Hulamin strikes lucrative deal

2012-11-09 00:00

JSE-LISTED aluminium semi-fabricator Hulamin has struck a deal with Bevcan, a division of packaging giant Nampak, to produce aluminium sheet for “full-bodied” aluminium beverage cans — a move that will bring recycling spin-offs and create new job opportunities at its Pietermaritzburg operations.

Hulamin CEO Richard Jacob told The Witness yesterday that the development would result in a massive move into the local market for the company.

He added that Hulamin would switch a portion of its rolled products, which have typically been exported, to the new product range destined for the South African market.

The three-year agreement will see Hulamin invest in new technology and equipment to develop the new product line.

Full-bodied aluminium cans are popular worldwide. While aluminium cans were used widely in the South African market in the 1990s, the market today is dominated by steel-bodied cans.

Hulamin, which already supplies tabs and can-ends to the local market, will ramp up production of aluminium sheet for “full-bodied” aluminium cans to 14 000 tons by 2015, when the deal ends.

This is a significant development for the company as it represents 30% growth in its rolled products line within the local market.

Jacob said there would be potential for further growth, as it was estimated that Bevcan’s requirements amounted to about 35 000 tons a year.

Jacob said aluminium had several advantages over steel.

“Aluminium cans cool much quicker, as aluminium is a better conductor of heat.”

The impact on the recycling market would be massive, he added.

Hulamin is also set to beef up its limited recycling capability by the first half of next year, bringing more investment and jobs, subject to the board’s approval.

“We only have a small recycling operation. We haven’t yet valued the investment … or how many jobs it will create.

“It will be a processing line … to clean, shred, de-coat [the ink and lacquer from] the cans, melting them and casting back into slabs.

“The value of aluminium cans as scrap is immense. It’s up to five times more valuable … and very cheap to recycle,” Jacob said.

He estimated that the growth in demand for aluminium would bring more than R100 million into the economy, enabling people who survive on collecting cans to benefit from a higher price for the cans they sell to scrap metal dealers.

“Typically, a scrap dealer will pay five to ten cents a can,” Jacob said.

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