ARCELORMITTAL SOUTH AFRICA

ARCELOR M I T TAL S O U T H A F R I C A

Driving profitability back into South Africa’s steel industry www.southafrica.arcelormittal.com

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TRANSFORM Africa’s largest steel producer, ArcelorMittal is working closely with the South African Government in a bid to overcome some of the country’s commodity challenges by responding to the changing needs of industry Writer: Emily Jarvis Project Manager: Stuart Parker

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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 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

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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 across its operations in Gauteng, KwaZuluNatal 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

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RMING engineering, construction, mining, automotive, furniture, cabling, fencing and fertiliser industries. This commonly 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 Company proudly contributed R43 billion to South Africa’s economy

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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 last year, impacting 18,300 people through a multitude of socio-economic development initiatives.

Regaining local market share

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, 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 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) explains: “Until last year, 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

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ALL IMAGES BY JACO BOSHOFF, MARDO FOTO

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Manufacturing | Fabrication | Reconditioning |

MEDIUM TO EXTRA HEAVY ENGINEERING Heavy fabrication and precision engineering

TECHFAB (PTY) LTD BEE COMPLIANT

Medium to heavy machining | Specialised welding

11 Pienaar Road, Selection Park, Springs T: 011 730 8600 F: 086 272 1268

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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.

“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

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Vanderbijlpark North Works

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

Acting CEO, Dean Subramanian with Marietjie Lotter, Projects and Continuous Improvement Manager at the CEO Recognition Awards

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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 details.

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 adds.

“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.”

Proudly South African

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

TECHFAB (PTY) LTD BEE COMPLIANT

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ince foundation in 1972, Techfab has identified an ever increasing demand for local manufacture and replacement of imported industrial components, equipment and specialised machinery.

Continuous growth and adoption of innovative processes by our professional and highly qualified team since then means we are currently located in premises of 20,000m2.

These premises, located in the town of Springs, enable us to provide a quick response and turnaround time to meet our clients’ demands who are located in the five major industrial areas; namely, Johannesburg, Pretoria, The Vaal Triangle, Middelburg and Secunda.

Our modern manufacturing facility has allowed us to increase our capacities, which include: • Vertical milling to 5,000mm in diameter • Turning to 3,000mm in diameter and 12,000mm long • Material handling to 50,000kg Our facility also allows us to store customers’ property safely under roof away from the harsh weather conditions.

Techfab is an IS09001:2010, ISO3834 and ASME IX certified company. All our welders have been re-certified to ASME IX welding specification. We now also have a qualified international welding specialist.

Techfab also provide a variety of services to the steel mills and mining industries which include the refurbishing of hot mills processing roll and highly successful substitutes, some of which is listed below:

• Hot strip mill down coiler segments and wedges • Continuous casting machine, end and side copper plates • Special purpose, low speed, high load antifriction bearings • Design and manufacture of metal shredder (for scrap metal industry) • Design and manufacture of complete scrap metal processing plant We have a fully-fledged and independent health and safety department which vehemently keeps control of all health & safety, environmental and labour issues.

Our association with ArcelorMittal and its predecessor goes all the way back to the inception of Techfab. During this time we have built up a very solid and reliable relationship.

We place on record our thanks to ArcelorMittal for trusting us with the opportunity investigating and providing solutions to enable them to decrease downtime, increase longevity and drastically reduce costs.

Techfab invests large amounts of time and monetary resources to enable our highly qualified and professional research and development department to continually conduct research into all aspects of our manufacturing processes. This enables us to provide our clients with the latest technology and materials.

Our clients can be assured that what they receive from Techfab is the BEST. Techfab stands ready to meet your manufacturing and reconditioning requirements and the challenge of your business.

For further information please contact David Green on +27 11 730 8600 or +27 83 534 0837

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HYDRO PRECISION ENGINEERING

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ydro Precision Engineering, established in 1980, serves the engineering and industrial sectors in South Africa.

We specialise in hydraulics, engineering, fabrication, construction and site work throughout South Africa and neighbouring countries.

As an approved supplier to Arcelor Mittal for the past 35 years, we have completed many major projects in hydraulic systems, pipe work, cylinders, general engineering, fabrication, site work, plant maintenance and shutdowns.

We have a platinum (five-star) safety rating, and also comply with ISO 9001 and ISO 3834 quality management systems. Hydro is a level 3 B-BBEE supplier.

ArcelorMittal’s Vaal operations produced 38 percent of South Africa’s steel in 2015

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,” says Subramanian. “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.”

He adds: “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, technology, English and mathematics (STEM subjects). This year, our flagship Science Centre in Sebokeng is

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ANGSTROM ENGINEERING

First and foremost, we are a proudly South African steelproducing Company and this is heavily reflected in our emphasis on local employment...

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ngstrom invite and embrace collaborating partnerships with stakeholders.

Extending our 25 year relationship with ArcelorMittal SA’s plants is a priority.

Successfully servicing ArcelorMittal SA’s plants largely depends on our clear understanding of their technical requirements.

Modern facilities and well trained personnel are key to our success.

Angstrom successfully transfer skills as a function of B-BBEE and adherence to ISO 9001 and 3834 is an operating culture. Specialised capabilities regarding roller refurbishment were developed in collaboration with Weldclad.

Our partnership with Primetals secures technology acumen and access to original plant equipment and spares.

T +27 16 362 0300 E sales@angstromeng.co.za

www.angstromeng.co.za

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Hydro Precision Engineering undertake complete turnkey projects from the design, installation and commissioning stage of any engineering or fabrication project including the design and manufacture of hydraulic systems, cylinders, power packs and specialized machinery.

Tel: +27 16 9814055 Email: sales@hdp.co.za 38 Edison Boulevard Vanderbijlpark, Gauteng South Africa

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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 will also launch an industrial and manufacturing hub later this year which will provide 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

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MANUFACTURING FACILITIES VAAL OPERATIONS, Gauteng Comprising the Vanderbijlpark Works and the Vereeniging Works, ArcelorMittal South Africa’s Vaal operations produced 38 percent of South Africa’s steel in 2015 and created R13 billion in value through beneficiation. The operations added R14 billion to the Gauteng Province through wages, supporting local suppliers and indirect contributions.

Pretoria Works focuses on production of commercial coke & chemicals

VANDERBIJLPARK WORKS IS THE LARGEST OF THE FACILITIES, PRODUCING PLATE AND HOT ROLLED COIL (HRC). IT HAS A CAPACITY OF 2.9 MILLION TONNES OF LIQUID STEEL PER ANNUM

NEWCASTLE WORKS, KwaZulu-Natal The Newcastle Works is South Africa’s foremost supplier of profile products, producing about 1.6 million tonnes of final product. This highly efficient and low-cost operation, rated among the lowest billet cash-cost producers in the world by a leading commodities research institute, bears testimony to the success of the intensive reengineering programmes undertaken at ArcelorMittal South Africa.

In 2014, ArcelorMittal South Africa undertook by far its largest Capex project at the ISO 9002, 14001 and 18001 certified plant: a R1.8 billion reline of the blast furnace. The project helped create jobs and boost the

economy of the town as well as the northern KwaZulu-Natal region.

Newcastle Works also invested R230 million in a Zero Effluent Discharge (ZED) plant to ensure compliance with environmental requirements.

SALDANHA WORKS, Western Cape

Vanderbijlpark Works is the largest of the Company’s facilities

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All coke & chemicals’ plants are ISO 9001, ISO 14001 and OHSAS 18001 listed

Saldanha Works produces HRC for local and export markets. It produced 16 percent of the country’s steel in 2015 and has a capacity of 1.3 million tonnes of liquid steel per annum. The operation has created R3.1 billion in value through beneficiation and contributed a further R1.3 billion to the province through taxes, wages, local suppliers and indirect contributions.

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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 details.

Quick to respond

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.

“Currently, 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,” notes Subramanian.

On a local scale in South Africa, the Company is more than half-way through its 2012-2019 strategy, which the CEO says will grow ArcelorMittal’s footprint on the continent.

“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,” Subramanian concludes.

Jefrey manufactures a large range of materials handling equipment including:

The Jeffrey brand has been a highly successful product, which has been locally manufactured and supplied in South Africa, for the past 50 years.

We serve large industry including mining, steel-making, construction and forestry across the continent. We provide after-market support including parts and service for our full range of products.

Tel: +2711 849 8103 Cell: +2782 880 2325 Email: info@jefrey.co.za

ArcelorMittal South Africa staff at the 2016 CEO Recognition Awards

The Vereeniging Works has two electric arc furnaces

“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 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.”

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Corporate office: Delfos Boulevard Vanderbijlpark, South Africa Tel: +27 (0)16 889 9111 Fax: +27 (0)16 889 2097

www.southafrica.arcelormittal.com