It looks like the much-speculated end of one of South Africa’s oldest foundries has finally materialised. An auction notice has been posted on the WH Auctions website announcing the sale of the going concern. The notice reads:

Offers invited: Cast Products SA (In Business Rescue)
WH Auctioneers invites offers for the acquisition of Cast Products South Africa (In Business Rescue) as a going concern, including the Boksburg Foundry, Wheel Plant, and Union Junction Plant.

Interested parties to email prelenan@wh.co.za for info (NDA required). Submission deadline: 15 August 2025 at 4pm. This is an opportunity to acquire a large-scale industrial operation with significant infrastructure and strategic value in the South African manufacturing and heavy engineering sector.

Assets included in the going concern sale:
Boksburg Foundry – a long-established foundry with extensive capacity
The Wheel Plant – serving key sectors including rail and transport
Union Junction Plant – a critical part of the group’s heavy industrial capabilities

Interested parties will be required to sign a Non-Disclosure Agreement (NDA) to access further information. Submit offers by: Friday, 15 August 2025 at 16:00 (SAST)

According to the BRPs through a high operational and production-focused turnaround, Cast Products South Africa was taken from an average monthly loss of R40 million to profitability in November 2022. The wheel plant was supposedly running with about a 50% scrap rate. The BRPs Engaged Business Turnaround and Chrisyd Advisory Services only took control in January 2022. An impressive turnaround

Background
Cast Products South Africa (CPSA) was placed under voluntary business rescue in December 2021, due to financial distress. Engaged Business Turnaround and Chrisyd Advisory Services were appointed as the Business Rescue Practitioners (BRPs). The plan aimed to restructure the company, stabilise its operations, and achieve a better return for creditors than liquidation. A key aspect of the rescue involved addressing issues like a dysfunctional management team, lack of internal controls, and ineffective procurement processes. The business rescue process involved negotiation with unions, including NUMSA, to avoid forced retrenchments and secure wage increases for employees.

Cast Products South Africa (CPSA) is 85% owned by the Industrial Development Corporation of South Africa (IDC) and US-based Amsted Rail held the remaining 15% stake. Amsted Rail had been purchasing product from Scaw Metals since 2003.

Anglo American, which declared Scaw noncore in 2009, sold its 74 per cent stake to the IDC for R3.4 billion in 2012. In 2017 the IDC started the restructuring of its steel subsidiary Scaw Metals into three standalone entities. In 2018 it was announced that the IDC had reached an agreement with Barnes Southern Palace (BSP) to buy into Scaw’s rolled products and wire rod products businesses. Shortly thereafter the Competition Commission approved the proposed merger, without conditions, whereby Magotteaux International SA (Magotteaux) intended to acquire an interest in and acquire management control in Grinding Media South Africa (Pty) Ltd (GM Newco), which was formerly the grinding media business division of Scaw Metals South Africa.

In March 2018 it was announced and reported by the IDC that US company Amsted Rail Company Inc had purchased the foundry division of Scaw Metals South Africa, which had changed its name to Cast Products South Africa. This name would later be changed to Amsted Foundry Solutions SA. The transaction was approved by the Competition Commission. However, it was subsequently reported that Amsted Rail only held a 15% stake.

Magotteaux, a global leader in high-performance grinding media, announced in 2023 the successful further acquisition of 36% of the shares of Grinding Media South Africa (GMSA), reaching a majority stake (51%) in GMSA. After the acquisition of the majority stake, Magotteaux remains in partnership with its two equity partners, IDC and Main Street.

The rolled products and wire rod products businesses and the grinding media business have continued to operate successfully and have made large investments in new processing equipment. But CPSA struggled.

In 2016 Cast Products South Africa commissioned a new R160 million high-volume moulding line manufactured by Omega Foundry Machinery

When Amsted Rail bought into the foundry division it also took over the running of the foundry. But it supposedly did so remotely, which was not an ideal operational situation. Not on official record but apparently the US company also battled with the work ethics and productivity of the staff, did not have a warm relationship with the unions and with the manufacturing industry facing challenging economic times when Covid came along it did not take long for Amsted Rail to bail. The BRPs would later report that: “The conversion of debt to equity will see the IDC’s shareholding in CPSA increase to 93.5% and that of Amsted Rail reduce to 6.5%.”

Business rescue
In January 2022 the business rescue practitioners took control of CPSA with big ambitions and plans. It was reported in the Daily Maverick that the BRPs combined billings amounted to R21 million over the first four months of the process.

In its business plan the BRPs announced that the BR Production Team “is headed by Danie Slabbert (Professional Engineer).” Yes, remember him. Danie Slabbert was the MD and CEO of Steloy Castings. In 2016, Steloy Castings, to which the IDC contributed R120 million, was placed in liquidation.

Johan Du Toit, a senior practitioner of Engaged Business Turnaround, one of the two BRPs appointed, was in charge of proceedings at CPSA. In his CV that was proudly displayed on the Engaged Business Turnaround website at one time but is no longer there it describes: “In 2008 Johan took a 12 months “non-corporate” sabbatical assisting a colleague in a manufacturing business, Steloy. Steloy specialised in manufacturing products for the petrochemical industry and supplied parts to companies like Aramco in Dubai, Sasol, Eskom and several major pump manufacturers in South Africa.” Yes the same Steloy Castings that Danie Slabbert was the MD and CEO of. Just a coincidence or was it calling on an expert in the foundry industry.

IDC loans
The BRPs reported that the IDC has loaned CPSA R450m in post-commencement finance to fund operations. In answer to DA questions in parliament a summary per Sector of IDC Approvals for FY2024/25 is given and it lists Cast Products South Africa (Pty) Ltd as receiving R275 000 000. No period is given or what it was used for. It is now rumoured that a further R70 million has been injected by the IDC but there is no comment from the IDC on this.

Business rescue transaction of the year
The Cast Products South Africa (CPSA) business rescue transaction was awarded the 2023 Business Rescue Transaction of the Year by DealMakers. “This award recognises the successful restructuring and restoration of solvency for CPSA, the largest foundry group in South Africa, which was placed in voluntary business rescue in December 2021. The restructuring involved the restructuring of R1 billion in liabilities, retaining manufacturing capacity, and preserving jobs.”

What a joke! Let us remind you of the report in Castings SA in December 2023:

Below is the content of the memo sent out and signed on 20 October 2023 by business rescue practitioner Johan Du Toit.

“As you are all aware CPSA is has been under business rescue from 2022. The company has experienced some difficult times during the year 2023, but the Business Rescue Practitioners and the Executive team are doing all that is possible to ensure business sustainability amidst all the challenges. At the beginning of this year, there was a negative impact due to the low order book as a result of some key client reviewing and cancelling of some significant orders, which affected our operations and cash flow.”

“We are happy to report that there has been a significant improvement in sales and order intakes. As a result of these good order books, we have had to raise funds to ensure a ramp up in production. We have always been supported by our shareholders (IDC in funding and ensuring that the business fulfils its financial obligations including buying materials and paying creditors, and paying salaries amongst others.”

“At this stage, in the month of October 2023, we have a negative cash flow, which makes it difficult to continue to operate. Business Rescue Practitioners (BRPs) are in discussions with IDC to find a suitable solution to provide financial assistance and allow the business to continue normal trading. While these discussions are ongoing, the BRPs and CPSA Management are left with no other option but to temporarily close the business operations until further notice. This will be communicated accordingly as and when the situation improves.”

What does this mean to employees?
“Employees will be expected to stay at home during this period, and the company will legally owe salaries for all the days which employees would have been scheduled to work under the current short-time arrangement. It should be noted that this is a temporary closure of the business, and as soon as the finance becomes available, the business will go back to normal.”

The business rescue practitioners tasked with the business rescue responded with the following statement with regard to questions asked about this memorandum sent to staff on the 20th October 2023. “We confirm that all CPSA foundries are presently running as normal, and that the closure was a temporary measure that was instituted for a week whilst the business rescue team was resolving internal matters at the company.”

But the business rescue transaction of the year award was still given to the BRPs!!!

It really is sad to see the demise of these foundries. Of the five divisions, three were identified as core. The wheel plant foundry, of which there exist only three in the world, with the SA plant supplying Transnet with 60% of its spare parts, the Boksburg Foundry, involved in the manufacture of smaller parts for the mining industry, and the Union Junction Foundry, supplying larger parts for Transnet, Eskom and the mining industry. The Standard Foundry property and Eclipse East Foundry were sold to the GeT Metal Group. Eclipse was sold as a going concern, and the Standard Foundry property was a thriving foundry until Scaw Metals acquired it and closed it.

The Union Junction Foundry has been ‘bumbling’ along waiting for those orders to come from Transnet and Eskom. The wheel plant, which was once a proud facility to talk about, is also waiting for those orders to materialise from Transnet.

It appears now that the state-owned IDC has had enough and wants to off-load because the other state-owned enterprises are not giving out the orders. Maybe they are getting their castings from China? Who knows.