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Send  Share  RSS  Twitter  29 Sep 2011

ENGINEERING: Hulamin To Close CT Branch

 



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ALUMINIUM giant Hulamin is closing down its extrusion plant in Cape Town at the end of this month.

This is another blow the local economy, where a number of ‘old economy’ manufacturing entities appear to be battling to stay competitive.

The closure of Hulamin’s Cape Town extrusion plant is the third time in 12 months that a major corporate has opted to close a plant in Cape Town, following on AECI’s decision to shut down SA Nylon Spinners and Murray & Roberts’ decision to close its Cisco specialised steel operation.

Hulamin’s decision was relayed in a single line in Hulamin’s recent interim results – rather short thrift for an operation that was one of three extrusion operations in the company (the others are situated in Pietermaritzburg and Midrand).

It seems the decision was taken quite suddenly. CBN could not find any evidence in annual reports or previous financial reports that the plant was under threat of closure.

The decision to close the Cape Town extrusion plant in Epping comes despite Hulamin reporting that its order book remains healthy as a result of solid demand.

The closure also comes at a time when Hulamin invested R75 million to increase rolling slab capacity in Pietermaritzburg, where production is being ramped up to full capacity.

But the company indicated that while local sales showed modest recovery, the lacklustre building and construction sector continued to constrain sales of extrusions. Extrusion sales were also hampered by an influx of low priced imports.

Extrusions are a little different to rolled products. You’re constrained on sales and have significant excess capacity. And there are the increases in the low-cost imports from China,” says Hulamin CEO Richard Jacobs.

CBN hears certain of the Cape Town production capacity will be re-located to Pietermaritzburg and Midrand.

The closure of Hulamin’s Cape Town extrusion plant does not completely sever the company’s ties with the region.

Hulamin is still involved in a building systems joint venture with local claddings specialist Mazor.

According to a presentation, the venture is trading profitably and new systems are being rolled out with energy efficient envelopes (buildings) a key focus.


 
 
 
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