Columbus Stainless

COMPANY PROFILE

2015

Columbus Stainless

www.columbus.co.za | +27 (0) 13 247-9111

company profile

‘Prime, on time, every time’ Editorial: Ajuanne Payne

Stainless steel plays a major role across a wide range of varying industry sectors. From the hygienic preparation or storage of food and drink, to the components used in the automotive industry, it is an essential commodity and one which new applications are found for year-on-year. In this month’s issue we speak to Lucien Matthews, CEO of SA’s premier stainless steel producer and one of Africa’s largest single site manufacturers, Columbus Stainless, who explains to us just what makes the company tick…

The only producer of stainless steel flat products on the African continent and a cornerstone of the South African industry, Columbus Stainless was established five decades ago in 1964 and has grown over the years into the respected market leader it is today.

Used as an essential material across a varied array of industry sectors, from the building and construction and fabrication industries, to the automotive and service sectors, stainless steel is an indispensable commodity with new applications for the material found year-on year.

Due to the huge potential for stainless steel and the high levels of demand for the product from so many different industry sectors, Columbus has remained completely committed to producing it throughout its 50 year history. It is one of the

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leading suppliers of stainless steel to the domestic market and internationally, and is part of Acerinox S.A. (Spain), a major global stainless producing group that holds a 76% share in Columbus.

A CORNERSTONE OF THE LOCAL INDUSTRY Lucien Matthews, CEO of Columbus Stainless and a man with a long track record in the industry, both locally and abroad, affirms his company’s unswerving dedication to stainless steel – a huge contributing factor to its long-term success: “We have absolute faith in stainless steel, it grows at 5% per year, and from the beginning until today we have been focused on producing stainless steel and haven’t changed that.”

As part of Columbus’ commitment to its product,

Columbus Stainless

the company is distinguishable by its vision for the growth of stainless steel consumption in South Africa and its role in providing world-class services and products and in attracting new investors to the country.

At present, around 25% - 30% of Columbus’ products are sold locally into the South and sub-Saharan African markets, with the remaining percentage being exported internationally via a network of agents and group sales outlets operating in Europe, the Americas, the Middle East and the Far East. One of the obvious advantages of being part of a larger group, Columbus products are exported to 54 countries around the world.

To put some perspective on Columbus’ significance to the local market and just how much the company is producing, as the largest stainless

steel manufacturer in the Southern Hemisphere, it produces more than 80% of all stainless steel flat products used in South Africa and still exports the majority, over 70%, overseas.

With a production capacity of more than 600,000 tons per year, Columbus accounts for around 3.5% of the GDP of Mpumalanga and (according to most up-to-date figures) contributes 0.26% to the GDP of the whole country. Downstream industries, such as automotive, building, etc., making use of the stainless steel manufactured by the company, contribute a further 0.14% to South African GDP.

‘OUR PEOPLE MAKE IT HAPPEN’ Offering an extensive range of stainless steel products in a variety of austenitic, ferritic, utility and duplex grades, cold or hot rolled and produced

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company profile in its plant in Middelburg, Columbus currently employs around 1,900 permanent and contract staff to run its complex operation.

The company recognises that its growth and success is directly dependent on the expertise and well-being of its employees and as such, has developed a culture of learning over the years.

Columbus focuses heavily on the continuous enrichment of its staff members through acquiring new knowledge and the honing of management and leadership skills in its top-level staff members.

Recognising that technology and innovation has to be ‘directed by the brightest minds’, the skills profile of Columbus employees is comparable with the international industry average.

“We always recruit people with 12 years schooling as a minimum, and they must have maths and science,” explains Matthews.

“Those people that we recruit are given further theoretical training for about six months and then practical training inside the factory. Some of the recruits become steel-makers, which means they become operators which move up to various levels in our business. Then we also train artisans, those are the people that will become electricians, fitters and turners and boiler makers.

“We were very instrumental in pushing the use of stainless steel in the automotive industry”

‘Set in Steel’: Air Products South Africa and Columbus Stainless forge a successful long-term partnership Partnerships are long-term commitments. This is the approach characterising the relationship which Columbus Stainless and Air Products South Africa have enjoyed for more than 20 years. This relationship has been further cemented through the recent renewal of the argon gas supply agreement.

With a number of strategically located owned and operated facilities around the country, of which the majority are argon-producing, Air Products is the market leader in argon production in Africa, and the largest supplier thereof to Columbus Stainless. Part of the journey with Columbus Stainless has seen Air Products shift its focus from merely producing and supplying argon, to providing complete security of supply. This change of strategy has been a critical turning point in enhancing the customer relationship.

Supply chain excellence and efficiencies are supported by Air Products’ long-term capital investment strategy, which leads to direct benefits for key customers, such as Columbus Stainless. This has resulted in the addition of new argon-producing plants, as well as the modernisation of the company’s fleet.

Air Products is proud to be a critical supplier of argon to Columbus Stainless, providing quality service, close communication and interaction which together ensure long-term sustainability and supply chain efficiency: ‘Service that delivers the difference!’

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Columbus Stainless “We have a continuous program of training people because we try to encourage them to stay here long-term. We also bring in graduates or engineers in training, expose them to different sides of the business and then also motivate them to grow in the business. We encourage people to stay here for long periods because we always promote internally.

“Of course, as people are promoted, the operators will eventually move up to possibly become team leaders and then we will send them for team leader training. Once people are promoted into the ranks of mid to senior management, we normally send them on management development programs.”

Columbus likes to share its success with its staff members, and one such occasion was last year when it celebrated a big anniversary. “Last year we had 50 years being on the site and we celebrated that along with the retirement of the previous Chief Executive Officer, Dave Martin.

We had a big celebration function with our staff which is how we normally do it at Columbus.”

CURRENT DEVELOPMENTS Because of Columbus’ formidable reputation as a stainless steel giant in South Africa, the company has long recognised the importance of helping to develop the industry locally and subsequently works closely with government for the benefit of the stainless steel industry, as well as for the downstream manufacturers who use the product.

“We are very active with the local government and national government in assisting them with getting downstream manufacturers to come in to South Africa and settle,” explains Matthews.

“It’s a continuous thing that we’re always in discussion about and promoting and trying to push downstream manufacturing inside South Africa. It’s something we have been doing for many years and that we will continue to do.”

“We were very instrumental in pushing the use of stainless steel in the automotive industry, in catalytic converters, and we will keep looking for industries that use stainless steel and that would like to settle and consume in South Africa, like the rail passenger cars which use stainless steel

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company profile

on the sidewalls.

“At the moment, it’s a challenge here because the manufacturing industry is under huge pressure in South Africa, and one needs to look at the longer term objectives and benefits and keep pushing that.”

In South Africa, the government is keenly focused on factories and heavy industry as an employment creator and economy driver and more than ever public and private sector partnerships are energising investment and innovation both locally and across the continent, with Columbus being one of the companies contributing to that.

The next step for Columbus is to continue its focus on local industry while also ensuring it is in the best position to service the growing demands of the fast growing economies of other sub-Saharan African countries.

“We will now start looking more actively at Africa for any growth in that region because it is starting to see some areas of activity,” explains Matthews.

“We will now start pushing up into sub-Saharan Africa because we do see some development, as mines go in and other kinds of infrastructure development opportunities start opening, so I think

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we will hopefully see more growth in South Africa and Africa. If that does happen then later we may invest in more capacity.”

More immediately than any planned growth into Africa, Columbus has plans to invest further in its facilities and product – something which it is continually dedicated to doing and which is a key contributor to its competitiveness.

“We will probably invest in some finishing line capacity, that’s where we take the big, 2030 ton coils and we cut them up into one to two ton packs of sheet for customers. We will look at increasing that so that we can push the throughput and improve customer satisfaction by delivering what the end users and customers want. We will also continue to make small modifications to existing lines to further improve quality, yield and productivity.”

A STRONG FOUNDATION Over its years in business, Columbus has shown time and again that it can flourish despite changes in the market and economic landscape.

The company has shown itself to be a shrewd and flexible operation and is not shy of investing

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in the short term to ensure success in the long term.

Matthews explains: “Columbus has had absolute focus on productivity and efficiency, along with commitment and faith. Sometimes you go through a cycle, commodities go through ups and downs and so what we’ve done is we’ve taught our staff flexibility; that things change, it’s a natural part of life and you need to remain open-minded to that.

“There’s also been significant investment on two fronts. One is investing in the people. We bring the people in, train them up and keep them here for many years, so they get to know the industry and we get efficiency like that. We are a very supportive company and we offer good working conditions and benefits.

“The other one is continuous investment in the facilities to improve productivity through efficiencies and sometimes the move higher up in the value scale of products.

“That’s where we are continuously investing - the profits are continuously put back into the business and driving it forward and making sure we stay efficient.”

Another key strategic move that has enabled the company to flourish is becoming part of the Acerinox Group in 2002, with all the benefits that come with being part of a well-established international frontrunner.

Columbus is able to benchmark itself not only against its competitors locally, but to its global counterparts in the stainless steel industry.

In Matthew’s view, along with an absolute focus on safety and health, the big drivers for Columbus’ success have been its focus on reinvestment in the business and the expertise and well-being of its staff members.

“There’s safety, there’s looking after people and then continuous improvement is probably the big driver as well. We always push people for another improvement. Sometimes it changes a little bit, sometimes you want more production, more throughput, more tons, sometimes you need to just improve quality and we generally also introduce new products or slightly different products so it is also a learning and innovative company. People like challenges in Columbus and tackle them with a lot of energy,” he concludes

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