The South African foundry is at a crossroads according to the Scaw Metals Group. Not only is the industry suffering from the effects of a depressed market, but uncompetitive local raw material costs are threatening the future of the industry.
According to the Industrial Structures and Skills in the Metals Beneficiation Sector of South Africa report, the number of foundries has dwindled over the past couple of years. In the 1980s, foundry numbers dropped to around 450. In 2003 that number plummeted to just over 200. Between 2007 and 2011, the number fell by 13% and the employment figure in the industry fell by 30% over the same period.
Mr Ufikile Khumalo executive chairman of the Scaw Metals Group said that “The local industry is in real trouble. Due to the continuing poor local demand experienced over the last couple of years, the remaining players in the industry have not invested in the required capital equipment and new technologies.”
Not only is the increasing input cost of raw materials like scrap metal to blame for the industry’s current dilemma, but the annual hike in electricity costs, poor and inconsistent local demand for foundry products and rising imports are all contributing factors.
Mr Khumalo said that “Scrap metal is the key raw material ingredient in the foundry industry. Competitive scrap metal pricing has the potential to reignite the local foundry industry. We regard the conversion of scrap metal into secondary metal products a priority against simply exporting a key resource such as scrap metal.”
The lack of skilled labour has also been labelled by Khumalo as being a concerning issue for the local industry. Mr Khumalo said that “New training for the employees of foundries has not been prioritised by local companies, which has resulted in the foundries generally having an ageing workforce.”
Mr Khumalo said that the only way for the local industry to get back on its feet is by the help of the South African government. The Department of Trade and Industry and the Department of Economic Development must implement the required measures, in a coordinated effort to support the foundries.
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