Adrie El Mohamadi, head of the industry-led and government-funded National Foundry Technology Network (NFTN) project, said that as every foundry faces these challenges, the local and international foundry industries need to work together to meet the challenges that affect the industry.
The CEO of the South African Foundry Institute (SAIF), John Davies, agreed and pointed out that the challenges facing the industry involve compliance with environmental regulations. The foundry industry lacks manual skills and in some cases management skills.
In recent years, low absorption of new technologies and high input costs (such as rising energy prices) have been and continue to be the challenge affecting all foundries.
He pointed out that the South African National Energy Regulatory Agency recently granted an 8% increase in electricity prices to the state-owned power company Eskom, which does not bode well for the industry. Even if Eskom does not get a 16% increase, the growth will still have a significant impact on the industry.
El Mohamadi said that at the third BRIC Casting Forum held in Northwest South Africa in March, comparisons among the BRIC countries Brazil, Russia, India, China, and South Africa showed that South Africa has the highest energy costs.
This research was commissioned by the NFTN, which co-hosted the BRICS Foundry Forum with Saif to make important comparisons among various countries, with a focus on cast iron foundries. The results of this study also show that in all the BRIC countries, the export mode is similar, and most products are sold in the domestic market. Also, in South Africa, where the foundry industry is dominant, the automotive industry's dominant position as a consumer of the foundry industry is not so obvious.
In addition, in terms of the percentage of production costs, South Africa’s labor cost is 33.5%, the highest among the BRIC countries, followed by Brazil at 32%. Labor costs in other countries range from 8% to 20%.
Despite the challenges, El Mohamadi and Davies believe that the South African foundry industry has many local growth opportunities. Davis said that the state-owned enterprise procurement plan is the biggest driving force and an important buyer of castings, adding that the government has assured the industry that this is not a one-off plan. Davis added that due to the trade deficit, the fall in the rand exchange rate also provided greater opportunities for exports. Due to the current economic situation, the traditional export markets in North America and Europe are currently in a downturn, and exports to new regions such as South America and Africa provide growth opportunities for South African foundries.
In recent years, the growth rate in Africa has exceeded 5%. El Mohamadi said South African foundries have a competitive advantage because the country has abundant mines. She believes that South Africa is not taking advantage of this field, nor has it provided enough opportunities.
Jiahe County was established in 1639, covering an area of 699 square kilometers, governing 9 towns and 1 township, with a population of 420,000. It is one of the counties with the smallest area and the highest population density in the province.
