beneficiation
All photos courtesy of Afrimat
Nationally, Afrimat Readymix consists of four divisions, namely KwaZulu-Natal, the Western Cape, the Free State and, the most recent operation, its Mpumalanga division.
“ We started our Mpumalanga division in July 2016. The KwaZulu-Natal and Western Cape divisions were family businesses that merged with the establishment of Afrimat in 2006,” says Paton.“ Afrimat owns approximately 100 ready-mix vehicles nationally and a large component of that is in the Western Cape; it is therefore the largest part of our ready-mix business at the moment.”
Prominent revenue from mobile plants
Although Afrimat’ s mobile operations in the Western Cape are low in numbers compared to its fixed plants, the volumes that came out of its mobile units in 2016 surpassed revenue from fixed plant operations.
Approximately 25 % of projects came from mobile work, while it comprises only 10 % of the equipment.
Afrimat has completed a prominent amount of projects in the renewable energy sector through its mobile operations.“ We recently finished a job on a wind farm near De Aar and have been involved in a couple of solar projects.”
The regional fixed plants include operations in Bredasdorp, Vredenburg, Worcester, Hermanus, Robertson, Botrivier
Afrimat’ s ready-mix plant in Worcester. and Ceres, while Afrimat owns four fixed plants in the City of Cape Town. The mobile plant fleet comprises three units, which, as stated, have been predominantly deployed at renewable energy projects.“ The future of wind farms seems to be in the balance at the moment, but we have been working on solar and wind farms in rural areas for eight years, and we are confident that this business will continue.”
Is the industry awakening from a market slump?
Afrimat has a strategic long-term vision of investing in people, technology, and product consistency, and thus, remaining competitive is critical to its business sustainability.
The ready-mix industry is certainly looking back on a couple of tough years. Barriers to entry for ready-mix operations remain low, and although numbers could appear lucrative, several emerging players had to bite the bullet and shut down over the past five years, struggling to compete in an ever-increasing competitive industry.
“ The market at the moment remains very aggressive and that’ s a big challenge for the industry overall. Competition is rife and prices are low. At least 10 players are competing for business. I would like to think that we are operating in the top three of the ready-mix producers, but it remains challenging nonetheless,” says Paton.
However, despite these challenges, 2016 has been a great year for Afrimat Readymix, specifically for the Western Cape division.“ Generally, we saw an increase in activity across the province. This, coupled with our focus on mobile plants, has made it one of our best years for a while. We will remain focussed on customer interface, personal relationships with clients, and service delivery to maintain our market position in 2017.”
The recent announcement of civil and building investment at the V & A Waterfront and Cape Town’ s central business district( CBD) bodes well for the business outlook; therefore, Paton hopes that good volumes and sales will continue as a result.
A further issue that needs to be taken cognisance of is the competitiveness in the cement industry, which trickles down to ready-mix business.“ When you start pushing prices down, it naturally has an impact on your business. Prices have dropped nationally and if it keeps dropping, you have to sell the same volumes to obtain the same margins, putting pressure on the ready-mix industry. Although the Western Cape is not as severely affected, producers need to keep an eye on this challenge.”
Towards wiser water use
Another challenge is that of water restrictions in Cape Town.“ We are investigating a number of initiatives to help reduce water, including the development of creative mix designs and recycling water in our plants,” says Paton.
A ready-mix plant uses approximately 300 000 litres per month. With the severe drought plaguing the Western Cape, a number of ready-mix operations have started to look at using recycled water. When a ready-mix truck comes back from a delivery, normally the truck is rinsed and the water is put into a recycling pond and then pumped back.
“ We have not seen penalties yet, but the local authorities have indicated that users who exceed their daily limits will be penalised. We are therefore looking at various avenues to reduce the amount of water in our concrete mixes. If you do that, you reduce the amount of cement and therefore, you can also improve cost efficiencies,” says Paton.
Water plays a big part in the cost of concrete. The more water you use, the more cement you need to add to your product— cement being seven times the cost of aggregates.
QUARRY SA | march 2017 _ 25