LETTER FROM THE CHAIRMAN
DESPITE THE CHALLENGES FACED BY HULAMIN, THE IMPROVED FINANCIAL PERFORMANCE IN 2012 DEMONSTRATES THAT IT HAS ESTABLISHED A PLATFORM TO FURTHER EXPLOIT THE INCREASED CAPACITY THAT WAS PROVIDED BY RECENT INVESTMENTS.
Mafika Mkwanazi, Chairman
International events such as the EU sovereign debt crisis and the US fiscal cliff uncertainty have perpetuated the world economy’s struggle to enter a new growth phase after the financial crisis of 2008. Hulamin, like other manufacturers exposed to international markets, has been affected by this uncertainty and the impact it has had on restricting investment in hard assets. Despite these challenges in 2012, we are pleased with the improved financial performance and look forward to an improvement in our fortunes.
The directors of Hulamin are fully committed to the principles of sound corporate governance, in particular engaging with stakeholders and conducting our affairs with integrity, transparency, fairness and accountability. Corporate governance matters are covered in depth on this report.
Hulamin recognises that sustainable growth depends on building and maintaining strong and mutually beneficial relationships with its many diverse stakeholders, and will be responsive to their needs and expectations. In 2012, Hulamin continued to strengthen relations with all relevant stakeholders. Stakeholder engagements are covered in more detail here.
Performance and delivery
Hulamin started 2012 maintaining its 2011 volume growth momentum. In the first four months performance was ahead of 2011, but progress was curtailed by the failure of a component of the main drive motor of the Camps Drift hot finishing mill, causing a 46-day disruption to production. Despite this setback, an improved second half performance bodes well for 2013. The board and I are reassured that management continues to focus on its manufacturing excellence programme and is well equipped to face the uncertainties and challenges of 2013. The business has invested considerable resources in this programme and the board will continue to monitor the progress of the operational performance improvement process.
Hulamin remains committed to its stakeholders, recognising the interconnectedness of the organisation and its environment. Therefore, maintaining and strengthening good relations with stakeholders, who include government, the communities we operate in, capital providers and employees, remains a top priority. We continue to make good progress in improving our carbon footprint, and have achieved a range of sustainable reductions in the company’s carbon impact. Sustainability is covered extensively here on this report.
Availability of rolling slab and extrusion billet
The long-term security of local supply of rolling slab from BHP Billiton remains uncertain with the current slab supply agreement expiring at the end on
June 2013. Hulamin has continued to engage with BHP Billiton and other stakeholders with the goal of finding a solution that meets the needs of all parties.
In August 2012, Gerrit Pretorius resigned from the board of Hulamin due to other business commitments. The board and I express our appreciation for the valuable contribution he made to the company during the short time he was on the board. We wish him all the best for the future.
On 28 February 2013, Charles Hughes retired as Chief Financial Officer and was replaced by David Austin. Charles will remain with company to the end
of May 2013 to ensure an orderly transition and the board and I would like to express our appreciation for his contribution to the company and welcome
David to the board. David has a wealth of experience in senior financial positions and we are confident he will make a significant contribution to the company and the board.
Hulamin’s improved financial performance in 2012 demonstrates that it has established a platform to further exploit the increased capacity that was provided by recent investments. I would like to thank the board, management and employees for their commitment to improving Hulamin’s performance and look forward to a continued improvement in performance.