HI-ALLOY CASTINGS
HI-ALLOY CASTINGS
Reshaping and Rejuvenating a
Foundry Mainstay
PRODUCTION: Timothy Reeder
Since 1979, East Rand-based Hi-Alloy Castings has been manufacturing castings for a range of industries, serving clients across the minerals processing, milling, crushing and heavy-clay brick manufacturing industries. Today, a change in ownership and significant re-investment in equipment and people is helping restore former glories and propel Hi-Alloy to new heights.
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INDUSTRY FOCUS: ENGINEERING
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Hi-Alloy operates from a 10,000 m2 plant on Balfour avenue in Benoni, east of Johannesburg, where it is equipped with four melting furnaces, providing approximately 12 tons per day casting capacity, focusing primarily on Hi-chrome iron to nickel and iron-molybdenum-based alloys. It also has its own in-house pattern shop, three continuous resin-moulding lines, its own heat treatment department with several top-hat furnaces and, a 14-bay fettling department, and its own core making facility. From a design perspective, Hi-Alloy has an in-house design department, working with the latest Magma simulation software. Hi-Alloy has grown to now employ a staff compliment of 137 people. “We are a ferrous foundry, and one which focuses primarily on high chrome and alloyed steel castings,” Hi-Alloy Castings Managing Director Daryl Meyer tells us. “Most of our products then enter into the mining industry as components into the minerals processing industry as slurry pumps, mill liners, dense medium cyclones etc. “We supply products exclusively into the original equipment manufacturer (OEM) market, so our main customers are big industry players, focused in the mining sector. We will provide parts to them, which they then assemble and distribute across the world through their global sourcing centres.” This effectively gives Hi-Alloy its global footprint, as Meyer explains. “Our customer base is primarily in South Africa, although we do also have one or two customers in Australia. Our products, however, are distributed throughout the mining sector globally. This means that we see it used a huge amount in Africa and Australia; even into the Far East and Russia. Our parts find their way all across the world through our customers’ brands which are themselves situated far and wide.” Hi-Alloy is undergoing something of a transformational period in its relatively long lifetime, which, as Meyer explains, is attributable to a number of important
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developments. “The business has been an operational foundry since the mid80s,” he says, “but my partner, Frans Smit and I came in and took up shareholding two years ago, so despite its long operational lifetime, it is currently under fairly new management. “Since that time, we have put two new one tonne induction furnaces into the business, but as well as this there is a lot of other investment being committed to Hi-Alloy Castings. “We have earmarked this primarily to enable us to install a whole new sand reclamation plant as well as a brand-new compressor system. As we speak, there is a lot of investment going into this business and this will continue over the coming months.” Recent IDC funding has allowed the business to fast track its investment programme in equipment upgrades, which will increase efficiencies, focus on EHS compliance and grow and secure jobs into the future. “The new sand reclamation plant has been specced, and is on order as we speak. New compressors and increased overhead craneage capacity will be installed within in the next few weeks. The plant as a whole really is an ‘old lady’ - it has been here for many years and simply needed a little TLC and some investment to sort out, which we are now well-positioned to be able to do.” It is not only the investment itself that will allow Hi-Alloy to achieve the growth that it desires, but the confirmation too that what it is doing is in line with even the most demanding expectations. “The IDC process is a very rigorous one to go through, but at the end of the day, we believe that it is about South African business owners creating jobs through sustainable, well run businesses. The saving and creation of jobs is what the IDC really centres its mandate around, so we are very pleased to have received their support.” Also crucial to garnering the IDC’s support is a demonstration of a business’s commitment to Broad-based Black Economic Empowerment (BBBEE).
This is another area in which Meyer feels Hi-Alloy is ahead of the game. “We came into the business and realised that one of the reasons that a lot of foundries have floundered in the last ten years has been a failure to take their BEE responsibility seriously; if you want to do business successfully in South Africa then this is not an option, but an imperative. We are Level Three on the new legislation, and so from a BEE-rating perspective we know believe that we are one of the best rated foundries in South Africa. “We have also assembled a new management team, which is a combination of some exceptional foundry experience and experienced management from outside of this industry. The combination of these people is changing the way that we manage our business and changing the way that we present ourselves to our customers, new and existing.” The acquisition of Hi-Alloy came about following a very careful strategic consideration, Meyer explains. “Both Frans and I came out of very strong corporate backgrounds in South Africa business, and considered this investment very strategically before deciding to invest in this industry. We chose this for a number of very strategic reasons; for starters, we felt that the mining industry had probably gone through the worst slump that it had suffered in recent memory and were confident that it could emerge, and we are seeing exactly this happen now. “Additionally, the South African foundry industry had been through a particularly tough time, with a lot of consolidation and closures during this period. This meant that those which were left standing were left to operate in a market which was significantly less competitive than had been the case previously. There were opportunities there, as a result for a foundry that was run well to really flourish. “The government had also started shifting a lot of its own focus toward support for the metals industry, in large part from a job preservation and creation
HI-ALLOY CASTINGS
perspective. The volatility of the Rand as an emerging markets currency has also made it economically far less attractive for local customers to consistently import castings from the far east. These various factors came together for us to conclude that this industry would be the good place for us to invest, and so two years ago we took up 40% ownership of HiAlloy with management control. “Hi-Alloy has always had a reputation for being a well-run, technical foundry,” he continues. “We have staff possessing hugely impressive competences, who have been in the industry for many years, who from a technical perspective are among the best in their field. Neither Frans nor I are metallurgists by trade, but alongside us we have one of the most highly respected foundry metallurgists in Anton Britz on our executive team, which serves to exemplify this focus.
“From this perspective therefore Hi-Alloy was a very alluring proposition for us, but it just needed to have its strategy to be redefined and the business to be re-configured in terms of its management structure, cost base and operational focus and value proposition.” This is exactly what Meyer and the new management have set about doing, and to already good effect, as he concludes. “In these last two years we have gone through a lot of restructuring, adding much more capacity on the manufacturing side and embarked on a campaign specifically designed to attract larger blue-chip companies back into our customer portfolio, whilst not losing focus on our loyal existing customers who have supported the business through thick and thin. “We wanted to focus on the big multinationals, because that is what we understand. As a consequence, our top
RECORDS
line has grown by approximately 35% over the last two years. This growth in itself has put pressure on the business, but through the loyal support of our wonderful customers, Hi-Alloy is well on track to achieve its budgeted targets for this year. It has been a massive learning curve for us entering this Industry, but with a superb team of experience and passion around us, and a customer base that is always willing to work with us to find solutions, we have no doubt that HiAlloy Castings is once again a major force in the South African foundry industry.”
HI-ALLOY CASTINGS +27 11 421 5874 www.hialloycastings.co.za
Industrial (Pty) Ltd
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TRANSNET PORT TERMINALS
Making SA Ports
World Class Exclusive Interview with
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OCTOBER 2017