For the past number of years, DCD’s Heavy Engineering Operation, situated in Vereeniging and Vanderbijlpark, has focused on the manufacturing of large capital equipment components for the mining industry. As a result of the depressed market conditions in the global mining sector, with very few new capital projects materialising, DCD’s Heavy Engineering Operation has been loss making since mid-2013, said Digby Glover, CEO of DCD Group, in a statement released on 31 March 2017.
“We have implemented a number of different actions to restore the business to profitability. These actions have not been sufficiently successful and the Group has had no choice other than to explore more aggressive alternatives in order to preserve cash.

“Our analysis has included a broad range of issues – including market needs, the effect on various stakeholders, the current economic climate and outlook, the various businesses cost structures, contractual and commercial obligations, the businesses competitive position and future potential, to name a few.

“The decision process has been very complex and it is well understood that any option selected can have a significant impact on all stakeholders. Taking everything into consideration, it has been decided to exit the very heavy engineering (such as winders, mills and drums) related markets after completion of the current orders on hand. This decision affects both the South and Vanderbijlpark works. The exit from this market will be conducted in a responsible manner ensuring all commitments to stakeholders are met.”

Glover added that the light and medium engineering parts of the business are to be consolidated into DCD’s joint venture business Gravico (Pty) Ltd trading as Gravico Heavy Engineering. This business will be run out of the North works and its focus will be on the mining and industrial sectors.

“We acknowledge that this decision will affect a number of people, but it is not possible to continue operating in the current situation. The process will start on 31 March 2017 and will continue for a number of months to facilitate as smooth a transition as possible. A key part of the process will be continuous engagement and consultation with all affected parties to ensure that we move forward as effectively as possible.”