API’s first pipe mill to be followed by two more as water projects touch R5bn
He estimates the plant’s first year of turnover will be between R300-million and R400-million, with the facility, located close to steel producer ArcelorMittal South Africa, busy “from day one”.
What is driving business, says Jansen van Nieuwenhuizen, is a shortage of capacity in the South African steel-pipe manufacturing industry, this while an estimated national five-year, R5-billion pipeline of work looms in the water sector.
Yes, he notes, government tenders can take up to a year to be allocated, but they do move quickly once they have been awarded.
Jansen van Nieuwenhuizen says the current mill, which cost R70-million to build, is only API’s first mill, with a second one – with a similar 100 000 t/y capacity of 20-inch to 120-inch diametre steel pipe – to be commissioned by the end of the year.
This second mill will be constructed on the same 30 000 m2 site, in anticipation of increased demand from projects in the country’s northern provinces.
Current major clients include regional water boards and metropolitan councils, with future clients hopefully including the mining industry.
API’s planned third mill will produce 8-inch to 20-inch steel pipes, of which there is currently only one manufacturer in South Africa.
However, this mill is still two years away, and it might be on a different site, says Jansen van Nieuwenhuizen.
As for the larger diametre pipes, competition comes from two manufacturers, both housed within big construction groups, which the API CEO believes he can outdo in terms of costs, based on better technology and efficiencies.
“We are the only company with the experience to design and build all the equipment to start and run a pipe factory. This means we have a technological edge.”
Jansen van Nieuwenhuizen’s 28-year expertise in the pipe industry has seen him work for Group Five Pipe and Hall Longmore, with the last ten years spent in Nigeria as he set up a pipe plant for an Israeli company.
This plant manufactures oil and gas pipes to American Petroleum Institute standards, which he has also adopted for the Sasolburg plant.
Jansen van Nieuwenhuizen, an electrical and mechanical engineer by training, still spends around three weeks out of four at the Nigerian facility.
API is currently ramping up its first mill from one shift to three shifts, and will employ 120 people once this is completed.
The JSE-listed Sanyati group owns 27% of API, with Jansen van Nieuwenhuizen the remainder.
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