Hulamin turnover up 22% to R16bn

Hulamin, a leading aluminium supplier and exporter, reported a 22% increase in turnover to R16 billion despite a 4.6% decline in sales volumes. Geoff Watson, the Interim Chief Executive Officer of Hulamin, joined CNBC Africa to discuss the company's impressive results and future growth strategies. Watson highlighted the key initiatives that drove the growth, including increasing can stock volume by 10,000 tonnes, improving scrap utilisation by 15%, and implementing continuous improvement activities resulting in an additional 5 to 10,000 tonnes without significant costs. The company recorded a profit of 667 million, showing a remarkable 339% increase over the previous year. Watson, who recently stepped in as the interim CEO, emphasized the resilience and innovative spirit of South African business people in navigating challenges within the infrastructure environment. He praised the team's commitment to continuous improvement and announced plans to release an additional 10,000 tonnes of can sheet volume through capital expenditure in the upcoming year. The primary growth focus for Hulamin moving forward is on can sheet production, a product with steady demand independent of GDP fluctuations. With the rising preference for cans over plastic due to environmental concerns, Watson sees significant growth opportunities in the beverage packaging sector. The company aims to capitalize on the projected 5% annual growth in South Africa, driven by increasing demand for cans. When discussing pricing strategies, Watson mentioned that cost-driven price increases were necessary to offset expenses like energy and alloying elements. The company has implemented clauses in contracts to manage cost fluctuations effectively. Despite global economic uncertainties, Watson expressed confidence in Hulamin's ability to adapt and maintain its competitive position. Regarding his tenure as interim CEO, Watson revealed that the company is in the final stages of candidate selection for a permanent CEO. He anticipates a new CEO to be appointed by early quarter three, allowing for a smooth transition of leadership. While geopolitical tensions remain a concern, particularly in Europe, Watson acknowledged the market's ability to adapt and stabilize amidst challenges. In line with industry trends towards sustainability, Hulamin has earmarked 150 million rand for ESG projects over the next five years, focusing on water and energy initiatives. The company aims to secure funding for these projects to drive environmental and social impact while maintaining financial returns. Watson highlighted the commitment to ESG projects within South Africa and emphasized the importance of stabilizing operations before considering expansion across the continent. In conclusion, Watson reiterated Hulamin's dedication to enhancing operational efficiency, investing in sustainable practices, and driving growth in the can sheet segment. With a strategic focus on innovation and continuous improvement, Hulamin aims to solidify its position as a key player in the aluminium industry.