The document summarizes the South African foundry industry. It provides an overview of the industry structure in South Africa, noting that most foundries are located in Gauteng province and produce ferrous and non-ferrous metals. It also discusses the National Foundry Technology Network (NFTN), an industry association aimed at developing skills training, technology transfer, and innovation to improve the competitiveness of South African foundries. The NFTN focuses on both improving individual foundries and having an impact on the industry as a whole through activities in areas like human capital development, environmental management, and competitive benchmarking.

1. South African Foundry Market
Adrie El Mohamadi
2nd BRICS Foundry Forum
Beijing, China
9 May 2012
Slide 1

2. Presentation Outline
1. South African overview
2. Foundry industry structure in
South Africa
3. NFTN looking ahead
Slide 2

3. South Africa
10%
59 million
1%
Population
6% Province
9% (2011 est.)
Gauteng 11,328,203
11% 8% Kwa-Zulu Natal 10,819,130
Eastern Cape 6,829,958
30% Limpopo 5,554,657
Western Cape 5,287,863
Mpumalanga 3,657,181
14%
North West 3,253,390
11%
Free State 2,759,644
Slide 3
Northern Cape 1,096,731

4. Contribution to the GDP in South Africa
Province Contribution to GPD ‘07
Gauteng 33,5%
Kwa-Zulu Natal 16,2%
Western Cape 14,5%
Geographical location of foundries in South Africa
No. of foundries No. of foundries No. of foundries % of total
Province ‘03 ‘07 ’11 foundries ‘11
Gauteng 110 108 97 54%
Kwa-Zulu Natal 20 26 24 13%
Western Cape 26 16 15 8%
Eastern Cape 16 10 10 6%
Free-State 10 7 6 3%
North-West 10 9 5 3%
Northern Cape 6 3 3 2%
Other
Slide 4 15 15 18 10%

5. Industry structure by foundry type
No. of No. of No. of 2011 v/s
foundries in foundries in foundries in 2007
Foundry Type ‘03 ‘07 ‘11 change in %
Ferrous (Iron and Steel) 110 110 67 -39%
Non-Ferrous (Aluminum, Brass &
Zinc) 117 119 70 -49%
High Pressure Die-casters
Significant decline36 numbers 32
in since 2007 32 0%
•Due to:
Mixed Metal 35 35
•difficult economic conditions 34 -3%
•consolidation, mergers & acquisitions
Investment Casting 7 4 4 0%
Art Foundries 13 12 12 0%
Total number of Foundries 213 211 184 -13%
Slide 5

6. Estimated annual production by metal type
Est. annual Est. annual Est. annual Growth 2011
production ‘03 production ‘07 production ’11 v/s 2007
Metal Type (tons) (tons) (tons) (%)
Non-Ferrous 84,000 97,800 91,400 -7%
Aluminum 66,000 77,800 74,600 -4%
Brass is highly concentrated: 9,000
Industry 8,200 8,400 2%
•Top 3 non-ferrous foundries = 67% of production
Bronze 6,000 7,600 5,700 -25%
•Top 11 ferrous foundries = 62% of production
Zinc 3,000 4,200 2,700 -36%
Ferrous 422,000 562,600 479,950 -15%
Grey Iron 110,000 147,000 170,200 16%
Ductile Iron 100,000 86,000 123,800 44%
Other cast iron 85,000 145,600 61,250 -58%
Steel 123,000 179,100 118,000 -34%
Stainless steel 4,000 4,900 6,700 37%
Total annual production 506,000 660,400 571,350 -13%
Slide 6

7. Markets served by the SA foundry industry
• Export and local markets
Agriculture
5%
Construction • Highly Competitive environment
5% Automotive
33%
• Competing with the rest of the world
General
Engineering
22%
Mining
33%
Slide 7

8. Main casting processes used in foundries
No. of foundries using the
Process Type process (%)
Sand
Bonded sand 44%
Green sand 34%
Shell 14%
Permanent Mould
Gravity 21%
Low Pressure 5%
High Pressure Die-casting 7%
Other 3% Gauteng
Foundry Type No. of foundries No. of foundries (%)
Production 23 24%
Jobbing 50 52%
Slide 8 Prod. & Jobbing 24 25%

9. Employment in the foundry sector
• Estimated no. of direct employees in 2011 – 11,600
- 80% of employees are previously disadvantaged individuals
• Additional 12,400 admin & management staff are employed by foundries
• Estimated no. of indirect employees 4,000
- 180 – 200 supplier companies
15%
Total of 24,400
30%
Melters
Moulders
Patternmakers
Slide 9 55%
Shop-floor analysis

10. Key roles and activities of various stakeholders
in the innovation system
Innovation Capability at Firm Level
Creativity of Employees at all Levels
Innovation-friendly organizational structure
Networked Research and Development
Technology-related Education & Training
Interaction System
Institutions creates an
Applied Research & Development Primary Education
Research & Development Financing effective Technology-related Secondary Education
Technology Transfer & Extension Skills Development for the Workplace
Testing, Measuring, Quality Control & innovation Higher Education, especially in
Standards Certification system Engineering
Intellectual Property Rights Protection`
Political, Legal, Regulatory and Macro-
Economic Framework
that stimulates learning and innovativeness
Slide 10

11. SA foundry innovation system
Innovation Capability at Firm Level
FOUNDRIES
Technology-related Education & Training
Institutions System
Technological
Capabilities
emerges from
interaction
Political, Legal, Regulatory and Macro-
Economic Framework
Slide 11

12. National Foundry Technology Network
NFTN is the culmination of a significant
government and industry association-led
effort to develop a globally competitive South
African Foundry industry through appropriate
skills training, technology transfer and diffusion of
State-of-the-art technologies
Slide 12

13. NFTN Delivery Model
• Activities that targets the improvement of individual
foundries and their immediate environment (firm level)
• Activities that targets an impact on the foundry industry as
a whole (system level)
Slide 13

14. Types of South African Foundries
Type 1 companies Type 2 companies
Medium- to large size Small to medium size
Public companies or Family-owned business
subsidiaries of multinational Reliance on experience / tacit
corporations knowledge and trial-and-error
Technologically sophisticated Relatively outdated equipment
processes
Updated equipment
Slide 14

15. NFTN Areas of foundry support
Key challenges identified by industry NFTN support areas
1.Skills and training (HCD) 1. Human Capital Investment
2.Environmental and waste management
3.Energy management 2.Cleaner production
4. Raw material input
5.Localisation and market development
3.Expansion of foundry industry
6.Capital and investment
7.Technology, Innovation and 4. Science, Technology and Innovation
Competitiveness 5. Competitive Improvement
Slide 15

16. Human Capital Development
Students currently in Germany on a collaborative Masters
programme
Placements of Interns within the foundries
Technical training courses are offered on specialised areas
within the foundry industry
Under graduate degrees are being offered relevant to the
foundry industry by a number of our Higher Education
institutions – with specific mention to UJ – Foundry specific
Second national training centre is being planned and will be
launched in March 2013
3 x curricula has been developed for Foundry
melter, moulder and engineering patternmaker to train
artisans
Skills programmes are being presented to foundry
employees to improve the skills level within foundries
Slide 16

17. Waste activity
• The compilation of a guideline document for use by
Foundries, discussing requirements in terms of the
National Environmental Management Act (Act 107 of
1998) and the National Environmental Management:
Waste Act (Act 59 of 2008)
• The compilation of a motivational document for
adjustment of environmental legislation pertaining to
foundry operations in terms of the National
Environmental Management: Waste Act (Act 59 of 2008)
Slide 17

18. Waste activity
• The compilation of a guideline document for use by
Foundries, discussing requirements in terms of the
National Environmental Management Act (Act 107 of
1998) and the National Environmental Management:
Waste Act (Act 59 of 2008)
• The compilation of a motivational document for
adjustment of environmental legislation pertaining to
foundry operations in terms of the National
Environmental Management: Waste Act (Act 59 of 2008)
Slide 18

19. Competitive Improvement
NFTN Satisfaction
Benchmarking
DST TAP NFTN CII
survey
• First NFTN CII
• Conducted in • Took place • Conducted in
is the Vaal
2009 during 2009/10 2011
Foundry
Initiative
• 103 foundries • 26 Foundries • Overall positive
in total were selected response
• Also targeting
participated
Valve
• Suppliers to • Lessons learnt
Cluster, M&HV
• Opportunity for SOEs incorporated
Cluster, KZN &
foundries to get into the NFTN
Automotive
a comparison • CSIR & Mintek CII
cluster
were the
implementing
partners
Slide 19

20. Demand
focused
Baseline
ID of longer term Assessment Hosting
R&D opportunities Determine market
For non-routine services such as:institutionopportunities and
- Problem solving such as VUT performance
- New product development specifications
Hosting institution - Casting simulation trials
On going required to
is M&E - Productivity improvement
appoint a Identify the
management Foundry performance gaps
committee & use Cluster
Specialised, re
Access and build on the
to interns & Support
cognised
academic institutions
NFTN supplier SAIF skills Initiative Access to
& subsidised
database development mobilisation fund
mandate
Common foundry
problems such as Mobilise specific
Energy, Waste public support
management etc.
Identify the possible
addressed skills development Agree on technical
collectively needs within cluster assistance &
Slide 20 implementation

21. Thank you
Adrie El Mohamadi
National Foundry Technology Network
Tel: +27 12 841 2127
Adrie.elmohamadi@nftn.co.za
www.nftn.co.za
Slide 21