Elmacast Foundry enters business rescue

Elmacast Foundry, based in Nuffield, Springs, Gauteng, and its related company – Emidostax – have entered business rescue, unable to pay debts when they become due. The company is a producer of ferrous castings and it can trace its roots back to 1956. Components that were being manufactured by Elmacast range from pump casings, brake drums, bearing housings and gear housings.

The directors of the company conducted investigations into the financial affairs of the group, finding operations to be in financial distress, and on Friday 10 January 2025 – the company was due to open after the holiday period on 13 January 2025 – sent the following notice to its employees.

To: All Emidostax Staff
“We regret to inform you that, as of today, Elmacast and Emidostax have commenced with business rescue proceedings. This decision has been made in light of the current financial challenges, and we are taking this step to seek a sustainable way forward.”

“Business Rescue is when a company that is struggling financially works to review its operations and find ways to keep the business going. This process is done with the help of a business rescue expert.”

“It is important to note that the company will not be opening on Monday, 13 January 2025 as we will be unable to carry overheads at this time.”

“The assigned business rescue practitioner will need time to assess the current situation of the business and will then only be able to make decisions around operations going forward. The company will keep you updated as developments occur and as we are informed by the business rescue practitioner.”

“We understand that this may be a difficult time and we will provide you with support and information where possible. Please direct any questions or concerns to Jordanne van Niekerk at jordan@tauironworks.co.za or 071 357 1886.”

“Our primary goal is to ensure the long-term stability of the company and the protection of jobs wherever possible.”

The foundry, established in 1956 and primarily served the electrical motor industry supplying castings for motor casings. Over the years the foundry shifted its focus to supply products for the mining, agriculture, automobile, and cement industries.

For many years Elmacast was part of the Actom Group, before the new owners got involved.

A major investment in 2018 was made by the new owners to convert the foundry into a grinding media supplier to the mining industry. The owners at the time were convinced there was a future in grinding media, and this initially entailed spending R134 million to do upgrades and expansions to the foundry.

The project entailed the installation of four new induction furnaces, an automated continuous caster, and a fully integrated double line heat treatment plant. Further developments in the foundry included upgrades to the existing two 6-ton induction furnaces, an overhaul of all cranes, the installation of a shot blasting machine, a ball-breaking machine, a shell coating plant, and a thermal sand reclamation plant. With the initial goal that the foundry’s capacity would increase to produce more than 2 500 tons of grinding media comprising high chrome balls a month.

However, what the new could not foresee at the time, were the various barriers to entry into the grinding media business and that the timeframe to validate your product, to get it approved and accepted takes an extended period, exasperated by the fact that the market of the product – chrome cast grinding balls in sizes from 40mm to 110mm with Chrome (Cr) contents of up to 28% – is extremely competitive and has many established manufacturers and suppliers, it was reported at the time.

Additionally, the influx of products from China, like other products in South Africa, had a major influence on the local industry.

In 2021 the new owners decided to exit the grinding media industry and revert back to being a foundry.