Much of local railway component supplier voestalpine VAE SA’s 2013 business, which is just about on par with its operational achievements and targets of last year, will be guided by the investments of major rail operators and mining houses, says CEO David Marite.

“This year, we will take advantage of the infrastructure investments of these rail operators, specifically railway-track infrastructure investment.”

He points out that, while the company, a subsidiary of the voestalpine group, headquartered in Linz, Austria, is not investing in any significant capacity increases, the company’s production figures are expected to be influenced this year and beyond by a tender of State-owned rail utility Transnet Freight Rail (TFR), for which it is currently bidding.

The outcome of the bid is not yet know as TFR has requested for an extension of the validity period.

The seven-year R300-billion Market Demand Strategy (MDS) of TFR’s holding company, State-owned freight logistics group Transnet, is aimed at expanding the group’s rail, port and pipeline capacity to meet market demand.

Of the overall MDS investment, the group has earmarked R205-billion for railway projects, with R201-billion allocated to TFR and R4-billion to Transnet Rail Engineering.

TFR’s two-year-long contract is for the supply of ultralong welded rails and turnouts, which is the major focus of voestalpine VAE SA’s business.

The tender, which was advertised in the third quarter of 2012, is being adjudicated and evaluated before being awarded to a bidder.

Marite says that, if awarded the tender, voestalpine VAE SA aims to extend its contract term beyond the initial two years, adding that the company’s business success will be significantly increased if it is able to take advantage of Transnet’s infrastructure needs during this period.

Capacity Investment
In the past four to five years, voestalpine VAE SA significantly invested in ramping up available capacity at its three manufacturing facilities in Johannesburg, Kimberley and Bloemfontein, in preparation for South Africa’s expected rail infrastructure investments.

The Kimberley manufacturing facility, which focuses on the handling and welding of long rails, invested in its rail-handling capabilities by obtaining syncronised cranes that can easily handle the 240 m rail lengths being welded at the facility.

The cranes have improved the loading capacity and speed of rail handling, says Marite.

The company also invested in its Johannesburg and Bloemfontein turnout manufacturing facilities by upgrading the production lines and changing production and assembly methods to produce fully assembled turnouts in-house.

To supply fully assembled turnouts, voestalpine VAE SA initiated the concept of a tailor-made transport wagon to transport fully assembled turnout panels. The widths of the turnout panels do not allow transport using conventional methods and wagons. The new wagon enables the transport of turnouts to site at an angle, without interfering with bridges, mast poles and narrow railway obstacles.

Expansion in Africa
The rail infrastructure manufacturer intends to be more aggressive in its efforts to expand its business in Africa, specifically in sub- Saharan Africa.

“We plan to increase our presence in this market, as there are several mineral and metals projects being undertaken in sub-Saharan countries, which require mining houses to establish new or upgrade the existing rail infrastructure in the area to transport their commodities to ports, or across borders in the case of landlocked countries, says Marite.

He highlights that voestalpine VAE SA is involved in the upgrading of diversified miner Exxaro’s Mayoko iron-ore railway line, in the Republic of Congo, Central Africa.

The Mayoko project was acquired in January 2012 as part of Exxaro’s acquisition of Australia-based iron-ore development company African Iron.

The R190-million railway line upgrade resulted in voestalpine VAE SA supplying heavy-haul turnouts and rails.

Marite notes that mining activities are also being undertaken in Mozambique by Brazilian mining giant Vale and diversified mining major Rio Tinto. While the projects are still in the early mine-design phase, voestalpine VAE SA has started quoting contractors on materials.

Further, in 2011, the company supplied 13 000 t of 48 kg of rail to rail operator Transnamib in Namibia. The rail operator also took receipt of a second order of turnouts this year.

“Having already supplied our products to mines and rail operators in Namibia, we feel that this gives us a competitive edge when bidding for future supply contracts,” says Marite.

Voestalpine VAE SA supplies a range of turnouts, turnout systems, the Hytronics range of switching systems, Spherolock switch machines, hot-box and break-detection systems, safety systems, axle-counting systems, the VAE Roadmaster turnout monitoring system, steel sleepers, insulated rail joints rails and hardwood timber sleepers.

The company also provides rail-related services, such as the head hardening and butt welding of rails, forging and heat treatment and the relevant logistics support required.