AFRICA A R C E LO R M I T TA L S O U T H A F R I C A
Striving to be among one of the lowest-cost steel producers in the world
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Transforming
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ligning with the wider ArcelorMittal Group’s globally-renowned industry excellence, ArcelorMittal South Africa has adapted to changing local needs by continuously developing higher grades of steel in line with increasing demand across core industry verticals. With shareholdings in the Company changing hands numerous times over the course of its 88-year history, the
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ArcelorMittal is showcasing its innovation and creativity in South Africa in order to affirm its market-leading position through tough economic times Writer: Matthew Staff Project Manager: Stuart Parker
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Company has taken up additional business in order to answer the current and future market demand for steel products by increasing its production and output of steel plate; despite facing tough competition from foreign imports and an overall weakening economic climate. As Africa’s largest steel producer, ArcelorMittal South Africa has installed capacity to produce six million tonnes of steel per annum - as of June, 2016 - across its operations in Gauteng,
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ALL IMAGES BY JACO BOSHOFF, MARDO FOTO
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KwaZulu-Natal and the Western Cape. The Vanderbijlpark Works in the former region is one of the world’s largest inland steel mills and the biggest supplier of flat steel products in subSaharan Africa. Across its four major facilities, ArcelorMittal South Africa has a sizeable local capacity from which to manufacture products for the heavy engineering, construction, mining, automotive, furniture, cabling, fencing and fertiliser industries. This commonly
The Vereeniging Works has two electric arc furnaces
includes slabs, plates, cold and hot rolled coil (HRC), galvanised, tinplate, Corex, Midrex, billet rebar and other bars and rods. Showcasing its depth of technical and managerial expertise across not only its primary business vertical, the Company also has interests in coking coal and is able to process and beneficiate metallurgical and steel products into coal tar pitch. With domestic sales accounting for 90 percent of its revenue, the
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Quality of service
al itt ment orM rbish cel refu Ar r y
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25 years of refractory experience R
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Providing refractory installation ‘turnkey’ projects and maintenance services to suit our clients needs.
We specialise in services in the iron making, ferroalloy, and non-ferrous industry as well as boilers.
T: +27 82 621 4823 / 27 82 741 1018 F: +27 86 731 7795 / 27 86 563 5233 E: info@kaizenrefractories.co.za www.kaizenrefractories.co.za
Kaizen Refractories (Pty) Ltd Workshop No 1 15 Van der Bilj Street Newcastle
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Vanderbijlpark North Works
Company proudly contributed R43 billion to South Africa’s economy in 2015, an amount equivalent to 1.1 percent of the country’s GDP. This is further compounded by a team of 9,315 permanent employees, in addition to supporting more than 90,000 jobs directly and indirectly across South Africa, as well as investing a total of R12.6 million back into local communities in 2015, impacting 18,300 people through a multitude of socioeconomic development initiatives.
Innovative and creative investments
With the recent economic climate presenting difficult trading conditions, ArcelorMittal South Africa has adapted and restructured several internal departments to optimise its operations. Over the past few years,
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We continually monitor the quality of our products and are quick to respond and address any problems by applying the necessary knowledge and technology to find a solution
the Company formed a Business Improvement division to continuously identify and implement measures to improve operational and financial performance in a bid to regain local market share; a feat which has become
Former CEO, Dean Subramanian with Marietjie Lotter, Projects and Continuous Improvement Manager at the CEO Recognition Awards
Continuous Improvement – Quality of service We are committed to establishing Kaizen Refractories as the undisputed quality leader in the market place. While meeting the expectations and needs of our customers, we are further committed to maintaining this position through a policy of supplying a consistent product, quality of service and continued quality improvement. It is the responsibility of Executive Management to ensure that the principles of the Quality Assurance System be understood, implemented and maintained by all employees of Kaizen Refractories (Pty) Ltd in accordance with the policies and procedures applied to the National Standards ISO9001:2008. Kaizen Refractories (Pty) Ltd was established in 2007. We specialise in services in the iron making, ferroalloy, and non-ferrous industry as well as boilers. We have more than 25 years of refractory experience in these industries and we pride ourselves ion our values which are reflected in our name “Kaizen” meaning ‘Continuous Improvement – Quality of Service’.
consulting services. This also includes end flue and through-wall repairs as well as demolition of general refractory linings. We have further expanded our expertise to the forestry industry where we specialise in Dutch oven repairs, maintenance and new furnace relines. We also service the local coal crushing and screening industry by maintaining their rotary Kilns when required as well as stack relining, Warf interior relining and preheater relining. Since Kaizen Refractories’ inception we have worked with the following companies on various projects: Exxaro, Quantum Screening and crushing, Air products, Zisco Steel and Vuka Timbers. Our relationship with Arcelor Mittal Newcastle works has been ongoing since 2009 and we have completed several projects with them.
Kaizen Refractories (Pty) Ltd provides refractory installation ‘turnkey’ projects and maintenance services to suit clients’ needs. We supply engineered products and provide a wide range of consumable products in the steel, boiler, ferroalloy and non-ferrous industry locally. One of our main focuses is the iron making industry; coke ovens. We specialise in the cleaning of combustion chambers, gunning services, bricklaying, maintenance, and
T: +27 82 621 4823 / 27 82 741 1018 F: +27 86 731 7795 / 27 86 563 5233 E: info@kaizenrefractories.co.za
www.kaizenrefractories.co.za
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increasingly challenging as a result of Chinese imports and over-supply in the market. Dean Subramanian, ArcelorMittal South Africa’s Acting Chief Executive Officer (CEO) in 2016 explained at the time: “Until last year [2015], South Africa was one of only two steelproducing countries (out of a total of 69) that did not have protection measures in place to counter the impact of foreign imports. Based on the recent approval of import duties by the International Trade and Administration Commission (ITAC), I am confident that stability will be restored in the coming years.” He continued to say: “Our innovative and creative investments in research and development (R&D), as well as the significant spending allocated to environmental and health & safety initiatives, will also serve to counter over-supply and distinguish us from the competition; boosting efficiencies and optimising costs. We continually monitor the quality of our products and are quick to respond and address any problems by applying the necessary knowledge and technology to find a solution.” Benchmarking itself against similar manufacturing plants through the Global Technical Benchmark System used by the Group, ArcelorMittal South Africa also embraces the latest technologies that can enhance and streamline business activity. “We are continuously working to increase the level of automation in all our plants and now utilise SAP as standard across our ERP systems. Moreover, on a Manufacturing Execution System (MES) level, we have adopted various bespoke developed systems,” Subramanian detailed during the interview. In spite of the industry slowdown, the Company has experienced growth in the automotive and renewable sectors in particular, due to increased localisation of products and the need
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to develop higher grades of steel. “There has been huge but somewhat erratic growth in the renewable energy sector in recent years and we have been working hard to extend our product range in relation to steel plate products for wind turbines, which are largely being imported from China,” he added. “Similarly, the rising cost of electricity in South Africa means that we are making internal investments in energy efficiency initiatives and exploring viable alternative sources of power generation.”
Future requirements
Working closely with the South African Government to identify and implement various measures to ensure the sustainability of the local steel industry - including the introduction of import tariffs on 10 locally-produced steel products as well as the consideration of anti-dumping measures ArcelorMittal South Africa continues
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ArcelorMittal’s Vaal operations produced 38 percent of South Africa’s steel in 2015
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CS understands the strategic importance of logistics and supply chain management in complex business environments. The Company are experienced in effectively managing the challenges of dealing with fluctuations in demand and its impact on forecasting, planning and overall costs. The Company takes a holistic approach and assists customers to transform their supply chain operations into a powerful competitive advantage, fully aligned with their business strategy. The Company’s customer base, including ArcelorMittal, vouches for the high quality service that the Company has provided over the last 12 years.
T +27 86 152 7476
www.lcsgroup.co.za
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to work with the best interests of the wider economy in mind. “First and foremost, we are a proudly South African steel-producing Company and this is heavily reflected in our emphasis on local employment, B-BBEE emphasis, and community and Government involvement,” said Subramanian, who has since been replaced by the current Chief Executive Officer, Wim De Klerk. “Our employment strategy is designed to provide local opportunity through apprenticeships, learnerships, bursaries and other skills development initiatives to ensure there is a pool of qualified talent available to meet both current and future requirements. “In partnership with the Department of Science and Technology and the Department of Education, our Science Centres represent our biggest investment in the local communities in which we operate; providing local students with extra tuition in science,
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technology, English and mathematics (STEM subjects). In 2016, our flagship Science Centre in Sebokeng is celebrating 10 years of existence, and we plan to celebrate this milestone with the former learners who have been part of the initiative.” Policies and procedures at ArcelorMittal South Africa ensure that all employees are afforded with
equal opportunities and individual progression. The Company’s Transformation department has also undertaken a robust and ambitious programme to develop local entrepreneurs via a six-month pilot programme in partnership with the Vaal University of Technology aimed at enhancing the skills of local business people. The division also launched an industrial and manufacturing hub later in 2016 which provided at least 12 local fabricators with a facility to work from, access to markets and the opportunity to exchange ideas. “We are cognisant of the role that we play in the socio-economic development of local communities and as the country’s and the region’s largest steel producer, we will work with all stakeholders to ensure the sustainability of the South African steel industry for the benefit of all stakeholders,” Subramanian further detailed in regards to the launch last year.
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Important steps
The global steel industry contributes enormously to the growth and development of economies around the world. With the crisis in the steel industry continuing unabated, it is more important than ever before to ensure that ArcelorMittal’s Group-wide stakeholders understand the threat to the industry and the implication for national and local economies. “We are focused on stabilising the business and returning our operations to profitability. Above all, we aspire to be the preferred steel producer on the African continent as we understand what steel products are needed to satisfy the demand,” noted Subramanian in a sentiment no doubt echoed by De Klerk since taking up the post. On a local scale in South Africa,
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There has been huge but somewhat erratic growth in the renewable energy sector in recent years
the Company is more than half-way through its 2012-2019 strategy, which will grow ArcelorMittal’s footprint on the continent even more extensively. Subramanian rounded up the remaining goals for 2016 and 2017, onwards: “We hope to double our tin product capabilities for the packaging market, continue modifying our facilities to produce galvanised products for the automotive industry, bolster our construction market offering, and conduct a mini-reline of our blast furnace at Saldanha to extend the life of our operations. “The global steel crisis has undoubtedly affected our business and we have had to respond swiftly and decisively to ensure that we survive into the future. We are confident that with the important steps we have taken together with the positive interventions
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agreed by Government - that we will be able to turn the business around in the medium-term. We will continue our engagements with the Government to ensure that the necessary protection measures are fully implemented, including the designation of locally produced steel for use in Government infrastructure projects.� And with the inception of a new Arcelor Centre in Isando; R12.6 million spent on three science centres; a five-year pricing plan in place with the Government to aid the consistent price of steel; the imminent introduction of two internal programmes; and the ongoing raising of funds in order to refurbish and update all of its facilities - the aforementioned important steps are continuing to be taken to compound ArcelorMittal’s stronghold on the industry in South Africa.
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Delfos Boulevard Vanderbijlpark Tel 016 889 9111 Fax 016 889 2097
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