Slide 1 South African Foundry Market Adrie El Mohamadi 2 nd BRICS Foundry Forum Beijing, China 9 May 2012
May 11, 2015
Slide 1
South African Foundry MarketAdrie El Mohamadi
2nd BRICS Foundry ForumBeijing, China
9 May 2012
Slide 2
1. South African overview
2. Foundry industry structure in
South Africa
3. NFTN looking ahead
Presentation Outline
Slide 3
South Africa
1%
11%
8%
30%
14%
10%
9%
11%
6% Province Population (2011 est.)
Gauteng 11,328,203
Kwa-Zulu Natal 10,819,130
Eastern Cape 6,829,958
Limpopo 5,554,657
Western Cape 5,287,863
Mpumalanga 3,657,181
North West 3,253,390
Free State 2,759,644
Northern Cape 1,096,731
59 million
Slide 4
Contribution to the GDP in South Africa
Geographical location of foundries in South Africa
ProvinceNo. of foundries ‘03
No. of foundries ‘07
No. of foundries ’11
% of total foundries ‘11
Gauteng 110 108 97 54%
Kwa-Zulu Natal 20 26 24 13%
Western Cape 26 16 15 8%
Eastern Cape 16 10 10 6%
Free-State 10 7 6 3%
North-West 10 9 5 3%
Northern Cape 6 3 3 2%
Other 15 15 18 10%
Province Contribution to GPD ‘07
Gauteng 33,5%
Kwa-Zulu Natal 16,2%
Western Cape 14,5%
Slide 5
Industry structure by foundry type
Foundry Type
No. of foundries in ‘03
No. of foundries in ‘07
No. of foundries in ‘11
2011 v/s 2007 change in %
Ferrous (Iron and Steel) 110 110 67 -39%
Non-Ferrous (Aluminum, Brass & Zinc) 117 119 70 -49%
High Pressure Die-casters 36 32 32 0%
Mixed Metal 35 35 34 -3%
Investment Casting 7 4 4 0%
Art Foundries 13 12 12 0%
Total number of Foundries 213 211 184 -13%
Significant decline in numbers since 2007• Due to:
• difficult economic conditions• consolidation, mergers & acquisitions
Slide 6
Estimated annual production by metal type
Metal Type
Est. annual production ‘03 (tons)
Est. annual production ‘07 (tons)
Est. annual production ’11 (tons)
Growth 2011 v/s 2007 (%)
Non-Ferrous 84,000 97,800 91,400 -7%
Aluminum 66,000 77,800 74,600 -4%
Brass 9,000 8,200 8,400 2%
Bronze 6,000 7,600 5,700 -25%
Zinc 3,000 4,200 2,700 -36%
Ferrous 422,000 562,600 479,950 -15%
Grey Iron 110,000 147,000 170,200 16%
Ductile Iron 100,000 86,000 123,800 44%
Other cast iron 85,000 145,600 61,250 -58%
Steel 123,000 179,100 118,000 -34%
Stainless steel 4,000 4,900 6,700 37%
Total annual production 506,000 660,400 571,350 -13%
Industry is highly concentrated:• Top 3 non-ferrous foundries = 67% of production• Top 11 ferrous foundries = 62% of production
Slide 7
Markets served by the SA foundry industry
General En-gineering 22%
Mining 33%
Automotive 33%
Construction 5%
Agriculture 5%
• Export and local markets
• Highly Competitive environment
• Competing with the rest of the world
Slide 8
Main casting processes used in foundries
Process TypeNo. of foundries using the process (%)
Sand
Bonded sand 44%
Green sand 34%
Shell 14%
Permanent Mould
Gravity 21%
Low Pressure 5%
High Pressure Die-casting 7%
Other 3%
Foundry Type No. of foundries No. of foundries (%)
Production 23 24%
Jobbing 50 52%
Prod. & Jobbing 24 25%
Gauteng
Slide 9
Employment in the foundry sector
• Estimated no. of direct employees in 2011 – 11,600
- 80% of employees are previously disadvantaged individuals
• Additional 12,400 admin & management staff are employed by foundries
• Estimated no. of indirect employees 4,000
- 180 – 200 supplier companies
30%
55%
15%
Shop-floor analysis
Melters
Moulders
Patternmakers
Total of 24,400
Slide 10
Interactioncreates aneffective
innovationsystem
Education & Training System
Primary EducationTechnology-related Secondary Education
Skills Development for the WorkplaceHigher Education, especially in
Engineering
Innovation Capability at Firm LevelCreativity of Employees at all Levels
Innovation-friendly organizational structureNetworked Research and Development
Technology-related Institutions
Applied Research & DevelopmentResearch & Development Financing
Technology Transfer & Extension Testing, Measuring, Quality Control
& Standards CertificationIntellectual Property Rights Protection`
Political, Legal, Regulatory and Macro-Economic Framework that stimulates learning and innovativeness
Key roles and activities of various stakeholders in the innovation system
Slide 11
Technology-related Institutions
Innovation Capability at Firm Level
FOUNDRIES
Education & Training System
Political, Legal, Regulatory and Macro-Economic Framework
Technological Capabilities
emerges from interaction
SA foundry innovation system
Slide 12
National Foundry Technology Network
NFTN is the culmination of a significant
government and industry association-led
effort to develop a globally competitive South
African Foundry industry through appropriate
skills training, technology transfer and diffusion of
State-of-the-art technologies
Slide 13
NFTN Delivery Model
• Activities that targets the improvement of individual
foundries and their immediate environment (firm level)
• Activities that targets an impact on the foundry industry as
a whole (system level)
Slide 14
Types of South African Foundries
Type 1 companies Type 2 companies Medium- to large size Public companies or
subsidiaries of multinational corporations
Technologically sophisticated processes
Updated equipment
Small to medium size Family-owned business Reliance on experience / tacit
knowledge and trial-and-error Relatively outdated equipment
Slide 15
NFTN Areas of foundry support
Key challenges identified by industry
1.Skills and training (HCD)
2.Environmental and waste management
3.Energy management
4. Raw material input
5.Localisation and market development
6.Capital and investment
7.Technology, Innovation and Competitiveness
NFTN support areas
1. Human Capital Investment
2.Cleaner production
3.Expansion of foundry industry
4. Science, Technology and Innovation
5. Competitive Improvement
Slide 16
Students currently in Germany on a collaborative Masters programme
Technical training courses are offered on specialised areas within the foundry industry
Second national training centre is being planned and will be launched in March 2013
3 x curricula has been developed for Foundry melter, moulder and engineering patternmaker to train artisans
Under graduate degrees are being offered relevant to the foundry industry by a number of our Higher Education
institutions – with specific mention to UJ – Foundry specific
Skills programmes are being presented to foundry employees to improve the skills level within foundries
Human Capital Development
Placements of Interns within the foundries
Slide 17
Waste activity
• The compilation of a guideline document for use by Foundries, discussing requirements in terms of the National Environmental Management Act (Act 107 of 1998) and the National Environmental Management: Waste Act (Act 59 of 2008)
• The compilation of a motivational document for adjustment of environmental legislation pertaining to foundry operations in terms of the National Environmental Management: Waste Act (Act 59 of 2008)
Slide 18
Waste activity
• The compilation of a guideline document for use by Foundries, discussing requirements in terms of the National Environmental Management Act (Act 107 of 1998) and the National Environmental Management: Waste Act (Act 59 of 2008)
• The compilation of a motivational document for adjustment of environmental legislation pertaining to foundry operations in terms of the National Environmental Management: Waste Act (Act 59 of 2008)
Slide 19
Competitive Improvement
• Conducted in 2009
• 103 foundries in total
participated
• Opportunity for foundries to get a comparison
• Took place during 2009/10
• 26 Foundries were selected
• Suppliers to SOEs
• CSIR & Mintek were the
implementing partners
• Conducted in 2011
• Overall positive response
• Lessons learnt incorporated
into the NFTN CII
• First NFTN CII is the Vaal Foundry Initiative
• Also targeting Valve Cluster, M&HV Cluster,
KZN & Automotive
cluster
NFTN Benchmarking DST TAP
Satisfaction survey NFTN CII
Slide 20
Foundry Cluster Support Initiative
Agree on technical assistance &
implementation
Baseline Assessment
Identify the performance gaps
Identify the possible skills development
needs within cluster
Determine market opportunities and
performance specifications
Common foundry problems such as
Energy, Waste management etc.
addressed collectively
ID of longer term R&D opportunities
Access to interns & academic institutions
Mobilise specific public support
Access to mobilisation fund
Hosting institution
such as VUTFor non-routine services such as:
- Problem solving- New product development- Casting simulation trials- Productivity improvement
On going M&E
Specialised, recognised
& subsidisedSAIF skills
development mandate
Demand focused
Hosting institution is required to
appoint a management
committee & use and build on the NFTN supplier
database
Slide 21
Adrie El Mohamadi
National Foundry Technology Network
Tel: +27 12 841 2127
www.nftn.co.za
Thank you