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Integrated Annual Report 2017

Unpacking the Strategy


Our material matters as described are determined through a proactive monitoring approach and are considered by the Hulamin Executive Committee. Material matters highlighted below have had the most material impact on the outcomes of our strategic objectives in the current financial year and have shaped the development of our strategic objectives for 2018. More details regarding our external environment and an analysis of our risks and opportunities are provided here and here.

  • Threat: Rolling margins in key product categories remain under pressure in a competitive global market.
  • Threat: Low local economic growth and constrained local market demand for aluminium semi-fabricated products.
  • Threat: Competition in South Africa from low cost imports.
  • Opportunity: Use of innovative technology to optimise business processes, know-how, customer value and assets.
  • Threat: Stronger Rand environment putting pressure on Hulamin’s operating profit.

Our Enablers

The Hulamin Executive Committee has implemented an effective risk management process (refer page 40 of this report) to mitigate risk and leverage opportunity relative to the key enablers required to deliver our strategic objectives.

Enabler  External influence*  Indicator 
Availability of capital and incentives  South African economic and political environment 
Conversion margins and market demand  Global aluminium semi-fabrication market and regional market development       
Currency, operating environment and input costs  South African economic and political environment 
Price and availability of aluminium scrap inputs  South African economic and political environment 
Availability of primary aluminium  South African primary aluminium industry 

  Opportunity   Threat   * Our external environment is described further here.


THE CORE (Short-term)

In order for the group to remain competitive and sustainable, it must improve operational performance levels to targeted levels based on global benchmarks for similar operations. This will be achieved by:


Benchmark operational performance includes optimising the following operational variables:

Manufacturing excellence:

  • Stabilise operational performance through improved risk management.
  • Improve central coordination and strategic analysis capability to drive key decision-making in the business.

Customer satisfaction:

  • Improve customer on-time delivery by re-engineering the sales and operational planning approach.


The group continues to reduce its input costs in a sustainable manner to remain globally competitive. The group continues to aggressively attack costs and develop cost-focused culture to offset inflation.


  • Develop and execute a process capability and competency framework.
  • Production volume growth.
  • Consistent and improving production, safety, environmental and quality performance.
  • Cost reduction and improvement.


Increased global competition and subsidisation of Chinese products requires Hulamin to focus on higher value product categories and margins.


With the growth in sub-Saharan Africa and the corresponding increase in per capita income, the consumption in the region is set to grow significantly. This will allow the group to focus its product range and will also increase the availability of aluminium scrap in the region.

The group and the established local aluminium supply industry is well placed to support and promote the growth and investment in local downstream fabrication of a wide variety of product applications.

The group will focus on:

  • Growing defendable niche positions.
  • Invest in capabilities and technical partnerships to develop new, higher value products.
  • Re-engineer route-to-market strategies.


The aluminium industry presents the local economy with significant opportunities for economic growth, industrial development, job creation, transformation and energy efficiency. The group and aluminium industry, in turn, require the support of Government to assist to manage the unfair competition through low-priced imports, making appropriate infrastructure available, prescribing local content requirements in infrastructure projects and stimulating the attractiveness of direct investment.


  • Overall USD/ton conversion margin.
  • Percentage high-value sales mix.
  • Percentage metal inputs from recycled scrap.

TOMORROW (Long-term)

With increasing global competition in aluminium rolled products, for Hulamin to achieve a step change in margin realisation in the future, a significant shift is required in our sales mix to move further up on our value curve. In order to achieve a shift in the value curve Hulamin’s long-term vision includes:

  • Investment in new assets and capabilities that will allow the uplifting of product categories;
  • Re-configuring the asset base away from low margin products; and
  • Supporting the development of upstream business in Richards Bay to enable the local beneficiation of primary aluminium into a range of value added products.


  • Growth in local beneficiation of liquid primary aluminium.
  • Number of new high value products launched.
  • Percentage high value products in sales mix.