Modern Mining May 2015

COMPANIES

Scaw Metals holds its own in a

A company that is taking the current challenging business environment in South Africa in its stride is integrated steel maker ScawMetals. Although Scaw derives much of its turnover from the subdued mining sector and is also – being an energy-intensive business – impacted by Eskom’s generating constraints, it is nevertheless performing strongly and is upbeat about future prospects. This was the message to emerge when Modern Mining recently spoke to CEO Markus Hannemann and Steve van Wyk, Executive Head of Operations.

H eadquartered in Germiston, Scaw Metals – which has around 6 500 employees – produces steel products for a range of industries, includ- ing mining, construction, the rail and power sectors, and the offshore oil and gas in- dustry. In the mining field it is partic- ularly well-known for its forged and high-chromium casting grinding me- dia and for the steel wire ropes used in shaft systems and many other min- ing applications. It also manufactures wear parts for cone, gyratory and jaw crushers and mining equipment such as draglines, as well as mill liners, rock anchors and ground engaging tools. Scrap metal provides 85 % of the feedstock it uses in its manu- facturing operations and its annual steel production is in the region of 750 000 tonnes. Scaw’s origins date back to the 1920s when it was founded as a manufacturer of steel ceilings and aluminium castings under the name Steel Ceilings Aluminium Works (SCAW). It soon evolved into a mining industry supplier by producing cast steel grind- ing balls for use in mills. In 1942 it moved to its Union Junction premises in Germiston – which remains its main operational base to this day – and in 1949 commissioned a foundry at the site, which now ranks as one of the largest in the southern hemisphere. Major corporate developments over the years have included the acquisition of the group by Anglo American in 1964 and the absorption of steel rope manufacturer Haggie Ltd in 1998 (a process which started when Anglo American acquired an initial 36 % stake in Haggie in 1980). In 2009 Anglo American announced its intention to dispose of Scaw as part of its strat- egy of divesting itself of non-core assets. Scaw

I n t e r n a t i o n a l (essentially the Moly-Cop and AltaSteel oper- a t i ons ) wa s sold off first

i n 2011 t o OneSteel of Australia in a transaction worth US$1 billion while the balance of the group (all the operations in Africa plus certain overseas assets) followed in 2012, when the IDC purchased 74 % of Scaw for R3,4 billion.

Markus Hannemann

Markus Hannemann was appointed as CEO in August the follow- ing year. A qualified Mechanical Engineer with an MBA in strategy and transformation man- agement, he has been with Scaw for his entire career and, prior to assuming the CEO role, was the Head of Manufacturing Operations. He works closely with Executive Chairman Ufikile Khumalo in providing strategic leadership to the entire Scaw Metals Group. He has clearly taken over at a difficult time as he himself acknowledges. “Obviously, times are tight and the market is ultra-competitive,” he says. “Currently, we’re in a stabilisation phase – we’re taking a long hard look at our- selves and asking the question, ‘what do we need to do to improve our position in the mar- ket?’ So there’s a great deal of effort going in to investing in our capabilities and technology. We have, for example, a big capex programme underway. Since 2007 we’ve invested around a billion rand in South Africa and we would like to invest a further R4 billion over the next

Steve van Wyk

38  MODERN MINING  May 2015