The risks associated with starting a new business are inherent. We have all heard the statistics that a high percentage of new businesses fail within the first year of operation. In addition, manufacturing is an especially tough business, with competition from both domestic and international sources. Many once successful manufacturing companies have folded in recent years, often because of situations beyond their control. There are also many cases of failure because the owner has moved out of their skills set and tried to start something that they have no clue about. There are many other reasons that can be propagated but when a new business fails, money is lost, time and effort are wasted, and dreams go unfulfilled.
The melting area at Nicast Foundry and Engineering
They say that it is a myth that small businesses are started by entrepreneurs risking capital to make a profit. This does happen but typically businesses are started by people with certain technical skills when they are gripped by an ‘entrepreneurial seizure’ and suddenly feel a need to do things for themselves. Or there is the dissatisfied employee who believes he or she can do things better and opens a competing business. There are also those that find themselves unemployed and unable to find a new position or those that have recently been retrenched and need to somehow earn an income.
In my opinion, purchasing or acquiring an existing business is a much harder prospect to keep it profitable and successful, than starting a new business. Generally, the business owner has lost interest in the business or let the business become rundown and often, they have not invested in it. There are also systems and practices in place that you might not be familiar with. The staff culture is a whole new learning experience and there will be resistance from many because of their apprehension. These are just a few obstacles, some hidden, that the new owners have to overcome.
Despite these inherent risks associated with starting a new business, or acquiring an existing business, many people have been successful in fulfilling their dreams. In almost every case, success is born not just from a good plan formulated beforehand but by implementing it and in the case of an existing business getting employees to buy in.
This has been the endeavour of Sydney Zimucha and Rob Horsman, majority shareholders of Nicast Foundry and Engineering, since they acquired the foundry business at the beginning of 2019
The foundry takes great care with core preparation and have a core drying oven
Majority shareholders Rob Horsman and Sydney Zimucha
“We had a dream to one day own our own foundry after some long discussions that we had had while working together at Foseco South Africa in the sales department,” explained Zimucha, who is the Managing Director of the company. Horsman has taken on the title of Sales and Technical Director.
“It took us a few years to finally realise the dream after both of us went our separate ways when we left Foseco. But finally, this opportunity presented itself and here we are,” continued Zimucha.
Both Zimucha and Horsman have spent many years in the foundry industry on both sides of the ‘divide’. Zimucha, a Zimbabwean who has lived in South Africa since immigrating in 2007, started off as a moulder for well-known Zimbabwean foundry and manufacturing group Nimr and Chapman Manufacturing. When the manufacturing environment got tough in Zimbabwe, Zimucha decided to head south and has added 13 years of experience in the foundry industry in South Africa to the 17 years he already had. Most of the time was spent on the foundry consumables sales side but a few years were also spent back in a foundry as the manager. Zimucha has also done further studies in mechanical engineering and business management.
Besides having been in the foundry industry all his working career – 24 years – Horsman has a long connection to the industry. His grandfather from his mother’s second marriage – Richard Holton – was at one time the owner of Umgeni Iron and Steel Foundry in KwaZulu-Natal. His stepfather – Mike Holton – was very well-known in the South African foundry industry until he retired 12 years ago. His position at the time was Foundry Director with the OZZ Industries Group. Horsman started off in the industry as a patternmaker with Eclipse Foundries and held various positions within the foundry before moving across to the sales side with Foseco, with whom he spent 10 years.
Moulds that have been prepared
Nicast Foundry and Engineering cast a variety of components. This is a lead bath skid weighing 260kg cast in ASTM A297 HK (310 stainless steel)
“The foundry that we have purchased from Nicro Holdings was established in 1962 by Jimmy Thompson as Superior Castings and Patternmakers. He sold it on to Charl Marais before Nicro Holdings purchased it in 2009 and changed the name to Nicast Foundry and Engineering. We are continuing with that trading name but the ownership is registered with RSM Foundry,” explained Zimucha.
“We took over a strong base of clients and have increased the numbers in the short period that we have been the owners. All has not been easy in this period as the foundry was really operating as a melting facility when we took over. As Rob and I have many years of experience in the industry we could see that we had to make major changes. We knew it was going to be a challenge but we are getting there,” said Zimucha.
“And when I say changes it entails the systems from the floor to accounting, the culture and in time the capital equipment. New business owners are especially nervous about spending money because it’s so tight in the beginning. So if you can improve your methods, procedures and systems this will lead to an improvement in quality, productivity and costs. This will ultimately relieve the financial pain and open up opportunities to invest and make further improvements.”
Gear wheel blanks that weigh 330kg and have been cast in BS3100 A3 carbon steel
A 480kg bollard cast in BS3100 A3 carbon steel
“Planning is about preparing for the future, not predicting it. Nobody knows what tomorrow, next week, or next year will bring for your business. But you can make educated guesses based on the most current, accurate information available, as well as your own past experiences, and this should be an ongoing process. Effective planning is a mix of science, gathering pertinent information, and art, taking that information and turning it into a plan that will move your business forward over a specific time period.”
The foundry, based in the original factory in Bessemer Road, Vereeniging when it was established nearly 60 years ago, is well equipped with induction furnaces for melting of the ferrous range of special steels, stainless steels, cast iron, high nickel alloys and SG, and can melt up to 1 600 kilograms as cast castings.
“We are well capable of producing good quality metal but to do so we have had to make many changes,” explains Horsman.
“There was not much supervision with methods, productivity and material usage when we took over. Skills development has been a major thrust of ours as well as eliminating any wastage in manpower hours and materials. This has also meant implementing a major culture change, but we can now see that we have buy in,” continued Horsman.
“If you don’t control your company by defining key tasks and dictating how they must be handled, and ‘inspect what you expect’, then you don’t truly own the business. You are a spectator watching others play with your money. There are two overriding concepts successful owners understand: First, great procedures and processes need controls, and these in turn create great employees. This happens because procedures and processes operate the business, and employees operate the processes. This is one of those business basics that owners must understand to be successful.”
A 285kg propeller cast in Sanicro 28, an alloy of iron that contains nickel and chromium. It is a material often used to withstand corrosion from oxidation and rusting. It is especially resistant to sulfuric acid and phosphoric acid
Nicast Foundry and Engineering has a Bruker Q4 Tasman spectrometer that was supplied by IMP
“We also believe we are leaders and we can say that with confidence because we have the experience. We are in the foundry helping perform the various tasks on a regular basis. We are constantly reminding our employees what is important to us to make the business a success. If we are successful, then we will be able to reward those who meet and exceed our expectations.”
“We also implemented a mentoring programme last year when we took three students from the Vaal University of Technology. Two metallurgists and one mechanical engineering student spent time with us and we will be taking on one of the metallurgists full-time. This has helped with the culture change.”
“Using the funding that is available to foundries we immediately undertook an energy assessment and the results have been very informative. We now melt in the periods where you get rebates and this is contributing to the bottom line.”
“We already knew that we would have to refurbish our furnaces and the assessment confirmed this. They are now operating at their optimum however we do realise we will have to replace them going forward.”
“We have also purchased a 10-ton-an-hour continuous mixer that will be installed in the next few weeks. At the same time we will be installing a roller track system to move moulds and castings around. Both will improve our productivity and lead to cost savings.”
A 348kg tubesheet cast in Inconel 657, a high strength nickel chromium alloy (50Cr-50Ni-Nb alloy), commonly referred to as IN-657, is specifically used for components in furnaces that are fired by low grade fuel oils containing high levels of vanadium, sodium and sulphur
Castings ready for delivery
“The base for two 50 ton silos has been laid and once the silos are installed they will allow us to feed material into the sand mixer in a more productive manner, which will result in more quality improvements.”
“The biggest drawback that we have is that we don’t have a sand reclamation plant and currently we sit with a mountain of sand that can be processed and reused. We are addressing this aspect right now.”
“We are in the region of between 40 and 50 tons cast a month with stainless making up 35%, low to medium alloys 45%, and the rest cast iron and SG.”
High integrity, difficult shaped castings – ISO accreditation
“There are many foundries out there that are casting general engineering components but not many doing high integrity, difficult shaped castings. It is our intention to get more involved in this area and to do so we have had to implement an ISO system. Again we have made use of the funding available and by March we should have our ISO 9001:2015 accreditation.”
“One of our biggest clients supplies pumps and valves and we supply them with a number of components. Other clients are in the mining, petro-chemical, power generation and general engineering.”
“Anyone starting a business must be able to balance three sets of skills – entrepreneurial, managerial and technical – and there does not have to be an equal balance. In fact, in most cases, the technical skills should receive the least amount of attention, as the owner should be able to bring others into the business who can handle much of the technical work. In our case we made the technical skills, system planning and processes a high priority because there was a distinct lack of them.”
For further details contact Nicast Foundry and Engineering on TEL: 016 422 3976