The new R80-million Dunlop Hiflex Fittings plant is a joint venture between Dunlop Hiflex Group UK and Cape Manufacturing Engineers (CME). It will earn about R70-million in foreign exchange each year and create about 60 more jobs in the factory and jobs among the suppliers.
The decision to move the factory to Cape Town was taken despite competition from Eastern Europe and the Far East.
Cape Manufacturing Engineers MD Bernard Ashlin says the essential reason for the move was that fittings of better quality could be produced at better prices in the Cape.
“Cape Town was also favoured because the UK partners like the city and because of longstanding cultural ties between the two countries,” he says.
CME’s background is in the arms industry where high standards of precision are required.
Artisans trained by the company form the backbone of the group and their skills have enabled CME components to match the best world standards.
CME Precision, with a 26% black economic empowerment (BEE )senior employee ownership was established in March 2004 to continue servicing the arms industry.
CME Automotive was established in March 2003 to service the motor industry, while CME Foundry was established in March 2005 after the liquidation of Gearings Foundry and the need to secure a supply of castings to its automotive company.
Dunlop Hiflex Fittings is the first 50% joint venture with an overseas partner to be incorporated in the CME group.
Ashlin says that, when negotiations with Dunlop Hiflex began two years ago, the rand was weaker and conditions for exporting were more favourable, but a relook at producing only the high-volume range and using subcontractors for plating and heat treatment has contained capital costs and improved plant efficiency.
This has ensured that the project remains profitable.
Initially, six multispindle lathes were moved to Cape Town, along with setters to train local operators.
The quality of products made during the pilot phase exceeded Dunlop’s expectations and the decision was made to go ahead with the joint venture. CME and Dunlop Hiflex, as equal partners in the venture, have had to finance the project from their own resources but now that the factory is in production and exports are moving they are negotiating with financiers to supply some of the capital.
The raw material for the product is leaded steel, which is imported in the form of solid round and hexagon rods.
These are machined to produce a great variety of couplings for a range of hydraulic systems used in the industry.
They are zinc-plated using the trivalent process by a local contractor.
In all, 3 600 tons of raw material will be imported each year, as the local industry is unable to supply the steel alloy in the variety of sizes required.
The entire production will be exported to the UK, which will supply customers, mainly in the UK, itself and in the Scandinavian countries, where there is a big demand for hydraulic systems in areas such as the timber industry.
In the long term, Dunlop Hiflex Fittings plans to break into the huge American market and, when this happens, it hopes the local steel industry will be in a position to supply its raw material.
The UK factory operated 40 big six-spindle lathes but Ashlin believes that it will not be necessary to bring all the machines to Cape Town as CME already has equipment which can do some of the work.
At present, 12 machines are operating for two shifts a day and the first container of fittings was shipped out on April 18.
The management and operators of the factory, in Epping Industria, will all be Capetonians but the know-how and training is being supplied by the UK factory.