Beneficiation in SA: Perspective of German-South African Industry. Andreas Künne Minister: Economic & Global Issues German Embassy Pretoria

Transcription

1 Beneficiation in SA: Perspective of German-South African Industry Andreas Künne Minister: Economic & Global Issues German Embassy Pretoria

2 Where are we today? Catalytic Converters Automotive Production Tire production Chrome Chemicals Structure Policy Options Smart interventions / dialogue & flexibility Auswärtiges Amt 2

3 Automotive: Catalytic Converters Globally: Ccs consume >50% of PGM production Particle filters (Diesel) use similar technology: High growth potential Foundation for fuel cell manufacturing Auswärtiges Amt 3

4 Catalytic Converters / SA Locally: > 10 converter producers Cc industry beneficiates 15% of SA PGMs Cc > 90% of PGM beneficiation in SA Takes 40% of SA domestic steel production direct jobs (mainly highly skilled) Export revenue > R 20bn p.a. Auswärtiges Amt 4

5 Catalytic Converters: Issues Receding market share (2008: >14% of global, today: <10% and falling) Time to market too long (26 weeks) Capacity 24 mio pieces, production: 16 mio Why: Lack of skilled labour Weak demand: Over-reliance on Europe, growth markets protected Auswärtiges Amt 5

6 Catalytic Converters: Interventions Comprehensive approach: Support entry into new market segments Support research into fuel cell production, together with industry Support expansion of value chain in industry-wide dialogue (> 50 companies in supply chain) Trade agreements: Global market access Industry ready to discuss: Catalytic Converter Interest Group - international manufacturers present in SA Auswärtiges Amt 6

7 Automotive Production: Localization Car manufacturers want to source as much as possible locally (transport, tarriff advantages) Example BMW: Seat belts, assembly of exhaust panels, fuel tank, floor carpets etc. Crucial: Business case AND availability of technology Auswärtiges Amt 7

8 Automotive Production: The MBSA Perspective Production & sales volumes Europe Technology & Skills NAFTA China Raw materials Productivity & Labor cost South Africa Auswärtiges Amt 8

9 MB production share for local market 20% Annual Passenger car production overall 0,3 Mio cars South Africa Germany MB production share for local market 60% Annual Passenger car production overall 6 Mio cars Annual Passenger car sales overall 0,4 Mio cars Annual Passenger car sales overall 3 Mio cars China USA MB production share for local market 100% Annual Passenger car production overall 15 Mio cars MB production share for local market 100% Annual Passenger car production overall 3 Mio cars Annual Passenger car sales overall Annual Passenger car sales overall 18 Mio cars 8 Mio cars Auswärtiges Amt 9

10 South Africa IHU (inner high pressure forming) Aluminium/Magnesium High pressure casting Carbon Fiber Technology Blow moulding with insert parts Germany IHU (inner high pressure forming) Aluminium/Magnesium High pressure casting Carbon Fiber Technology Blow moulding with insert parts China USA IHU (inner high pressure forming) Aluminium/Magnesium High pressure casting Carbon Fiber Technology Blow moulding with insert parts IHU (inner high pressure forming) Aluminium/Magnesium High pressure casting Carbon Fiber Technology Blow moulding with insert parts

11 South Africa Aluminium casting alloy Aluminium sheet material Plastic materials (ABS,EPDM) High strength steels Germany Aluminium casting alloy Aluminium sheet material Plastic materials (ABS,EPDM) High strength steels China USA Aluminium casting alloy Aluminium sheet material Plastic materials (ABS,EPDM) High strength steels Aluminium casting alloy Aluminium sheet material Plastic materials (ABS,EPDM) High strength steels Auswärtiges Amt 11

12 Automotive: MBSA Perspective / Raw Materials In order to fulfill future requirements on CO 2 emissions, the weight of new generation cars has to be reduced. The availability of the right raw materials with competitive pricing is therefore essential for the automotive production. Weight reduction [% compared to steel] Aluminiumstructure Aluminium-body panels Steel-Body in White Carbon fiberstructure Magnesium-sheet Magnesium-casting kg/car Steel Aluminium Production cost [ /-kg] Auswärtiges Amt 12

13 Automotive: MBSA Perspective / Productivity & labor cost Labor cost development ZAR/hour Skill Level 3 Qualified rate Productivity comparison ZAR/Costs of1 Production Hour for Car Trim Sewing (2012) * * 48 9,0% 52 +9% 57-36% (-20) -42% (-24) % +54% * 2010 * 2011 * South Africa 2012 * 2012 China 2012 Moldavia Germany China Mexico Slovenia Czech Moldavia South Africa 2012 South Africa 2007 *Source: NBF (National Bargain Forum) agreed wage * * Includes labor, machining and overheads Auswärtiges Amt 13

14 Automotive Production: New approaches STEEL: MBSA in discussions with ArcelorMittal Prepared to manufacture material for unexposed sheets These are the lesser volumes (combined, 1255 ton/a) - too small for ArcelorMittal to produce MBSA now investigating the possibility of combining volumes with other OEMs ALUMINIUM: MBSA and AFSA (Aluminium Federation of South Africa) had first meeting on specifications for sheet metal Next step to formulate combined OEM data sheet, initiate project, establish task team within OEM Council Auswärtiges Amt 14

15 Automotive Production: Conclusion Production & sales volumes Regions with high production and sales volumes have priority with regard to investments. With low sales volumes in the domestic market, the South African car production relies on exports. Technology & skills New production technologies are available outside South Africa first. Local production volumes are too low for certain production technologies to be viable. Skills development needed to allow widely spread operation of high-tech production technologies. Raw materials Lightweighting in car production is indispensable. The necessary raw materials must be available at competitive pricing. Not all raw materials are locally available, with monopoly pricing being the crucial handicap for most available raw materials in South Africa. Productivity & Labour cost The cost for labour in South Africa has increased faster than productivity. This leads to a disadvantage in competition with other regions. Auswärtiges Amt 15

16 Tire Production: Continental One of four tire manufacturers in SA Located in PE region Strongly committed to sourcing locally Auswärtiges Amt 16

17 Tire Production: Continental Global vs Local Auswärtiges Amt 17

18 Tire Production: Material Type / Quantity Auswärtiges Amt 18

19 Tire production: Localization Availability of technology Economies of scale? Biggest potential: Reclaimed rubber / yarns & fabrics Framework needs to be in place: Recuperation system built up in consultation with industry Auswärtiges Amt 19

20 Chrome Chemicals: From Chrome Ore To Cars (and aeroplanes) LANXESS example: German high-tech company with strong BRICS focus ~1.400 employees in SA Chrome ore mine close to Rustenburg Several production facilities in SA (KZN) Mine -> world s most modern chrome chemical plant in Newcastle, KZN Chrome ore -> specialized chrome chemicals for automotive, aviation and other industries Auswärtiges Amt 20

21 Chrome Chemicals: From Chrome Ore To Cars (and aeroplanes) Complete value chain in SA Beneficiation from A to Z Without government support programmes Identified the right niche Auswärtiges Amt 21

22 Policy Options Skills: Comprehensive support to industry Technology: Support for industry-oriented research in dialogue w/industry, e.g. magnesium Productivity: Incentive schemes Identify & support niches (reclaimed rubber, PGM applications beyond catalytic converters,...) Raw materials: Monopoly pricing Trade agreements: Level playing field Auswärtiges Amt 22

23 Policy Options: Support Clusters Secrets of German success in manufacturing: vocational training & clusters In confined geographic area maximum of expertise Industry, colleges, universities, government, labour force SA examples: Renewables in the Western Cape -> CSP research chair, CPUT training of wind turbine engineers, govt support Auswärtiges Amt 23

24 Thank you! Questions? Questions? Auswärtiges Amt 24