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Sep 29, 2006

Power qualms curb investment – association

© Reuse this One of the main reasons that primary aluminium smeltercapacity cannot be expandedor installed as business demands prefer is the uncertainty of power supply.

Aluminium Federation of Southern Africa (Afsa) executive director David Hughes says that this is one of the main issues holdingback the development of the proposed new smelter at Coega and the possible expansion of the Richards Bay and Mozal smelters.

“Smelters in Richards Bay and Mozambique are operating at full capacity and sell all that they produce, either locally or throughexports but they could sell so much more if they had the capacity,” says Hughes.

The Richards Bay Bayside smeltersupplies the bulk of the commonalloys required for the semifabri-cators, such as the extruders, rolling mills and casters. According to Hughes, where this supply cannot meet local demand, alloys are imported either in extrusion billet or rolling slab and, regardless of source, the major issue facing local consumers is the price of primary and alloy aluminium which is based on the LME and then has local premiums added. Reduction in local input costs will enhance the local industry’s competitiveness. According to Hughes, South Africahas the advantage of a modernrolling mill at Hulett Aluminium’s Maritzburg factory that ensures that the downstream users of foil, sheet and plate are well served with the more common alloys. “Without this facility, the localindustry would be worse off. Special alloys and larger plate sizes, forexample, for the marine and road transport industries, are imported. Hulett Aluminium regularlyreviews and upgrades its product offer to try to meet local customer needs and the outlook is good and very solid,” remarks Hughes. The company’s expansion plans that are in place to get to 245 000 t/yof rolled products by 2009 is positive proof of this. Similarly, local extrusion output capacity has been expanded considerably over the last two years and Hughes adds that there is more to come.

Demands from the building and construction sectors continue to fuel demand in addition to the considerable growth in the engineering application of extrusions. Significant quantities of imported extrusions from the Far East, driven partially by the strongerrand, threaten the localextrusion and surface-finishing industries, but this is being challenged, as Afsa believe thatmaterial damage can be demonstrated because of dumping.

“The aluminiumindustry comprisesvarious specific sectors that, while to some extent interdependent, should be considered independently as the industry cannot simply be considered as a whole,” says Hughes, who believes that the industry is ingood condition and thriving. However, he adds that the castingindustry is not as buoyant androbust as hoped owing to high price inputs of scrap and primaryaluminium.

The secondary aluminium-alloy market and the downstream casting sector have taken a beating inrecent years and the strong rand has not been of much help in this regard.

He remarks that South Africa can and does look after itself and the aluminium industry will continue for years to come to be one of the cornerstone industries of the South African economy. In addition, Hughes says that there is a growing need to upgrade fabricating welding skills, among other skills, and Afsa is collaborat-ing with the DTI, Merseta, Saqaand other related organisations on this growing issue.

Training of industry on how to use aluminium correctly is also an important task being dealt with by Afsa. “We have such strong growth in some market sectors, like com-mercial road transport and, morerecently in boat building, that we need now to consolidate aluminiumapplications, ensuring correctfabrication practices and avoidingfailures,” comments Hughes.

Afsa has, over the past 18 months,been busy presenting workshops and seminars to a variety of companies trying to ensure thatcorrect design procedures andmanufacturing methods are used and these have enjoyed considerable interest from industry players.

Afsa’s purpose is to promote the use and application and growth of aluminium, to promote the South African downstream aluminiumindustry and to promote the interestsof its members. The organisation works closely with its members and the regional branches – in total some 410 com-panies, and the number continues to grow steadily each month as more and more users of aluminium see the advantage of belonging to Afsa. An exciting development is theincrease in the number of smallentrepreneurs in the manufactur-ing sector and the demand fortraining, which is satisfied by some of the extruders, the rolled-productssuppliers, specialist importers,services and consumables suppliers and, of course, by Afsa itself. The greatest potential for growth is through exports and so training is even more important for local manufacturers to achieve export readiness.
Edited by: cheryl reddy
© Reuse this Comment Guidelines (150 word limit)
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