Aug 13, 2010
New China-based facility aims to increase global competitivenessBack
The move to open a facility in China comes in light of the company’s reduced global competitiveness, owing to the continued strong performance of the rand. VR Steel MD John van Reenen explains. “I estimate that the rand is currently being overvalued by about 30%, translating into higher local manu- facturing costs,” he says.
The company specialises in the construction of dragline buckets, hydraulic and rope shovel buckets, and truck bodies with capacities of up to 350 t. Van Reenen adds that locally ordered products for Southern Africa will, however, continue to be manufactured at the company’s Alrode facility, in Alberton, while products for the Australasian and Asian markets will be manufactured at the new facility in China. The company is also represented in the US and in Canada.
VR Steel reports that it had a long association with a Chinese steel products manufacturing firm before deciding to establish its own facility. The Chinese facility will be mainly engaged in constructing truck bodies for Chinese mines, dragline buckets and rope shovel buckets for export, while its South African facility mainly constructs bodies for large trucks for mining companies, as well as all VR Steel’s other products for sale in Southern Africa.
Meanwhile, VR Steel has fabricated the largest rope shovel bucket in the world, weighing in at 89 t. It will be used at a coal mine in China’s Shanxi province.
Further, Van Reenen explains that VR Steel has developed some of the most advanced design software in the world. “After considering existing software to design buckets and truck bodies, we have developed our own to suit our particular needs,” he says.
The company is able to simu- late soil movement within a bucket to the smallest detail. The software can simulate up to 5 000 different particle sizes entering and leaving a bucket, and programmes often run for weeks to simulate only about 15 seconds of a bucket movement.
Further, VR Steel uses spe- cific quenched and tempered steel, imported through steel manufacturer Swedish Steel, to construct its products. This helps to make the products more durable to meet the demands of tough working conditions, often being used continuously for digging in the earth.
“We examine a specific mine’s blasting practice to determine the thickness of the steel to be used in a design. The blasting is a big factor in determining the severity of the wear the equipment will experience,” he says.
During the construction of mining equipment, VR Steel cuts and bends steel to the required shapes by using 1 250-t- and 1 500-t-capacity presses. The company tries to reduce the use of welding on its products, making its products stronger. Welding is reserved for the less stressed areas of the products.
Van Reenen points to the importance of constructing mining equipment to the high- est possible standards, as it has to withstand continuous hammering from very abrasive environments. Dragline buckets are used mainly where coal is found in relatively flat seams, close to the earth’s surface, while rope and hydraulic shovel buckets are used where more undulating seams of minerals are encountered.
Further, the company reports that it is still struggling to escape the severe effects of the recession. Van Reenen says that the company’s profits decreased by 50% during 2009, and, during 2010, profits were down by a further 70%. However, there is potential improvement, as the company order book has seen a significant increase for the rest of the year and into 2011.
“I believe many mines are reaching the stage where their equipment is nearing the end of its service life, prompting new capital investment for its replacement. We expect a significant upturn in the manufacturing industry, as there are many new mines starting operations in Africa in the foreseeable future, as well as renewed activity in the platinum- and diamond-mining industries,” Van Reenen concludes.
Edited by: Brindaveni Naidoo
To subscribe email email@example.com or click here
To advertise email firstname.lastname@example.org or click here
Other Video News
Recent Research Reports
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...