south african institute of foundrymen

6th BRICS FOUNDRY FORUM

The Foundry Industry in South Africa

16th May 2016

John Davies

SAIF CEO

South African

Institute of

Foundrymen

1.  Introduction to SAIF 2.  Status of the South African Foundry Industry 3.  Interventions by State Departments in Support of the

Foundry Industry 4.  International Co-operation 5.  Conclusion and Thanks

PRESENTATION OUTLINE

§  Constituted in 1938 as a branch of the Institute of British

Foundrymen (IBF) now (ICME)

§  Established as the SAIF in 1964

§  Is a non – profit company

§  Focus on skills development, training and education

§  Membership – 186 of which 89 are companies

§  Represents the Voice of the Foundry Industry

§  To improve the competitiveness of the South African Metal Casting

Industry. Generating sustainable growth and employment

opportunities in the manufacturing sector

1. The South African Institute of Foundrymen

§  The National Foundry Technology Network (NFTN) §  The Aluminium Federation of South Africa (AFSA) §  The Metal Casting Technology Station (MCTS) hosted and the

University of Johannesburg §  The Department of Science and Technology (DST) Through the

agencies of the CSIR and Mintek to assist industry and conduct research

§  The University of Johannesburg, Vaal University of Technology, Cape Peninsula University of Technology and the Tshwane University of Technology

§  The BRICS Foundry Association

KEY PARTNERSHIPS

§  The industry has contracted since 2007 §  Output in 2015 of 374,700tons is down from 660, 400 in 2007, or 43

percent lower §  170 Production Plants in SA – Down by 36 percent since 2007 §  Big plants (more than 1000 people) to very small (less than 20 people) §  Some in – house foundries producing only for their own use §  Iron, Steel, Aluminium, Zinc, Bronze and Special Alloy Castings are

made §  Added Value: Machining , Coating, Assembly is evident in some

foundries §  Spread all over the country: Gauteng, KZN, W/Cape and E/Cape §  More than 80% of manufactured products contain castings!

2. SOUTH AFRICAN FOUNDRY INDUSTRY

South Africa

Province Population (2014 est.) %

Gauteng 13,200,300 24,0%

Kwa-Zulu Natal 10,919,100 19,9%

Eastern Cape 6,916,200 12,6%

Limpopo 5,726,800 10,4%

Western Cape 6,200,100 11,3%

Mpumalanga 4,283,900 7,8%

North West 3,707,000 6,7%

Free State 2,817,900 5,1%

Northern Cape 1,185,600 2.2%

Total 54,002,000 100%

THE STATUS OF THE FOUNDRY INDUSTRY IN SOUTH AFRICA

Contribution to the GDP in South Africa

Geographical location of foundries in South Africa Province No. of foundries ‘2015 % of total foundries ’2015

Gauteng 114 66% Kwa-Zulu Natal 20 12% Western Cape 14 8% Eastern Cape 8 5% Free-State 5 3% North-West 4 3% Northern Cape 3 2% Mpumalanga 2 1%

170 100

Province Contribution to GDP ‘2015 Gauteng 34,7% Kwa-Zulu Natal 15,8% Western Cape 14,0%

Industry Structure By Foundry Type

Foundry Type

No. of foundries in ‘11

No. of foundries in ‘15

2015 v/s 2011 change in %

Ferrous (Iron and Steel) 74 86 + 16% Non-Ferrous (Aluminum, Brass & Zinc) Sand, Gravity, Low Pressure 70 56 - 20%

High Pressure Die-casters 31 23 - 26%

Investment Casting 5 5 0%

Total number of Foundries 180 170 - 6%

v  There are 44 foundries making castings in steel and / or stainless steel, of which 3 are investment casting foundries

v There are an additional 13 art casting foundries and 11 spin casting operations

Estimated Annual Production by Metal Type

Metal Type

Est. annual Production ‘03 (tons)

Est. annual production ‘07 (tons)

Est. annual production ’12 (tons)




Aluminum 66,000 77,800 21,000 22,000 22,000 22,000 Brass 9,000 8,200 Copper

Based 14,300

9,100 8,500 8,500 Bronze 6,000 7,600 Zinc 3,000 4,200 1,400 900 800 700 Grey Iron 110,000 147,000 161,000 155,000 138,000 140,000 Ductile Iron 100,000 86,000 59,000 47,000 61,500 63,000 High Cr White Iron 85,000 145,600 54,000 28,500 40,500 42,000 Steel 123,000 179,100 118,000 106,000 103,000 93,000 Stainless steel 4,000 4,900 5,800 6,500 6,000 6,000 Total annual production 506,000 660,400 416,500 375,240 380,300 374,700

v Note: All the above exclude grinding media produced by SCAW Metals Goup

Markets served by the SA foundry industry

Automotive 25%

Mining 25%

General Manufacturin

g 25%

Infrastructure 5%

Agriculture 5%

Railways 10%

Other 5%

Foundry markets

Employment in the Foundry Sector

•  Estimated no. of direct employees in 2016 – 9,000

•  Estimated number of indirect employees 4,000 (Adding Value to Products)

30%

55%

15%

Shop-floor analysis

Melters

Moulders

Patternmakers

Total of 13,000 Skill Base

Foundry Industry Profile Challenges: •  Industry is in decline – High levels of imported castings and products •  Lack the volumes to achieve manufacturing economies of scale •  Aged Infrastructure for capital equipment parts •  High levels of capital investment needed •  Low capacity utilization at many foundries •  Difficulties in becoming environmental compliant

•  Limited use of computational design software

3. Interventions by the Sate in Support of The Foundry Industry

National Foundry Technology Network (NFTN) •  Formed 2008 to improve the global competitiveness and

transformation of the Foundry Industry

•  Funded by the Department of Trade and Industry (DTI)

•  Focused interventions in Skills Development, Technology Transfer

and Competitiveness improvements.

Interventions – Human Capital Development

Challenges: South African foundry skills lag other BRICS countries and the world

Optimum training model for key skills.

Skills Upliftment programs: •  Artisans: Melter, Moulders, Patternmakers – Gauteng Foundry Training Centre (GFTC) •  Foundry Skills: Workers – SAIF Partnership in Training •  Professional Skills: Technical and Engineers – New Foundry

Generation Forum

Concern: Foundries do not have the required skills to grow and capitalize on opportunities

§  Partnership with Germany and MCTS to improve energy and material efficiency

•  Developed simulation software for High Chrome White Iron Castings

•  Improved re-use and reclamation of foundry sand and investigated

recycling opportunities

•  Membership or WFO and hosting of WFO Technical Forum in March

2017

Interventions – Technology Transfer

§  Evaluate opportunities in foundries for reduction in energy use. (Including alternative sources = solar energy)

§  Assistance to obtain ISO 9001 and other quality accreditation.

§  Assistance to foundries to comply with environmental standards for

emissions and spent sand disposal

§  Assisted in new product development with “front end” engineering tools

Interventions – Competiveness Improvements

§  Partnership between Technology Localization Implementation Unit (TLIU), The Vaal University of Technology (VUT), and Private Sector Company Ametex representing MAGMA

§  To assist foundries to use solidification simulation technology

§  26 Projects completed with 18 foundries

§  Part subsidisation by TLIU

3.2 Casting Simulation Network

§  Funded by Department of Science and Technology

§  Assist in transfer of Technology to Foundries

§  Testing of Sand and Cast Metal Samples

§  Design and Simulation

§  Training and Education

§  Special focus on very small foundries

3.3 Metal Casting Technology Station University of Johannesburg

§  Offers foundries assistance in design, simulation and mould and core 3 D printing

3.4 Vaal University of Technology

3.5 Department of Economic Development

§  Has introduced a price preference system for scrap metals to improve

availability and cost for foundries

§  Has developed guidelines for the export of scrap metal

§  Assists foundries to improve energy efficiency through conducting

assessments and implanting recommendations

§  Provides support to achieve compliance with environmental standards

and legislation

3.6 National Cleaner Production Centre

3.7 Department of Health / Energy

§  Provided training via International Atomic Energy Agency in the regulation

and control of radiated materials found in metal scrap

§  ALL assist with research and development in some aspect of metal casting technologies or the training and education of technicians, technologists and engineers

3.8 Other Institutions (MINTEK, CSIR, Universities)

3.9 Department of Higher Education

§  Through the Metals and Engineering and Related Industries Sectorial

Training Administration (MERSETA), assists in the development of

training programmes and the training of apprentices

§  The SAIF, in conjunction with one or more of its partners has established links with The American Foundry Society, The British Association ICME, The German Foundry Association, including strong links with Freiberg University and the foundry industry in Egypt, with a purpose of forming a union of foundries on the African continent.

4. International Co-Operation

5. Conclusions

•  The South African Foundry Industry is facing strong headwinds, but with assistance from the state and other institutions several opportunities can be realised:

o  Improvement of Skills and Technical Knowledge o  Increased Localisation and Import Replacement o  Foundries that are environmentally compliant o  Increased use of new Technologies

•  The SAIF will continue to leverage both increased demand and new technology to grow the industry, improve competitiveness and build human capacity.

THANK YOU

south african institute of foundrymen

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