer Hazleton Pumps International took top honours in the Most Innovative Company and Customer Service of the Year categories of the Steel and Engineering Industries Federation of Southern Africa’s (Seifsa’s) Awards for Excellence, on...
The local metals and engineering sector cannot grow as a result of South Africa’s unreliable energy supply and the fact that, on average, energy costs in the sector account for about 8% of intermediary input costs, Steel and Engineering Industries Federation of...
Article contains comments
More
 
 
Latest News
An end to wage negotiations within the local government sector could be in sight as a conciliator’s proposal, setting out a number of settlement suggestions to resolve the deadlock, was expected on Monday. The Independent Municipal and Allied Trade Union (Imatu)...
Development financier Eastern Cape Development Corporation (ECDC) executive Noludwe Ncokazi on Friday said the organisation had the “huge responsibility of ensuring business continuity”, following the resignation of ECDC subsidiary Automotive Industry Development...
South Africa’s second-largest oil refinery, Engen Refinery (Enref), is set to undergo a three-day planned maintenance outage from July 9 as part of an ongoing maintenance programme to ensure that the facility, which delivers a significant portion of South Africa’s...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
NHLANHLA NENE The main constraints to economic growth are domestic
Finance Minister Nhlanhla Nene earlier this month stated that, while South Africa’s 2015 economic growth target of 2% was achievable, it was not enough to deliver the tax revenue needed to combat the country’s challenges.
The World Steel Association has published the 2015 edition of the World Steel in Figures report, which shows an increase in steel production as well as provides an overview of steel industry activities from crude steel production to apparent steel use.
The 25-year master plan for Gauteng’s Aerotropolis project will go through a process of approval and adoption during June and July, says Aerotroplis project manager Jack van der Merwe. “We are also in the process of putting together a special purpose vehicle (SPV) to...
SOLAR PANELS The existing buildings in the Coega Industrial Development Zone lent themselves well to rooftop solar panel installations
The Coega Development Corporation (CDC) plans to fit 15 of its buildings, totalling 127 000 m2 of roof space, in the Coega Industrial Development Zone (IDZ), in the Eastern Cape, with solar panels.
The Supreme Court of Appeal’s (SCA’s) November 2014 judgment, ordering steel producer ArcelorMittal South Africa (AMSA) to hand over the 2003 Environmental Master Plan for its Vanderbijlpark steel plant to environmental pressure groups, confirmed the right of civil...
 
 
 
 
 
 
 
 
 
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