Reliance and Impact on Key Capitals
Governance and Leadership
Statutory approvals and reports
Group financial statements
Company financial statements
Key resources Hulamin relies on
KEY RESOURCES (CAPITALS) IMPACTING HULAMIN1
Net debt to equity ratio: 25% (book value); 57% (market value)
LOCAL ALUMINIUM SMELTERS
Hillside aluminium smelter (source of primary aluminium for Hulamin’s remelt and casting operation).
BAYSIDE CASTING FACILITY
Bayside casthouse (source of one-third of Hulamin’s requirements for rolling slab for the rolling operation).
Remelt and casting
Hulamin’s remelt operations consist of:
Hulamin is a conventional flat rolled aluminium products producer and operates hot, cold and foil rolling mills. Finishing equipment includes coil coating lines, slitting, sheet cut-to-length lines, cleaning and tension levelling and foil finishing facilities. A state-of-the-art plate plant is equipped with a range of equipment including sawing, stretching and plate cut-to-length lines.
Hulamin manufactures the majority of the extrusion dies for its two extrusion plants. Heated billet is placed in an extrusion press which pushes the softened metal through the die to produce the desired profile. Finishing options include powder coating, anodising and fabrication.
SCRAP PROCESSINGHulamin operates an aluminium reclamation operation which consists of a shredding line, de-coater and induction furnace which is used to process light and coated scrap to produce aluminium sows that are fed into the three slab production lines. A R300 million investment in a scrap sorting, processing and recycling facility was approved in 2013. In the third quarter of 2015, the recycling facility came online and is in the process of ramping up to full capacity.
LOCAL ALUMINIUM SMELTER
Reliance of the midstream and downstream aluminium industry on the utilisation by the aluminium smelter of scarce (and carbon intensive) electricity to produce primary aluminium.
Reliance of the remelt, casting, rolling and extruding operations of Hulamin on water, gas and electricity.
ALUMINIUM SCRAPIncreasing availability of customer and consumer aluminium scrap decreases reliance on the smelters, creates prospects of improved economic returns for the midstream and downstream participants in the aluminium value chain, facilitates the development of a strong aluminium collection and recycling industry which, in turn, creates jobs.
|SOCIAL RELATIONSHIP AND INTELLECTUAL CAPITAL|
Government support for the aluminium industry, including government’s stance on:
Relationship with South 32 in respect of the supply of primary aluminium melting ingot from Hillside and the supply of rolling slab from Isizinda Aluminium’s Bayside facility.
Relationship with key non-metal suppliers, including:
CUSTOMERS AND MARKETS
Relationship with customers:
INTELLECTUALExtensive knowledge, technical skills and capabilities in respect of aluminium melting, casting, rolling, finishing and extruding
BUSINESS MODEL IN BRIEF
WHAT WE DO
Hulamin transforms primary aluminium into semi-fabricated products (rolled products and extruded products) which can be used by downstream fabricators in a broad range of industries, thereby unlocking the intrinsic remarkable properties of aluminium for use in a variety of end-use applications.
Hulamin remelts primary aluminium received from South 32’s Hillside smelter, together with process and bought-in scrap, in its remelt and casting facilities to cast around two-thirds of its rolling slab and one-third of its extrusion billet requirements. The aluminium is alloyed with other materials, usually iron, silicon, zinc, copper, manganese and magnesium, to create metals with a wide range of different properties and strength characteristics.
One-third of Hulamin’s rolling slab requirements is bought in from the Isizinda Aluminium Bayside casthouse.
Two-thirds of Hulamin Extrusion’s extrusion billet requirements are imported following the decision by BHP Billiton in 2009 to cease supply of all value-added products apart from rolling slab. Aluminium slab and billet are the feedstock for the rolling and extruding processes respectively.
In the rolling operation, aluminium slab is passed through a number of pairs of rolls to reduce its thickness down to plate material with thicknesses of 6 mm to 250 mm and further down as low as 2 mm for subsequent cold rolling to sheet and coil with thicknesses as low as 0,2 mm. Further rolling can produce the thinnest of foil with a thickness as low as 0,006 mm.
The rolling of cast aluminium changes its metallic structure and the metal takes on new characteristics and properties, with improved strength and ductility.
The extrusion process involves a preheated billet being squeezed through an opening in a die forming the cross-section of the extrusion or profile.
Apart from metal costs, the major operating costs related to the rolling and extruding processes comprise labour, energy, maintenance, coatings and consumables costs. Logistics costs related to the export of rolled products are also a significant cost.
Hulamin Rolled Products is primarily an export business (in excess of 55%), due to the current small size of the local aluminium downstream industry relative to the capacity of the Hulamin plant, which has the necessary scale to be globally competitive. Hulamin Extrusions is a supplier to the domestic market.
In addition to recovering the metal cost component in its products, Hulamin earns a conversion margin as compensation for the costs of rolling, extruding and finishing its various products.