Hulamin on Thursday expressed its continued frustration at the lack of tariff protection against cheaper imports as metals price remained weak, resulting in a significant negative impact on the financial performance of the company.
Hulamin chairperson, Mafika Edmund Mkwanazi, in a statement said the company’s applications for higher import duties on aluminium were not finding joy with authorities.
“It is disappointing and difficult to understand why the International Trade Administration Commission of South Africa (ITAC) has not supported Hulamin’s application for the imposition of an import tariff on rolled aluminium products,” Mkwanazi said.
Hulamin’s extruded aluminium products are currently covered by a 5% duty.
Hulamin, Africa’s leading manufacturer of rolled and extruded aluminium products, last year asked the government to protect it from cheaper imports through higher import duties on all of its products to the maximum level of 15%.
This followed applications to ITAC by steel makers, asking for a maximum 10% duty on imports.
Hulamin’s application failed as it was unable to convince ITAC that it was negatively affected by imports.
Mkwanazi said this would have had the effect of levelling the competitive landscape between South Africa and competing nations that hosted aluminium rolling mills worldwide, all of which have import duties that protected their domestic industry.
“The failure to impose duties will significantly hamper our effort to increase the recycling of aluminium in South Africa and reduce the viability of possible further investments in high technology capacity for the automotive industry. We await news on our application for import duty on extruded aluminium products.”
About 80% of Hulamin’s revenue comes from rolled products, with the rest from complex extruded products.
Hulamin supplies the domestic industry and exports to Europe, North America, the Middle East and Asia.
The London Metals Exchange price of aluminium has remained weak and in a band between $1 450 and $1 550 per ton since the third quarter of 2015.
Mkwanazi said this meant that the metal price lag that had a significantly negative impact on Hulamin’s financial performance in the prior year, had not had a major impact on financial performance thus far in 2016.
Hulamin warned in February that headline earnings a share for the year to the end of December 2015 would be 66% to 68% lower than the year before and reported a 67% decline to 37c a share on February 22, impacted by share based payments.
Meanwhile, Mkwanazi announced that a number of Hulamin directors would reach the end of their tenure or retire in the coming months.
“In particular and on behalf of the Board, I would specifically like to thank [Johannes Bhekumuzi] Magwaza who retires today from the Hulamin board, not only for his nine years of service on the board, but also the many years that he has served the company both directly and indirectly prior to the listing in 2007. The board thanks David Austin for his loyal service during the three years he has been with Hulamin as chief financial officer as he leaves at the end of April and wishes him well for the future,” Mkwanazi said.
Hulamin also welcomed Anton Krull as Austin’s replacement from May 3, also saying the Board had started a succession review to make at least two new appointments by the third quarter of 2016 and additional appointments in 2017 as part of a structured plan.