OVERVIEW Manufacturing
OVERVIEW Manufacturing Mpumalanga’s natural resources support a diverse manufacturing sector. Columbus Stainless’ factory. Image: Columbus Stainless F rom steel to chemicals, petroleum and stainless steel to paper and fruit juice, Mpumalanga makes a wide variety of products. There is a distinct geographical divide. Fuel, petroleum and chemical production occurs in the southern Highveld region clustered around Sasol’s plants. The Sasol chemicals and liquid fluids complex at Secunda is a vital component of Mpumalanga’s manufacturing sector. The company has two propylene manufacturing plants and recently completed two major investments aimed at improving flows and expanding production. Propylene is an input for polypropylene which is used in packaging, automotive components and textiles. The market is growing in South Africa at 4% per annum, roughly the same rate as the global market. The northern Highveld area, including Middleburg and eMalahleni (Witbank), is home to ferro alloy, steel and stainless-steel concerns. In the Lowveld, agricultural and forestry products are processed while Sappi’s giant mill is close to the company’s forests south-west of the provincial capital, Mbombela. Standerton has textile-manufacturing capacity in the form of Standerton Mills. It is also home to several plants that use local raw materials: Nestlé has an infant-cereal manufacturing plant, RCL runs farms in the Carolina district and Early Bird is prominent. McCain and Sector Insight Food and forestry provide the most jobs in the manufacturing sector. PepsiCo (Simba) have plants that use the province’s plentiful potato crop. TSB Sugar runs two large mills and produces fruit juices through a subsidiary company. Nelspruit is the centre of the province’s food-processing cluster. Approximately 70% of jobs in the manufacturing sector are in food and forestry. A Social Enterprise Development Programme has been designed by the Provincial Government of Mpumalanga MPUMALANGA BUSINESS 2020/21 28
OVERVIEW to assist township and rural manufacturing businesses in the steel fabrication sector. This will include manufacturers of finished products such as door frames, window frames and concrete products like paving bricks, building bricks and blocks. A key objective of the provincial government’s Mpumalanga Economic Growth and Development Path (MEGDP) is to expand the industrial base of the provincial economy. To do this, policy-makers are focusing on beneficiation, agri-processing and value chain development. A large agri-processing fruit hub is planned for the province. Located in the Nkomazi Special Economic Zone, the proposed hub, with an estimated value of R10-billion, would deal with the whole value chain from growing fruit through to processing, marketing and logistics. Having manufacturing facilities at the core of the hub will enable a variety of businesses to be established, both upstream (to supply the plant) and downstream (to deal with the products of the plant). Steel Middelburg-based Columbus Stainless is a major supplier of stainless-steel products to the domestic and international market. About 25% of the company’s production is sold domestically. The South African steel industry has endured tough times. According to the South African Iron and Steel Institute (SAISI), the sector has shown virtually no growth since 2013. The country produces about six-million tons annually, but costs are high and domestic demand is low. The industry has important strategic value and has about 190 000 employees. Creative thinking kicked in when Highveld Steel’s troubles reached a tipping point in 2015. Aside from the business rescue process, the 1 000ha property has been repurposed as a multi-purpose site for industry and commerce. Called the Highveld Industrial Park, the project promotes a wide range of manufacturing enterprises. Stockpiles of coal and vanadium are being sold off, but two iron plants and a steel plant offer fully-equipped metallurgical and steelmaking facilities, supported by environmental monitoring services and metallurgical and chemical laboratories. The structural mill of Evraz Highveld Steel in Witbank was officially relaunched in June 2017 after ArcelorMittal South Africa signed a contract to supply blooms and slabs for the mill to make into heavy structural steel. The two-year contract had an option to renew but ArcelorMittal took the alternative option in July 2019 when it announced its intention to buy the mill. Samancor Chrome (which runs Ferrometals) is the second-largest ferrochrome producer in the world with three plants, two of which are in Mpumalanga: eMalahleni (Witbank) and Middelburg. Metals and machinery The presence of Ferrometals (a Samancor company) in eMalahleni means that Mpumalanga is an important place for metals and machinery manufacturing. It produces charge chrome and is one of the largest ferrochome plants in the world. Joint ventures such as Crometals, Poschrome and Elkem Ferroveld operate from the site. In the course of an upgrade, FLSmidth has also doubled the size of its Delmas Supercentre to 10 500m². The company makes equipment for materials handling and mineral processing. The centre also hosts a training facility and handles repairs for customers. In Middelburg, Thos Begbie makes a variety of products at its heavy engineering works. Graphite Freezeline Solutions opened a new graphite facility within the Begbie property in 2018. Thos Begbie has announced an expansion into Zambia, where it will service and repair furnace components. The Manganese Metal Company in Nelspruit is the largest producer of pure electrolytic manganese metal in the world. Delta EMD, in the same town, is one of the biggest producers of electrolytic manganese dioxide, a material used in the manufacture of alkaline batteries. ■ Online Resources Highveld Industrial Park: www.highveldindustrialpark.co.za Mpumalanga Economic Growth Agency: www.mega.gov.za South African Iron and Steel Institute: www.saisi.co.za 29 MPUMALANGA BUSINESS 2020/21
