New owners positive about getting the company back to where it once was.
Taking over a foundry that has not been melting or manufacturing castings for a lengthy period, relatively speaking, is not an easy task. Well, this is the story of Infigo Foundry. I am sure that many members of the foundry industry are curious to know what exactly happened with Concorde Foundry Vereeniging, so this article will start by giving some answers to those questions. The 2013 demise of Concorde Foundry Vereeniging was not expected when 50% of its shareholding was acquired by the construction, engineering, logistics and manufacturing Global Engineering Group as the group has strong links to the railway engineering and transport industry, both locally and internationally. Strategically it was a positive move by the company, because it was at a time when the South African Government had been making a lot of noise about spend in infrastructure improvements, with billions destined for rail transport and locomotives.
The melting platform inside Infigo Foundry
However, many of the localisation promises have not materialised and more and more of these contracts have been awarded to companies in China. This has had a major impact on local manufacturing companies who invested heavily with the prospect of participating in these contracts. Even indirectly government owned companies have suffered, including one of the biggest foundry groups.
Level one Broad-Based Black Economic Empowerment (BBBEE) company
Concorde Foundry was eventually liquidated in 2015 and remained idle until new owners, also with strong links in the freight logistics and railway industries, purchased the company in July 2016. Level one Broad-Based Black Economic Empowerment (BBBEE) company SAFRail acquired 67 per cent of the shareholding with the remainder of the shares being taken up by NRE, an Illinois, US-employee owned company servicing clients in the rail, marine and power industries. NRE was offered 33 per cent because of their strong potential to secure and unlock export opportunities for various rail-related castings.
“Concorde Foundry Vereeniging has a history dating back to 1966 when it was established by the Apex Group, a group with many different engineering manufacturing entities and run by entrepreneur Johan de Kok. The foundry was set up as a mass production malleable and cast iron foundry, as well as casting other nihard and wear resistant materials for pump and lining products for the mining industry. The foundry would manufacture components for the Weir and Warman range of products. There were also tie ups with Vecor, SARCO President Brand Engineering,” explained Deon Louwrens, CEO of Infigo Foundry.
“The foundry would eventually become part of the Lennings Group and subsequently the Scaw Metals Group, before the acquisition by the Global Engineering Group. As part of our investigation and consideration to buy the foundry from the liquidator, we realised that Concorde Foundry had three major attributes that are not easily obtainable. These were a significant electrical power supply (3.5MW), a direct pipeline supplying natural gas from Sasol Gas and a valid Atmospheric Emissions License (also called “clean air license”). Concorde Foundry furthermore had a very good reputation for high quality castings, and our intention is to do as much as possible of what was done in the past and more, and in the process, keep and improve on this reputation of high quality where and when possible.”
“At the time of liquidation two long time employees of Concorde Foundry – Anton Trauernicht and Jacques van der Westhuizen – were shareholders of the company. With the acquisition it was important for the new owners to retain the services of Anton and Jacques, who both have over 20 years history with the foundry. Fortunately, these two experts agreed to join Infigo Foundry, and are now playing leading rolls in getting the business back on track. It would be very difficult if not impossible to accomplish what we are already achieving without their remarkable knowledge, skills, experience as well as the relationships and contacts that they have throughout the foundry industry. The number of old customers that are returning is evident of the trust in their character and ability, and we are deeply thankful towards Anton, Jacques and all the customers, and not forgetting the value of our ex-Concorde Foundry workers, as well as the support of old suppliers.”
Infigo Foundry is already winning back old clients and manufacturing pump components for them
“As no investment had been made in the foundry for many years and with it not operating for a couple of years the task in the beginning was to establish ties with suppliers and get the equipment back into working order.”
“The selection and relationships with suppliers is an important and interesting part of business, with quality, price and delivery as the important consideration when making decisions. These are the same service-factors that we have identified as the pillars of our business. We believe in building relationships with our suppliers since we are aware and appreciate the effort and sometimes investments in equipment, processes and people that suppliers have to make in order to supply us with specific and unique products. This is strongly related and especially important when considering the pillars of quality, price and delivery. We are however, also doing business in the open market and will be stupid not to compare pricing from different suppliers as part of ensuring our competitiveness. We have negotiated longer-term agreements with the main suppliers (for example scrap steel), and in the process negotiated favourable pricing.”
“Although we have seven different furnaces, which include induction, cupola and arc, at our disposal we are only making use of one refurbished and upgraded induction furnace and the arc furnace at this stage. We are investigating investing in a new transformer so that these furnaces can be used to their maximum capacity.”
“There are three different production lines in the foundry and all are related to the size of product. The green line caters for castings between 1 and 30 kilograms and the blue line for castings from 30 to150 kilograms. The third line is where we do floor castings and this caters for castings between 150 and 3 000 kilograms. The current capacity of the foundry, with the mentioned furnaces and production lines, is 400 tons per month.”
“We only started casting in February this year after a major clean up, servicing and maintenance project. This included refurbishing the gas supply line and negotiating the correct tariffs for electrical supply. It is amazing what you can save if you are on the correct tariff.”
“The initial plan was to only start the blue line for the production of hopper wheels, with a typical weight of 50 kilograms per wheel. With our experience in the railway industry we identified the hopper wheels, which are mainly used in underground mining situations, as potential product to manufacture. This is one product that, to our dismay, was nearly 90% imported from China. This could be in the region of 200 tons of product a month that is imported.”
“However, the intention to only start the blue line was soon changed when we received a significantly sized order from a textile manufacturing company for 7 500 links, which was a typical green-line product. The commissioning of the green line was challenging as it has many moving parts, including the 90 car carousel, nine jolters, 12 sand hoppers, 13 conveyor belts, two sand mixers, to mention a few. We soon also received enquiries for items that are too big for the blue line and we had no choice but to also commission and start the floor casting line. The end result, as expected, is that all three lines are in operation.”
Infigo Foundry has identified hopper wheels as a product that they can cast and replace imports that are being imported from China in a sizable amo
“The other important consideration is what type of steel is needed for which product. We are currently doing cast steel, SG and high chrome, and these can be cast on any of the three lines. The type of metal and amount required will determine the selection between the arc and induction furnace.”
“SG can only be done in the induction furnace with accurate control of chemical composition. Steel and chrome can be done in the arc or induction furnace, but the liner needs to be ‘cleaned’ after chrome production before continuing with steel because of chemical contamination to the liner during chrome production with elements that should not be present in steel. The complexity of production is better understood when realising the numerous variables that need to be considered and in place for each product.”
“At this early stage we are casting between 40 and 50 tons per month and this is not far off our breakeven forecast. However, with the projection of the orders that are starting to be rekindled with previous clients in the pump component industry this could be above the 100 ton per month mark in the not too distant future.”
“The business is very self-sufficient in its own way and can rightfully be described as an all in foundry. Besides the normal foundry operations that are required, including a patternshop, we also have a heat treatment facility and relatively large machining shop. This includes a couple of CNC machines and some big European origin vertical and horizontal borers and milling machines that once refurbished and updated will be virtually new again.”
“The directors of the company, both locally and internationally, including myself have many years of experience in the rail transport industry and we are certainly investigating opportunities in this area. Of course we are looking at other mining and general engineering clients so that we can get this foundry back to where it once was.”
“Infigo in Latin means impressive and we certainly will want to supply our clients with an impressive array of castings.”
For further details contact Infigo Foundry on TEL: 016 004 0035 or visit www.infigofoundry.co.za