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DSI SOU TH AFRICA

FEATURE


D S I : S A’s

LEADING SUPPLIER TO THE MINE INDUSTRY

Since DSI South Africa was established in 2002 it has become the strata control partner of choice throughout the country’s mining industry; founder and managing director Nigel Henson explains how he overcame determined competition. 2

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DSI South Africa FEATURE

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SI stands for Dywidag Systems International. The name bears some explanation – Dywidag is contraction of Dyckerhoff & Widmann AG, a German construction group that has its origins in the 19th century, and which has expanded its presence across Europe, and into Australia, the United States and Latin America. It specialises in products associated with tensioning within concrete structures. DSI South Africa is part of its ‘underground’ arm, which extends this expertise into comparable problems associated with mining and tunnelling works. It is 50 percent owned by DSI International, 50 percent by Capital Africa Steel, an investment group with interest in the metals sector. The popular conception of a mine is a series of tunnels, the roofs of which are supported by pit props. There’s some truth in that but the forces that start to act once you start to excavate the earth and disturb its natural equilibrium are very complex, explains Nigel Henson, Managing Director of the Johannesburg-based company. “Some coal mines can be a kilometre wide and 15 kilometres long: there can be a tremendous amount of forces acting on an excavation like that and they all have to be neutralised by installing roof bolts and rock bolts to prevent any rock bursts or other catastrophes.” DSI moved from construction into the underground arena when in 2000 it bought ANI Strata Products, the ‘strata control’ arm of Australian National Industries, a company with diverse steel industry interests. The following year DSI approached Henson, then MD of Murray & Roberts; South Africa’s biggest strata control business, inviting him to set up a branch of DSI in South Africa. Breaking into this business was not the easiest thing to do. The incumbent suppliers

of rock ties and roof bolts combined to make it difficult for DSI to obtain the raw material is needed, and for its first two years, 2002 and 2003, the new company recorded a loss. However in 2004 it made a profit that has grown steeply and steadily since then. As Henson laconically summarises it: “We started in 2002 and built ourselves to be the biggest supplier in South Africa.” Make no mistake, strata support is big business and every mine depends on a good supply of rock bolts, cable bolts, tensioners, liner plates and the like. The market in South Africa is huge, about the third biggest in the world after China and the USA according to Henson. “Nobody knows quite how big the China market is but in the USA they consume 10 million units a month. South Africa consumes about 1.5 million, around the same as India and Australia.” Of this, DSI has share of between 30 and 40 percent he estimates; not bad for a company that came in less than ten years ago. The product is all manufactured locally at the large Johannesburg plant, where some 250 people are employed. “When we started we were operating on a tight budget in terms of equipment but we now have one of the most modern and automated plants in the southern hemisphere,” he claims. However the people are the secret weapon; the reason behind DSI’s success in what is essentially a commodity market. There isn’t that much to differentiate between one manufacturer’s bolt and another’s, Henson is the first to admit; the product is specified by the client. What makes the difference is the quality of the people involved and the service they are able to give. “Our policy is to get the best people and pay them better than the others can. At the end of the day the added value

We started in 2002 and built ourselves to be the biggest supplier in South Africa

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DSI South Africa FEATURE

you give to your clients is going to tell. We are innovative and spend a lot of time developing new products and finding solutions for our clients so they come to us with any problems before going to anyone else.” He has never been tempted to get into a price war having seen companies go under as a result of sacrificing margin while chasing volume. In a mature market like this, there is only so much opportunity for expansion in the home market. There will be opportunities in other parts of Africa, with Australian, European and American mining companies investing in Tanzania, Zambia, the DRC and Mozambique as well as the other countries in the SADC region. DSI intends to get a share of the action, but Henson counsels caution – it is no good setting up production facilities in a country that can’t support it with the infrastructure and skills that it needs, and which are present in South Africa. Nevertheless there is new business to be had in South Arica itself. When the 80-kilometre public transit Gautrain project was inaugurated four years ago to link Johannesburg, Pretoria and the OR Tambo International Airport it was the largest rail infrastructure project under construction in the world, classed alongside London’s Crossrail, Canada Line Rapid Transit, Gotthard Base Tunnel, and Guangzhou-Shenzhen-Hong Kong Express Link. DSI in Germany had plenty of experience in civil tunnelling and the South African company was able to win the contract from Bouygues Travaux Publics under the Bombela Consortium against stiff competition, importing specialised double corrosion protection (DCP) rockbolts - the first time this technology had been used in South Africa. It then added them to its own production

We now have one of the most modern and automated plants in the southern hemisphere

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portfolio. “This particular type of bolt is ideal for complex engineering structures and aggressive rock conditions owing to our technology which provides long-term defence against the groundwater within the rock,” says Henson. “We did a good job, and it gained us some useful international networks.” For the Gautrain, having adapted the lengths of the anchorages to specific


Another rather different contract was to stabilise the underground elements of Eskom’s Ingula R20 billion pumped storage power station in KwaZulu Natal. That contract will be completed by the end of

Our policy is to get the best people and pay them better than the others can requirements, DSI South Africa produced and supplied the rock bolts to the job site just in time. Service at this level is second nature to a company that delivers job critical components in large quantities to its mining customers, and is a good example of how contractors can cut cost by partnering with a supplier which puts service first.

2010, however Eskom is planning to build further peaking stations such as Project Lima, the 1,500 MWA pumped storage scheme planned for Mpumalanga. However the bulk of DSI’s turnover will come from mining for the foreseeable future, Henson predicts. END www.southafricamag.com

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South Africa Magazine, Suite 9 and 10, The Royal, Bank Plain, Norwich, Norfolk, UK. NR2 4SF TNT Magazine, 14-15 Child’s Place, Earl’s Court, London, UK. SW5 9RX ENQUIRIES Telephone: 0044 (0)1603 343267 Fax: 0044 (0)1603 283602 emailus@southafricamag.com SUBSCRIPTIONS Call: 00441603 283573 subscriptions@southafricamag.com

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P.O. Box 6059 Homestead 1412, South Africa Tel: + 27 - 11 - 878 68 00 Fax: + 27 - 11 - 878 68 11 Email: dsi@dywidag.co.za

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DSI FEATURE