Project Presenta,on on Collabora,on for change

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Justin Wilson
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1 Project Presenta,on on Collabora,on for change CSIR mee,ng with the Department of Trade and Industry Ashley Bhugwandin

3 Vision & Mission Vision To increase the global competitiveness of the South African foundry industry through the provision of appropriate services in order to reduce import leakage, increase local production, and increase investment in the sector. Mission The NFTN will provide program management, coordination, and facilitation to support and enable the revitalisation of foundries in the metal casting industry through appropriate skills training, technology transfer, and diffusion of state of the art technologies. 3

4 Desired Outcome A transformed and competent casting manufacturing industry sub-segment in SOUTH AFRICA, consisting of globally competitive and sustainable businesses. Objectives Foundry capacity building Technical and Regulatory support to industry Human Capital Development, Skills, and Knowledge Transfer Stakeholder relations, awareness raining, and Communications

5 Foundry Industry Profile Concern: Identified as a key manufacturing industry sub-segment for revitalisation Challenges: Industry is in decline 25 foundries have closed since jobs lost since 2010, 635 of which were in 2015/2016 Lack the volumes to achieve manufacturing economies of scale Aged infrastructure for capital equipment parts High levels of capital investment needed Low capacity utilisation at many foundries Local buyers are offering ad-hoc low volume orders Limited collaboration in the industry to develop the collective capacity and capability 6

High use of scrap metals as a primary material input (the industry is a secondary economy); Segmentation by: Economic sector focus

6 Foundry Industry Profile Total companies: 170 Total Jobs (direct): Characterised by: 74% of the companies have been in existence for more than 20 years The majority of companies are privately owned small businesses, employing less than 50 employees High use of scrap metals as a primary material input (the industry is a secondary economy); Segmentation by: Economic sector focus Processes used Material Capacity to manufacture in designated sectors Company categorisation ranges from small to export ready Sectors 7

7 12

8 COMBINED COST STRUCTURE % DAYS PER ANNUM THAT FOUNDRIES OPERATE 24

9 Enterprises at different stages in development cycle require different types of technology transfer and support. Small Capable Accredited Export Focused Key Development Intervention (1) Support to establish basic business systems that will enable the business to scale up. Ensure all legal compliance policies and systems are in place. Quality management training to enhance production. Finance to upgrade plant (when this is required). Marketing support to expand customer base. Key Development Intervention (2) Detailed plant visits by experts to support companies to improve productivity and quality through: Re-engineering production processes (and possibly plant layout). Implementation of lean production and quality control systems. Continuous upskilling of work-force. Key Development Intervention (3) Building of world class in-house engineering capability. Comprehensive supply chain audit to identify where suppliers can improve and implementation of improvement initiatives. Additional expert driven productivity interventions. Special financial support and incentives required. Work in Progress Not for Quotation. 9 9

10 Foundry Needs Surveys

11 Interventions Off-take Commitments Concern: Foundries are closing due to lack of business opportunities Intervention(s): Evaluation of foundries to assess where they are in the development cycle. 65 foundry assessments done to identify gaps to international best practice benchmarks. Industry survey between BRICS countries conducted on foundries producing iron products. Industry survey with India (similar challenges) conducted to understand variances to SA. Collaborative partnerships created with key stakeholders to address identified challenges and constraints. Access to international specialists provided as needed, membership to and participation in the activities of the World Foundry Organisation and BRICS Union enabled for industry. Future activities: Conduct additional benchmarks in steel and non-ferrous industry sub-segments. Create collaborative partnership to unlock value chain opportunities for localisation of castings Create collaborative partnerships to unlock identified opportunities in individual foundries, on a case by case basis. Facilitate industry forums to address specific technical needs. Stakeholder Map 13

12 Benchmark - Training of Foundry Management and Trades Moulder Senior Management Middle Management Fettler 15

13 Interventions Human Capital Development Concern: Foundries do not have the required skills to grow and capitalise on the opportunities Challenges: South African foundry skills lag other BRICS countries and the world Optimum training model for key skills Skills upliftment programs: Artisans: melter, moulders, pattern makers Foundry skills: workers Professional skills: technicians and engineers Regional training centres: Gauteng KZN 14

programme Focused on melter, moulder, and pattern maker Training Centre established at Ekurhuleni East College (Kwa

14 Interventions Human Capital Development Concern: Artisan skills Challenges: Insufficient qualified artisans for current needs Training capacity expansion required for key regions Not yet part of the DHED funding structure Artisan Training programme Focused on melter, moulder, and pattern maker Training Centre established at Ekurhuleni East College (Kwa Thema) Feasibility study done for training centre in KZN Future Activities Open additional training facilities if feasible 16

15 Interventions Human Capital Development Concern: Foundry skills Challenges: South African foundries rely heavily on the skills trained on the job Skills Development Training Programme Consists of certificate training modules towards a diploma course (NQF 2-4 level), On site on demand customised courses, and seminars and workshops. Future Activities Accreditation of the courseware by the MerSETA Updated survey of the industry training needs 18

Interventions Human Capital Development Concern: Professional skills Challenges: Young leaders and future managers need to gain a rounded experience to prepare them for promotion South African

16 Interventions Human Capital Development Concern: Professional skills Challenges: Young leaders and future managers need to gain a rounded experience to prepare them for promotion South African foundry skills lag foundries in other BRICS countries in middle and senior management New Foundry Generation Forum programme Network for young professional under the age of 45 Platform for networking and learning Current programme has curriculum for Y1 only, including: 1 module presented on root cause analysis and problem solving 3 modules presented on front-end technologies and functional design Interactive feedback sessions with industry to showcase learnings and associated projects 14 participants completed year 1 in participants enrolled to year 1 in 2015 Future Activities Y2 curriculum to be added in 2016 to focus on leadership and management skills. 19

17 Interventions Competitiveness Improvement Concern: Foundries are finding it difficult to compete for new business Challenges: Global competition has a direct impact on castings sourced in South Africa Traditional markets are changing The cost of R&D, and tooling Intervention(s): Direct and indirect assistance to foundries (CIP: 52) Support packages include assistance to address: Future Activities: Accreditation and compliance Productivity improvement and efficiency Cleaner Production and Occupations Health and Safety Localisation and special projects Continued assistance to 20 foundries enrolled to the Competitiveness Improvement Program (CIP) annually Provide assistance to 20 new foundries enrolled to the CIP annually 20

18 Interventions Competitiveness Improvement Concern: Foundries are categorised as small or capable by buyers and are not being considered for new business Challenges: Original Equipment Manufacturers (OEM s) have basic requirements to qualify supplier capacity including compliance and certification to market norms 39% of all foundries are accredited to an accepted quality standard Intervention - Certification and Accreditation ISO 9001: Requirement to access capital equipment market locally and internationally TS16949: Requirement to access automotive sector locally and internationally PED Directive: Requirement to access high pressure capital equipment market locally IRIS: Requirement to access certain rolling stock markets internationally Future Activities Facilitate assistance for foundries to achieve relevant accreditations 21

19 Interventions Competitiveness Improvement Concern: Low levels of productivity and efficiency competition on price Challenges: Many of the foundries provide a process and continue to struggle to compete on price with low cost imports Foundries typically specialise in a number of core process and are often reliant on a collective of other manufacturers in the supply chain to produce final products Jobbing foundries manufacture a diverse and complex range of products Intervention - Process Innovation Engineered solutions to improve the process flows and the availability of materials Addition of alternate processes into the foundry operations (ie: machining) Optimisation of product mix and associated foundry processes Introduction of new degassing tool (aluminium) Sand reclamation and sand management practices Provision of developmental resources Future Activities Continued facilitation of access to engineered process innovation solutions 23

20 Interventions Competitiveness Improvement Concern: Foundry compliance to environmental legislation Challenges: The cost of compliance up to R5 million (large hurdle for small foundries) The risk associated with non-compliance include potential foundry closure Availability of grants / low-cost loans Intervention - Environment, and Waste Management Testing and analysis to profile the different types of sand used by foundries in manufacturing Engaging with DEA, GDARD and local municipalities Facilitating discussion with industry Intervening to implement corrective actions at individual foundries on an as required basis Future Activities Industry conferences and workshops Develop a profile for foundry waste sand in South Africa Assessing the quality of air emissions and its impact on the surroundings 26

21 Interventions Technology and Innovation Concern: South African manufacturing use multiple technologies often lagging behind overseas competitors Challenges: Limited R&D: Foundries have limited access and understanding of new technologies OEM s contracted to provide products into the local market are not able to advise the foundries on the technologies and skills required specific to their products Intervention(s): Focus on specific technology localisation through science councils and universities and strategic international partnerships (ie: EffSAfound Project) Use of front end engineering (ie: simulation) and advanced engineering methods Host to the 2017 WFO Technical Forum Future Activities: Conduct feasibility of cooperatives centres of innovation for skilled entrepreneurs Work with universities to localise technology, science council to develop the processes, and foundries to industrialise products. 28

22 Back 35

23 Support / Collaboration Partners Public Sector and Government: DST, DSBD, EDD, DHET, NT, MerSETA Academia: Universities: (ie: CPUT; UJ; UP; VUT; Wits) Parastatals and Implementation units Council for Scientific and Industrial Research (CSIR) Council for Mineral Research (Mintek) National Cleaner Production Centre Technology Localisation Implementation Unit Technology Stations: (ie: MCTS; VUT; CUT; TUT) SOC s Eskom Transnet Private Sector: Original Equipment Manufacturers Industry clusters Companies seeking assistance to develop new enterprises in their supply chain Industry: Associations Individual foundries Subject Matter Specialists International: AFS GIZ IfG WFO Back 36

24 Thank You

Case Studies Material Reduction Challenges faced: High percentages

Intervention(s): Product development from solid to hollow bar

sector Outcomes (ROI) Material Savings (-37%) Machine times (-33%)

25 Case Studies Material Reduction Challenges faced: High percentages of excess materials to be scraped Quality of the tooling Intervention(s): Product development from solid to hollow bar castings for production of specialised products in the automotive sector Outcomes (ROI) Material Savings (-37%) Machine times (-33%) Consumables (-40%) Opportunities Revised pricing Increased order book (now 100%) 32

26 Case Studies Resource support Challenges: Foundry too small and layout not compatible with volume production Resources to develop new products Recognition in formal supply chains Intervention(s): Product Development of prototype castings for designated railway products for new locomotives Process re-design Outcomes (ROI) Foundry successfully relocated to new facility TE technical approval of products and contract award worth R10 million. Opportunities The foundry is now able to tender for larger contracts (current tender of R72 million) 33

27 Foundry Needs Human Capital Development; Environmental and Waste Management; Energy Management; Cost and availability of Input Scrap; the lack of recent Capital Investment; challenges associated with Localisation and Market Development; Technology, Innovation and Competitiveness.

South African Institute of. Foundrymen. 6 th BRICS FOUNDRY FORUM. The Foundry Industry in South Africa. 16 th May 2016 John Davies SAIF CEO.

South African Institute of. Foundrymen. 6 th BRICS FOUNDRY FORUM. The Foundry Industry in South Africa. 16 th May 2016 John Davies SAIF CEO. South African Institute of 6 th BRICS FOUNDRY FORUM Foundrymen The Foundry Industry in South Africa 16 th May 2016 John Davies SAIF CEO Slide 1 PRESENTATION OUTLINE 1. Introduction to SAIF 2. Status of