South African foundries pay significantly more for electricity and certain raw materials than Brazil, Russia, India and China, delegates at the third BRICS Foundry Forum in North West heard yesterday. In addition, South Africa’s labour cost in relation to productivity is cause for concern amongst foundries in BRICS countries.
A study was commissioned by the National Foundry Technology Network (NFTN) to make meaningful comparisons between the various countries, zooming in on the iron casting foundries.
The results of this study indicate similar export patterns across all the BRICS countries, with most products destined for domestic markets. The dominance of the automotive industry as a sector supplied by the foundry industry is not as pronounced in South Africa, where mining dominates.
When viewed as a percentage of production costs, labour costs in South Africa are the highest amongst BRICS countries (33.5%) followed closely by Brazil (32%). The other countries reported labour costs ranging between 8% and 20%.
The BRICS Foundry Forum was jointly hosted by the NFTN and SAIF. The National Foundry Technology Network (NFTN) is an initiative of the dti and works closely with the South African Institute of Foundrymen (SAIF).
Adrie El-Mohamadi, Project Leader of the NFTN, says that the study was commissioned to provide a snapshot of the iron foundry industry per country. “Although the study looked at public sector support and incentives amongst BRICS countries, the issue is a complex one with many layers which needs further interrogation,” she says.
The study was conducted by Real Consulting, researchers in resource economics. Dominic Mitchell, who presented the results to 55 delegates at the BRICS Foundry Forum yesterday, warned that industries tend to buy into rumours about the incentives and support offered by other countries. “We need to explode these myths by taking a closer look at this issue,” he said.
Later in the day. an industry think tank session was held to discuss how the global metal casting market is changing and how BRICS countries can play a role in shaping global foundry markets. “We share a number of issues across developing countries such as energy and conversion. These were discussed at length and the level of engagement amongst delegates was incredible,” said El-Mohamadi.
The BRICS Foundry Forum is being followed by the Metal Casting Conference, a two-day forum with the aim to share the latest international and national technological developments driving competitive advantage in the foundry industry.
This is a statement Prepared and distributed on behalf of the BRICS Foundry Forum by Corporate Communication.
As a member of the World Foundry Organisation, NFTN joined the BRICS Foundry Forum in collaboration with SAIF.
The NFTN is a national dti initiative that facilitates the development of a globally-competitive South African foundry industry through appropriate skills training, technology transfer and diffusion of state-of-the-art technologies. www.nftn.co.za
The SAIF is a non-profit organisation that has been active within South Africa, initially as a branch of the Institute of British Foundrymen since 1939, then as an independent institute since 1964. www.foundries.org.za