Access to good-quality local scrap is being hampered by increasing exports of this material.
This is according to steel and steel products manufacturer Scaw Metals Group head of operations Steve van Wyk, who addressed the media during a tour of the company’s Union Junction steelmaking plant in Germiston, east of Johannesburg, earlier this month.
He stated that scrap metal was a key raw material for the company, but that increasing volumes of scrap exports also posed a risk to the company’s goal of doubling its earnings before interest, taxes, depreciation and amortisation by 2018.
Van Wyk noted that the scrap industry was extremely competitive in terms of collection and suggested that export tariffs be implemented to plug any gaps in the system.
Meanwhile, he said, technology trends in cast production included the need to simplify product ranges and automate processes, adding that cast production is fairly labour intensive.
“Scaw Metals has plans in place to automate some of its processes. We have a project to install an automated process line by foundry equipment manufacturer Omega Foundry Machinery. This R150-million project started at the beginning of the year and is expected to be completed by the end of the year,” he revealed.
The new process line will enable Scaw Metals to automate and streamline its railway components manufacturing.
The company, which has a yearly turnover of R8-billion and a yearly sales volume of 775 000 t, also aims to add more value to its products, focusing on downstream product beneficiation.
Scaw Metals’ Union Junction, located on 370 ha, is the group’s largest manufacturing site, and its scrap-processing division recycles 460 000 t of scrap a year, with scrap accounting for 55% of the total cost of production.
The Union Junction plant has a yearly revenue of R2.3-billion and sales volumes of 359 000 t/y.
Opportunities for the plant lie in a cogeneration project to produce electricity using off gases to fire the operation’s boilers, regional infrastructure projects and an increase in African steel consumption.