Black Manufacturers Are No Longer A Myth

Naledi Inhlanganiso (Pty) Ltd is an industrial group operating in the basic iron and steel manufacturing sector. Naledi Foundry is one of the largest black-owned foundries in South Africa and has roots going back to 1912

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Throughout the years, the foundry was very involved in the automotive sector where it was a major casting supplier of components but has since diversified to service the locomotive, mining and energy industries.

Naledi acquired the foundry in 2013 through a consortium that included the Industrial Development Corporation (IDC), to gain a majority stake in the then listed Dorbyl Ltd.

“I used all of my resources to buy the shares but I still needed to approach the IDC and they were prepared to assist. Once we acquired the foundry, our first challenge was to address the fact that it had been close to 30 years since the plant had been upgraded in any way, so we knew we would need to invest heavily in order to make it what we needed it to be,” says Group Executive Chairman, Sibusiso Maphatiane.

Immediately after delisting Dorbyl in July 2014, the shareholders initiated an extensive capital investment plan as well as a corporate restructuring to separate the foundry from the rest of the Dorbyl group. The restructuring was completed in May 2016 and the capital investment plan in May 2017.

“What I also realised when I first acquired the plant was that the full executive team was made up of white, Afrikaner males, with similar representation in middle and senior management. The most senior black people there were working as foremen. My thought process was that if these guys in management were that good, the factory wouldn’t have been where it was at that stage. So we recruited new people and our top levels of management are now 70% black and 46% female. Our middle management is made up of only youth. I subscribe very strongly to youth development and female development,” he says.

More recently, Naledi has also acquired DCD Ringrollers, a division of the DCD Group, which is active in the manufacturing and fitment of solid metal tyres for trains.

“It has taken almost 25 months to complete this deal, highlighting that endurance is a critical skill for any entrepreneur. This plant is the largest in the world and the only one of its kind in Africa, while the foundry is third-largest in Southern Hemisphere,” explains Maphatiane.

For Maphatiane, the first big break came in 2013 when Naledi submitted a bid in a public tender process for the supply of cast and forged train wagon wheels to Transnet Engineering, a division of Transnet SOC. After various stages of negotiations, the bid for the manufacturing of forged wheels was awarded in September 2014 and the final supply agreement was signed at the end of March 2015.

“One of the key challenges I have faced as an entrepreneur and businessman is a lack of support in other sectors. When I was awarded the tender, it was the first time they gave a tender to a black man. It was the men at Transnet—Richard Vallihu and Thoba Majoka—who are the real heroes of the story. They were prepared to take the plunge and they took a risk with me. We now also supply Eskom with grinding media,” he says.

One of the basic operations in minerals processing is the grinding of the ore to the point where valuable minerals are liberated from the host rock. Subsequent operations then separate the desirable minerals from the gangue or waste.

The grinding balls form the major portion of the consumable costs and they can be as high as 40% to 45% of the total costs of extraction.

“For me, it’s important to play a more significant role when it comes to the issue of importing products that can and are being manufactured here. Have a look at the private and public sectors and you will see that companies who get the big contracts still import components from overseas. While we have made a sizeable investment into the foundry to be able to manufacture grinding media, Eskom still seems to prefer imports from China. Ours are cheaper and of a good quality, so we have to stop and ask ‘why?’.

“I am here and I will prove that we can supply local components. In the next 24 months, we will be manufacturing undercarriages, bogies and wheels, so why import when there will be a local supplier, even more important, a black supplier? With more support from these entities, we could bring in a third shift and that means 50 more jobs,” he says.

Maphatiane hopes to create a company that enables the youth to be exposed to practical experiences, rather than employ people with engineering degrees to sit around the office.

“This is a factory where, if you want to be a wheel specialist, we can provide that opportunity. I believe that if these youngsters are properly introduced to all aspects, they can then go and create similar things and find new opportunities of their own. I want to have an impact on these young people, teaching them not to be dependent but independent. We don’t see that now and it’s because people are importing everything,” he says.

A man who started his career as a teacher, for him, job creation and skills development is his biggest driving force.

“I also don’t believe that everything has to be race-driven. We must work together and that is what I put across to them. I engage with both cultures and make sure they understand that it’s not black or white but discipline, respect and appreciation for each other, and I am extremely passionate about that,” he says.

Maphatiane’s father, who worked as a foreman in his youth, is also where he finds much of his inspiration. Remembering himself as a young man, he can see his father sitting beside him, the two of them studying for their matric exams in the same year.

“The year I entered matric, my dad joined ABET to register for matric. He would sit next to me and study.

“He passed and we both registered for our degrees together. He had a sense of appreciation for the importance of education and I appreciate what he did because it gave me an advantage. When I took over the foundry, it was, therefore, important for me to break those racial structures because black people need to be given a chance to make a positive influence,” he says.

It is also critical for him to have females working in the factory, not just men, and the foundry CFO is now a black female. “I would get very emotional when I saw these young female metallurgists being treated as tea girls but now some of them have gone on to study for their MBA,” Maphatiane says proudly.

Through Naledi’s various divisions—the Foundry and Ringrollers—over 450 people enjoy permanent employment, with the possibility to create at least 40 more jobs in the near future.

“I started out as an accountant and a teacher but slowly I have moved more into the engineering space. I love the fire that comes from steel touching steel, it talks to me and it’s where I finally found my calling,” he says.

Maphatiane went from working at Vista University as a lecturer to joining the government as Head of Finance for the Department of Finance and SARS, as it was then called in 1996. The department was eventually split and he went to SARS where he quickly realised he didn’t enjoy the environment. The move did, however, trigger his business acumen and he moved into the IT space.

“Again, there was nothing unique. I knew I needed to do something that would excite me and it was only when the government started talking about development in the country that I finally found my rightful place,” he concludes.

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