Local metal gets a shine

2014-09-09 00:00

HULAMIN, BHP Billiton and the Aluminium Federation of South Africa are commencing with an innovative project for entrepreneurs to make leading-edge aluminium products, and to significantly add value to locally produced metal that would otherwise be exported.

The project, the Aluminium Beneficiation Initiative (ABI) aims to initially identify, then support and train 100 to 150 entrepreneurs over three years, said Reginald Nyandeni, a director of ABI.

Nyandeni said in an interview with The Witness that an agreement had been signed with the government-owned Small Enterprise Financial Agency (Sefa), for it to commit a minimum of R80 million to the project.

Nyandeni said Hulamin, a mid-stream producer of mainly aluminium rolled products, exports around 75% of its production, while the country also imports a significant amount of downstream aluminium products.

For Hulamin, it makes more financial sense to sell more product on the local market, said Nyandeni.

He said they expect that the entrepreneurs will each be able to take up at least 100 tons of aluminium from Hulamin every year, which means potentially 10 000 tons per year of additional sales to Hulamin.

Currently it sells about 60 000 tons per year into the local market, so the project represents a significant growth opportunity, said Nyandeni.

He said Hulamin had a track record of success of developing entrepreneurs.

In 1996, Hulamin only spent R1,3 million of its annual procurement on goods from businesses owned by black entrepreneurs. This figure has risen to R55 million in 2013 and most of it was with entrepreneurs that the group had helped develop.

BHP Billiton in Richards Bay have a similar record with entrepreneur development. BHP Billiton’s R50 million Entrepreneur and Supplier Development Centre in Richards Bay has helped to create 70 entrepreneurs in two years, one of whom is already employing more than 800 people, said Nyandeni.

He said entrepreneurs who participate in the ABI project will be chosen by a committee with input from institutions such as the business school at Wits, Stellenbosch University and Engels Enterprise Development.

The choice of entrepreneurs would hinge on product and innovative ideas, although a spin-off would be “sub-projects” arising from the identification of entrepreneurs who can participate in the manufacture of more basic aluminium products.

“We want to develop a pipeline of entrepreneurs,” he said.

He said the training provided would be high level, and would involve aspects such as unlocking technology licences and patents.

Nyandeni said a website would start operating from October 1 where prospective entrepreneurs who wish to participate in the programme could enter their details.

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