Insimbi eyes exports with new smelter

Alloys supplier Insimbi said the commissioning of its new aluminium plant was "imminent" and it expected the smelter to be fully operational by "no later than November". The Johannesburg smelter is set to improve operational efficiencies and recoveries, helping the group capture foreign revenue it hopes will offset slowing demand at home.

"We are actively looking for other markets for our range of aluminium products, and with a weak currency, there are opportunities in the export market," the company said in its interim results statement.

Insimbi supplies alloys and refractory materials to the steel, aluminium, foundry and cement industries in SA and the rest of Africa. For the six months to August, orders from its two existing aluminium smelters declined as margins in the steel industry faced intense competition from Chinese imports and as frequent power outages curtailed output. Although Insimbi’s steel segment only makes up 12% of group revenue, the unit accounts for about 25% of operating profit.

In July, it acquired a 75% stake in Polydrum, a maker of durable plastic products, for R9.4m. Polydrum earned revenue of R2.9m and gross profit of R1.1m in the first month of inclusion in the interim results.

CEO Pieter Schutte said the firm would also improve its Nano Milling paints unit by investing in technical and marketing expertise.

Margins at its core foundry unit remained solid, supported by the change in product mix and a weaker rand — revenue rose 4.5% to R399.8m.