This issue of the Sassda Stainless Steel magazine is our biggest yet and is filled with information and insight from the South African and global worlds of stainless steel! Look out for our anchor feature on the potential for stainless to reinvigorate South Africa’s rail sector, our regular State of the Stainless Steel Nation interview with Executive Director Michel Basson, two in-depth case studies on i. Nitric versus citric acid passivation and the ii. The true benefits of lifecycle costing .In addition read our country focus on the lucrative and investor-friendly export market of Rwanda and fascinating profiles on Bertie Blom from Macsteel VRN Gauteng and the newest member of the Sassda Team Tebogo Nkwe.
ISSUE 2: 2023
STAINLESS ISSUES A RALLYING CALL TO SA RAIL
CAN STAINLESS COMPETE WITH PLASTIC?
NITRIC OR CITRIC A passivation challenge for the ages!
JOHN CLUETT A legend remembered
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Contents
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Perspective With great challenges comes the opportuity to grow! Market Intelligence The best of the GPS E-Newsletter Market Intelligence Webinar report back - can stainless steel compete with plastic? Market Intelligence State of the stainless steel nation Demand Drivers SA rail industry strongly advised to embrace stainless steel amidst crisis Africa Profile Rwanda on the rise Case Study The ‘acid test’ when it comes to effective passivation Case Study Real world examples of the true value of life cycle costing
Technical Insight How to enhance the beauty of stainless steel Professional Profile A passion for stainless Obituary A renowned pioneer in the brewing industry and champion of stainless steel Staff News A quest to elevate SA’s stainless steel sector Member News Sassda collaborates to enhance stainless steel tooling skills in SA Member News Southern african steel summit to drive industry competitiveness and innovation Sassda News Record attendance and perfect weather make sassda KZN golf day a resounding success! Sassda News Sassda hosts successful visit to the only stainless steel mill in Africa!
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Adverts • Columbus Stainless
•NDE • PFERD SA • Macsteel VRN
Advertorials • Multi-Alloys • Grinding Techniques
• EMV Africa • Fastenright
perspective
With great challenges comes the opportunity to grow! The South African stainless steel industry has had a significant impact on the country’s economy and industrial development since 1964. This is due to the fact that stainless steel is a versatile material known for its strength and durability, and I believe that these are the characteristics of the people working in the South African stainless steel industry. As you will see in this publication, it is also time for final farewells to one of these people John Cluett, who was a legend and stalwart in not only our industry, also in the international world of breweries.
Contact us
TELEPHONE NUMBER 011 883 0119
EMAIL info@sassda.co.za WEBSITE www.sassda.co.za
Sassda
MICHEL BASSON Executive Director michel@sassda.co.za FRANCIS LE ROUX Head of Administration francis@sassda.co.za
MANKABE MORE Education & Training & Marketing mankabe@sassda.co.za TEBOGO NKWE Market Intelligence and Lobbying tebogo@sassda.co.za KIM STEVENS Events, Email Marketing and Website kstevens@sassda.co.za
JOSE HERON Accounts jose@sassda.co.za
LUISE ALLEMANN Content, Social Media and PR luise@mediaink.co.za
Stainless steel is published triannual and is distributed to stockists, distributors, fabricators, specifiers, consulting engineers, architects, mining, petrochemical and chemical industries, food beverage and pharmaceutical industries, consumer outlets, end-users, educational institutes and provincial and government departments. Sassda makes every effort to ensure the accuracy of the contents of its publications, but no warranty is made as to such accuracy and no responsibility will be borne by the publisher or Sassda for the consequences of any actions based on information so published. All opinions, views and expressions contained in this publication are not necessarily those of the management of Sassda. The contents of this publication enjoy positive protection under the Copyright Act and therefore copyright thereof is expressly reserved. Any copying, publication and distribution of part or whole of the publication is prohibited unless consent is granted by Sassda.
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been made to expand the range of stainless steel products manufactured locally and increase value-added processes. This has not only helped the industry remain resilient but also stimulated technological advancements and increased its market share. An excellent example of this is the use of 3CR12 in the Rail sector and our interview with Columbus Stainless shines a spotlight on the incredible role stainless steel still has to play within this sector. In addition, our association has actively participated in forums to stimulate local demand and contribute to increasing exports, especially in African markets. Read our overview on doing business in Rwanda in the pages to follow. Solid prospects Looking ahead, the country’s infrastructure development plans, urbanisation, and increasing consumer demand for stainless steel products present opportunities for expansion. However, the industry needs to continue investing in research and development, skills development, and adopting advanced technologies to remain competitive in the global market. By leveraging innovation, diversification, and sustainable practices, the industry can position itself for continued growth and success in the future.
State of our stainless steel nation Looking at the current ‘State of the Stainless Steel Nation’ in this issue, one of the notable aspects of the South African stainless steel industry is its contribution to job creation and economic growth. The industry has provided employment opportunities for a significant number of people, both directly and indirectly. From stainless steel production and processing to downstream manufacturing and fabrication, numerous jobs have been created, contributing to the livelihoods of many individuals and families. In this edition, we feature an excellent example of the young professionals in our industry driven by a passion for the material and good business. Furthermore, this issue shows the industry has played a crucial role in advancing technological capabilities within the country. The production and processing of stainless steel require advanced machinery, equipment, and expertise, leading to the development of specialised manufacturing and engineering skills. This has helped South Africa build a competitive advantage in the global stainless steel market and attract foreign investment. A volatile market In recent years, the South African stainless steel industry has faced several challenges. Economic fluctuations, global trade tensions, and fluctuating raw material prices have had an impact on the industry’s performance. Additionally, competition from international manufacturers and fluctuations in demand have put pressure on local stainless steel producers. Sassda therefore maintains a good relationship with both government and peer organisations to address these impacts on our members and industry. To address these challenges, the industry has focused on enhancing its competitiveness through innovation, research and development, and diversification. Efforts have
We hope you enjoy this issue!
Michel Basson Sassda Executive Director
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The best of the GPS e-newsletter Each month Sassda rounds up a selection of global and local market intelligence articles that are sent to our members in an easy-to-read package of content. They’re designed to highlight pockets of potential growth in demand for stainless steel. Here are some of the best articles from the last few issues... market intelligence
New R30-Billion ‘mega city’ planned for South Africa Citigroup Inc. is teaming up with South Africa’s Gauteng provincial administration to fund almost R1.4-Billion of investment in a new mega-city project and airport south of Johannesburg. The development will include an airport, an industrial area, a city, and agricultural areas. The US lender, through its South African unit, will make a seven-year loan facility available to a special purpose vehicle that will directly invest in infrastructure for the Mega River City on the banks of the Vaal River, Citi South Africa head Peter Taylor said. The development could attract as much as R30-Billion in additional investment, he said ... Read more
Competition Commission launches inquiry into local steel market The Competition Commission has gazetted the draft terms of reference for a new market inquiry into the local steel industry. The inquiry will examine whether there are any features or a combination of features in its value chain that impede, distort, or restrict competition in the sector. The inquiry will be confined to only two levels of the steel value chain - the raw materials and inputs, and the upstream steel production level. In addition, the inquiry will focus on the impact of these levels of the value chain on the domestic downstream steel market... Read more
Construction mafia damage to the economy is worse than the government thinks The construction industry’s losses to marauding mafias are higher than what the government estimates them to be, SA Forum Civil Engineering Contractors (Safcec) estimates show. At a recent webinar, Public Works and Infrastructure Minister Sihle Zikalala cited a report that the industry had lost R63-Billion to criminal disruptions since 2019, but the Safcec estimates put the figure at R63- Billion for 2018/19 only. In addition, Safcec estimates that in January 2020 losses for that year alone would amount to R40.7-Billion ... Read more
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Government takes R2.7-Billion stake in one of South Africa’s newest & fastest-growing cities The government, through the Public Investment Corporation (PIC), is set to acquire a 30% stake in Waterfall City for R2.7-Billion, after signing a binding agreement with developer Attacq this week. The PIC and the Attacq Waterfall Investment Corporation (AWIC) have concluded binding legal agreements, detailing the terms and conditions of the proposed transaction. The newly developed city, which is home to Mall of Africa, the PwC tower, and a host of other new residences and office developments, is one of the fastest- growing precincts in the country. .. Read more
A hydrogen economy may fuel a more solid development drive in Southern Africa Southern Africa’s energy sector, including Namibia and South Africa, is exploring the potential benefits of embracing a hydrogen economy, primarily driven by green hydrogen, a clean and natural energy source. Recent interest in this arises from the global push for sustainable energy options. Green hydrogen can be produced by electrolysing water into hydrogen and oxygen using energy from green sources like the sun, water, and wind. This process is deemed “green” because it does not make greenhouse gases. When hydrogen fuel is burned, it turns into water instead of carbon dioxide, as happens when fossil fuel is burned. Of particular value in the move towards a sustainable energy system, green hydrogen can be used in hard-to-decarbonise areas like heavy industry and transportation ... Read more
Stainless steel tubes and pipes benefit from high growth industries The current economic uncertainty has left the tube, pipes, and fittings sector relatively unscathed. Overall, the post-COVID economic recovery – though weak because of inflation and the ongoing war in Ukraine – provides a positive environment, with certain regions and sectors driving growth. The global stainless-steel tubes and pipes market, estimated at $32-Billion in 2021, is anticipated to grow to $44.7-Billion in 2028, with an annual compound growth of 4.6% (1) ... Read more
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R200-Million boost for Cape Town’s economic sector development The Cape Town City’s Council-approved budget for 2023/24 has allocated close to R200-Million on various programmes aimed at assisting all sectors and levels of the economy, from work seekers, entrepreneurs, small business, and high growth sectors. In addition, the Economic Growth Directorate is planning on spending around R100-Million on capital works on the city’s strategic economic assets and informal trading infrastructure… Read more
Government finalising big change for SA business Trade and Industry Minister Ebrahim Patel says his department will finalise the Companies Amendment Bill in Cabinet within three months, which aims to narrow the gap between the highest-paid and lowest-paid employees at listed companies. The proposed Bill, published for public comment in 2021, said that listed companies would have to disclose the ratio of the top-paid to the bottom-paid 5% of workers. Speaking before Parliament, Patel said that finalising the Bill will help to address South Africa’s inequality issues ... Read more
Durban port partially privatised
Africa’s biggest harbour will be partly owned and operated by the Philippines’ International Container Terminal Services Inc., a first for South Africa’s national ports company. The company, ICTSI, has been selected as an equity partner to run and expand Durban Container Terminal Pier 2. Almost three-quarters of the freight volume moved through the eastern port goes through the terminal, accounting for 46% of South Africa’s total port traffic, according to state logistics company Transnet. .. Read more
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Webinar Report Back - Can stainless steel compete with plastic?
T o shed light on the potential of stainless steel as a viable alternative to plastics, worldstainless Secretary- General Tim Collins who hosted the webinar showcased real-world examples. The webinar demonstrated how stainless steel products can effectively compete with their plastic counterparts. With their low or zero maintenance requirements, stainless steel products offer a safe and sustainable future. Collins said; “Plastics have become an integral part of our lives, revolutionising various industries such as healthcare, packaging, and fast food. However, the dark side of our reliance on plastics has come to the forefront. With only 9% of waste plastics being recycled, a significant portion ends up in landfills, posing a severe threat to our environment.” “Moreover, humans ingest an average of 18kg of microplastics throughout their lifetimes, highlighting the extent of plastic pollution. As governments finally recognise the gravity of the global plastics legacy, an alternative material is emerging as a solution; namely stainless steel!” The reason for this is that stainless steel possesses several features that make it a compelling alternative to Worldstainless recently hosted a fascinating webinar that pitted two ‘foes’ against each other and where stainless steel scored a knockout! It’s the age old debate fight between plastic and stainless steel and here at Sassda, we’ve always known the obvious answer to this question!
plastics. Firstly, stainless steel products can be cleaned and reused numerous times, reducing product costs over an acceptable number of reuses. This not only saves money but also minimises waste, mitigating the environmental impact associated with disposable plastics. Hygiene is another crucial factor where stainless steel outshines plastics. Unlike plastics, stainless steel has no discernible impact or harm on living creatures, foodstuffs, or beverages. This makes it an ideal choice for applications in healthcare, where safety and cleanliness are paramount. In addition, stainless steel boasts an impressive recycling rate, with 96% of end-of-life stainless steel being recycled to create new stainless steel products. This significantly reduces the environmental footprint of stainless steel and promotes a circular economy. Compared to other man made materials, stainless steel stands out as one of the most environmentally friendly options. The rise of stainless steel as an alternative material comes at a crucial time. Governments and industries are beginning to recognise the urgent need for sustainable solutions to combat plastic pollution. Stainless steel offers a compelling alternative, with its reusable nature, hygienic properties, and impressive recycling capabilities. Collins added; “As we confront the detrimental legacy
of plastics, it is crucial to embrace materials that promote environmental responsibility and long-term sustainability. Stainless
steel is poised to play a pivotal role in this transition, offering a cleaner, safer, and more sustainable future for generations to come”.
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market intelligence
State of the Stainless Steel Nation
I n his latest ‘view from the top’ Sassda Executive Director Michel Basson delves into the persistent issue of volatility within the various aspects of the South African economy. From fluctuating material prices and global supply disruptions to unpredictable local electricity supply, our State of the Stainless Steel Nation analysis examines how these uncertainties are creating a uniquely challenging set of circumstances for local stainless steel players… 1. How would you categorise the performance of the South African stainless steel sector in the last year? What is the state of the market at present? As reported earlier this year, there was an unexpected increase in the use of stainless steel in 2021, locally as well as globally. We ascribe this to two influences. Keeping in mind that stainless steel is used in applications where cleanability, hygiene, and corrosion protection are required, many projects that were put on hold during the pandemic had to go ahead in 2021 as a matter of urgency. As such, the increased use of stainless steel can be seen as the completion of many projects on temporary hold. On the other hand, many distributors started to replenish stock items as the expectations of market activity increased in 2021. It, therefore, did not come as a huge surprise when there was a lower demand for stainless steel in 2022 across the globe. The geographic markets of Europe and Africa
saw a decrease in growth from a spectacular 18% in 2021 to a growth of less than 2% in 2022. In a sense, it was a period of consolidation, and the use of stainless steel was further dampened due to the spike in nickel prices in Quarter 2 of 2022. The uncertainty around electricity supply reached unknown levels in the latter part of the year with a serious impact on the manufacturing capacity of our members. This meant that any stainless steel that moved in the local value chain, moved at a snail’s pace. 2. Please give some other meaningful stats relating to how the industry has performed? The infographic on the next page shows some of the statistics that Sassda gathers and processes. In this case, we compare the apparent local consumption in the period June 2021 to May 2022 to the reported consumption for the 12 months from June 2022 to May 2023. The upper right block indicates the change in local production which has reduced by 35%. It should be understood that the local use of stainless steel flat products is small in comparison with the total capacity of the mill, meaning that most of the production is intended for the export market. The limitations on the volumes that can be exported to Europe are showing their impact when the upper left block is studied where exports declined by 48%. Imports also slowed for various reasons, including the requirement for 100% local content on infrastructure
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programmes, as well as the exchange rate. This means that nett exports (exports minus imports) also reduced by 53%. Should nett exports be subtracted from the total production the answer yields the apparent local consumption for the period being investigated. From this graphic, it can be deduced that the apparent local consumption of stainless steel has increased when compared to the previous 12 months. This is very encouraging although it may be a bit early to start any celebrations. The Reserve Bank showed that after contracting by a revised 1,1% in the fourth quarter of 2022, real gross domestic product (GDP) edged higher in the first quarter of 2023
(January - March), expanding by an estimated 0,4%. The Sassda infographic indicates an apparent growth rate that far exceeds the country’s GDP growth and this is regarded as a strong positive indicator for our industry. Sassda members are also more positive albeit that our 3-month forecast based on member confidence still remains below or at 50%. This is illustrated by our monthly measurement of member confidence below. Members were fairly confident during the winter of 2022, but this confidence started to taper off in the last quarter which can be mainly attributed to the levels of loadshedding during that period combined with the uncertainty regarding the future state of electricity supply.
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The new year started with an index of more than 50%, but the effects of Eskom’s continued woes, the sudden slump in the exchange rate and increased interest rates pushed confidence levels down to 32%, which is lower than even during the dark days of the pandemic. It is therefore encouraging to see that members have once again increased confidence in the future of our industry. We hope this trend will continue.
of competition in a market, rather than an investigation of specific conduct by any particular firm. Sassda and its members adhere to a strict code of conduct regarding competitive behaviour, and it would be a surprise should the findings of the commission implicate serious anti-competitive behaviour in the stainless steel sector. 4. What are the biggest challenges facing the local stainless steel sector in the next 12 months, both global and local? Volatility remains one of our biggest challenges. Whether that is the volatility in material prices, in global supply and logistics, or volatile local uncertainty in electricity supply. The volatility in our environment causes instability in the value chain and this impacts heavily on the effectiveness of the value chain. There is not much Sassda and the local industry can do to influence global stainless steel supply, logistics, and prices. There is also not much that the South African stainless steel sector can do to improve the current issues in Europe that are placing a damper on exports to Europe. With exchange rates against any importation of stainless steel products, it can be an opportune time to fast track localisation and stimulate local demand for locally made products. We support and try to facilitate our members’ efforts to diversify, increase productivity, and the innovative use of the capacities and skills available to the South African industry. In short, Sassda and its members understand very well that evolving and constant organisational change remains key to the survival of the industry sector. 5. What are the key global and local sectors that have the greatest potential to drive demand for South African stainless steel and what role does the renewed interest in the concept of localisation by government have to play in this regard? Localisation is the key ingredient when the future growth of the stainless steel industry is discussed. However, it is important to understand what Sassda means with the term “localisation”. In this context, localisation means that previously imported products will be replaced with similar or better products that are locally made competitively and sustainably. Sassda believes that competitive and sustainable localisation will lead to economic growth, improved value chain performance, and the creation of meaningful jobs. It can also be instrumental in breaking the chain of poverty that holds nearly half of our population captive. A well developed local supply chain of specific stainless steel products can be extended to the export market and
‘It is important to understand what Sassda means with the term
“localisation”. Localisation means in this context that previously imported products will be replaced with similar or better
products that are locally made competitively and sustainably
3. The South African stainless steel sector is currently under review from various quarters namely the: i. Steel Master Plan and the ii. Competition Commission’s Steel Industry Review. What is Sassda’s role in each of these and what is the current status of each? Sassda has been part of the Steel Master Plan since its inception. Sassda officially forms part of the Local Demand Committee and has submitted initiatives on the localisation of beer kegs, cutlery, and hollowware. These initiatives are active and currently in process with a good prospects for success. It is important to note that the stainless steel sector is a small component of the overall South African steel industry. It can therefore be said, with some pride, that our sector is punching above its weight in the Steel Master Plan rollout. This should also be considered when the results of the current Competition Commission review into the steel industry are published. In 2014, the South African steel industry was ranked 19th in terms of global crude steel production and was the largest producer on the African continent, producing more than half of the continent’s steel output. In 2021, South Africa was ranked as the 32nd largest crude steel producer in the world, with an output of 5 Mt. This indicates that South Africa’s competitiveness in the production and supply of steel has been declining. The Steel Industry Inquiry was established in terms of Chapter 4A of the Competition Act No. 89 of 1998 and will examine whether or not there are any features or a combination of features in its value chain that impede, distort, or restrict competition in the South African steel industry. It is also worth noting that a “market inquiry” is a general investigation into the state, nature, and form
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will be able to compete globally in terms of price and quality. It has also been identified that the biggest potential export market would be the one closest to our country, Africa. South Africa has expertise in many areas that have lucrative market potential in Africa. Healthcare and medical equipment, water treatment and storage, agricultural and agri-processing equipment, food and beverage, pharmaceutical, mining, as well as general processing plant and equipment jump to mind when thinking of sectors that can stimulate local and export demand. Africa offers endless market potential, but it remains imperative that a strong and competitive industry be built on the back of intensive localisation. It is also foreseen that a strong and vibrant industry will stem the outflow of intellectual property, skills, and capacity from South Africa and offer opportunities to young professionals and entrepreneurs. 6. How has Sassda evolved against the backdrop of unprecedented local and global challenges that have faced, and continue to face, its members? There was an evolution in the way that Sassda does things even before the pandemic forced change on industry and the community. It remains critical for Sassda to be accessible to members, the industry, and our partners to create awareness and promote the use of stainless steel in South Africa. For example, we have made our products accessible by turning all the Sassda official training programmes into world-class products that can be accessed by anyone globally via our virtual classroom settings. Most of our member meetings have been accessible online since 2019. This intervention allowed Sassda
unparalleled access to industries and sectors we could not penetrate before. However, Sassda has also added new value in the way it intervenes on behalf of members when engaging with government. As an association our lobbying resulted in alleviating the industrial clampdown during COVID-19 by gaining permission to open up the stainless steel industry to a 50% level compared to the 30% allowed for other industries. Another example would be when Sassda made submissions to the dtic regarding the ban on the exportation of scrap metals in 2022. The submission and communication with government resulted in the removal of stainless steel from the metals included in the Bill. Sassda is constantly changing, and we try to keep ahead of the industry in terms of early adaption to circumstances to lead the way. Sassda is embarking on a drive to create more capacity within the association to be able to provide insight and services to members to facilitate change and in time adapt to new trends and potential markets. 7. What are some of the key projects/initiatives/ programmes that Sassda will continue to champion in 2023? Sassda cannot afford to be reactive to member and industry needs. The association has a strategic responsibility to lead and be the official and relevant mouthpiece of the local value chain. Sassda is currently in the process of upgrading all training manuals and presentations to reflect accurate and up-to-date information. This process is also important as new technology such as laser welding is becoming more popular in our industry and needs to be included in our training products. While we hope to keep on improving our products, services, and the delivery thereof, we will maintain our efforts to lobby the government on issues that impact our members and their future. It is important to mention that our lobbying process with government would never be negative. Our submissions contain statistics and data to support our view, but always remain flexible and open to alternatives towards a pragmatic solution. Sassda prefers to be a constructive partner towards a better South Africa. The current localisation drives active in the Steel Market Plan are reaching critical milestones and will continue to receive our undivided focus. Sassda has been involved in getting stainless steel written into the national standards for roofing, cladding, and road safety equipment such as road barriers. We are embarking on a mission to get 3CR12 included in any future specifications for Eskom transmission towers as well as rural emergency bridges that are currently under discussion.
Michel Basson Sassda Executive Director
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demand drivers
SA rail industry strongly advised to embrace stainless steel amidst crisis
I n response to this critical situation, Sassda member Columbus Stainless is taking significant strides to promote the use of stainless steel in the struggling rail sector. With the urgent need to revitalise the rail network, the company is actively bridging the knowledge gap among engineers and industry professionals. Columbus Market Development Manager Lerato Mashigo says; “Reviving our once proudly South African rail freight South Africa’s once proud 22 000km rail network, which historically accounted for 80% of Africa’s total rail infrastructure, is currently grappling with a dire crisis, which includes vandalism and the theft of existing infrastructure.
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network is of special significance, not only because it can streamline the stainless steel industry’s import and exports supply chains but also because it serves as a key demand sector for the supply of local stainless steel into strategic rail projects.” Mashigo also emphasises the vital role of engineers
and the need for them to be equipped with specialised knowledge of stainless steel for rail applications to allow for
gained considerable traction in the US market and played a pivotal role in the South African coal wagon industry, thanks to its exceptional corrosion (abrasion) resistance and impact strength. During the overview of the advantages of using
the selection of the right materials. The goal is therefore to cultivate a knowledgeable industry that recognises the inherent value of stainless steel and other viable alternatives.
stainless steel in rail applications, the all-women team from Columbus Stainless delved into the various families of stainless steel, providing practical examples of its superior performance compared to mild steel. Rossouw points out, “3CR12 stainless steel has proven highly successful in coal handling applications, lasting over 30 years (and counting) without the need for additional maintenance or coating. In contrast, coal units made of mild steel require regular maintenance and coating, leading to frequent replacements.” Minimal maintenance maximum benefits This in turn highlights the significant advantage of stainless steel in terms of Life Cycle Costing, dispelling the common misperception around the upfront cost of stainless steel and the fact that mild steel is chosen over stainless steel based solely on initial cost.
She explains; “In light of this, we have identified a unique opportunity to advocate for the adoption of stainless steel in the rail sector by engaging with industry professionals and members of the South African Society of Railway Engineering (SASRE). We aim to provide tangible demonstrations of the advantages and benefits associated with using stainless steel in various rail-related projects.” Significant investment required Speaking at a recent SASRE event, Mashigo, together with colleague Columbus Stainless Senior TCS & Product Quality Manager Helena Rossouw, emphasised the significance of investing in rail infrastructure. They proudly highlighted the local success and international recognition earned by the 3CR12 stainless steel grade, particularly in the rail and automotive industries. This robust stainless steel variant has
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“Many people tend to focus on the initial cost of the material without fully considering the associated maintenance and downtime expenses. Stainless steel emerges as a more economical choice when life cycle costs are thoroughly considered,” explains Rossouw. To vividly illustrate the point, the presentation included a diagram that underscored the hidden costs incurred due to maintenance and production loss caused by downtime with mild steel. In stark contrast, stainless steel, with its self-repairing passive layer, eliminates the need for active maintenance and re-coating, making it a far more viable option in the long run. Therefore, despite initial cost perceptions, stainless steel’s remarkable durability, corrosion resistance, and impact resistance position it as the superior choice for various rail applications. Furthermore, different grades of stainless steel cater to specific needs, making it an ideal material for transporting different media. For example, 304 stainless steel proves suitable for transporting water, while 316 stainless steel excels in transporting more corrosive media. A critical juncture The collaboration between Columbus Stainless and SASRE marks a significant turning point for South Africa’s rail industry which is at a critical juncture, facing challenges that demand immediate attention and innovative solutions. Against this backdrop, Sassda Executive Director Michel Basson emphasises the long-term viability of stainless steel in South Africa’s flagging rail sector. “Amid South Africa’s pressing need to revive its ailing rail network, the rail industry’s collaboration with organisations like Columbus Stainless is considered a crucial step toward identifying sustainable solutions. “Intensifying the awareness of the benefits of stainless
steel will foster the growth of a knowledgeable and forward- looking rail industry. With a steadfast focus on responsible and enduring investments, our industry can play a pivotal role in creating a resilient rail network poised to serve the country for generations to come” he concludes.
Life Cycle Costing = Net present value (capital cost) + Operations cost + Maintenance cost + Replacement cost – Residual value
Additional Reading
1. www.citizen.co.za/news/r60-billion-crumbling-rail- network 2. https://businesstech.co.za/news/government/676093/ ramaphosa-turns-his-attention-to-south-africas- other-state-owned-crisis 3 www.reuters.com/world/africa/kumba-iron-ore-cuts- output-forecast-south-africa-rail-crisis-2023-02-21 4. www.dailymaverick.co.za/article/2021-04-20-what- broke-south-african-rail-and-can-it-be-fixed 5. https://www.transport.gov.za/rail#:~:text=Welcome%20 to%20Rail%20Branch,staff%20complement%20of%20 18%20207
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africa profile
Rwanda on the rise
I n addition, the country has undergone significant improvements over the years, making it one of the fastest- growing nations in Africa with an annual growth rate of 7.5% since 2007. With an unemployment rate of 13.3%, the country enjoys a GDP of $11-Billion (Source: World Bank) and a B+ stable rating. Overall, Rwanda is a low-risk region with the lowest debt ratio in the region as well as stable credit ratings and a solid currency. It’s also one of the safest countries for solo travellers, making it an ideal investment destination. Rwanda’s economy is particularly business-friendly, with an impressive ranking of second for ease of doing business in Africa and first for government transparency (Source: Rwanda Development Board July 2023) Rwanda is a country with a promising future, as it pursues various capital projects aimed at driving growth and prosperity. With a population of 13 million, of which the vast majority below the age of 25, its economy has the opportunity to benifit significant future consumer spending income.
Rwanda is also IT-ready, boasting a 97% 4G LTE network coverage and ranking first in the East African Community for network readiness. Additionally, it ranks 5th in Africa and has more than 7 000 km of internet fibre, making it an ideal investment hub. Ease of doing business R wanda has developed an investment-friendly atmosphere by implementing business-oriented rules, supporting priority sectors, simplifying processes, and expressing its commitment to foreign proprietorship, making the country an attractive destination for investors. The country also opens access to African and global markets through rigorous free trade agreements and serves neighbouring markets such as Uganda, Burundi, Tanzania, and the DRC through regional connections. Investors looking to invest in Rwanda can enjoy diverse incentives through a new Investment code. An international company that invests $10-Million or more and sets up its headquarters or regional office in Rwanda, is eligible for a preferential corporate income tax rate of 0%. Investors operating in mass transport, energy production, manufacturing, ICT & e-mobility are also eligible for a preferential corporate income tax rate of 15%.
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Registered investors who invest an equivalent of $50-Million and contribute at least 30% of equity are eligible for a corporate income tax holiday of seven years. Export incentives also exist, based on meeting export threshold. Talent attraction and immigration incentives, include a two-year entrepreneurship visa for start-ups, a two-year talent visa for qualifying international students, and the option for an investor who invests $250 000 to recruit three foreign employees without demonstrating that their skills are lacking. Investors looking to benefit from attractive incentives in the construction, general manufacturing, and agro- processing industries can also explore fiscal and non- fiscal incentives. Investment opportunities in Rwanda • SUSTAINABILITY - The Kigali Green City Project is a sustainable development for middle-income residents and comprises green spaces, efficient energy, local sourcing, and circular living. The 16-ha pilot size is expected to start in mid-2023, while the whole city is estimated to be 600ha. The project will consist of 680 housing units which require an estimated investment of $86-Million, generating sales revenue and commercial rentals such as shopping malls and leisure facilities. Investors can benefit from the fact that the feasibility study has been completed in Sept 2021. Additionally, the project secured EUR40-Million in funding from the government of Germany through the KFW Development Bank, with detailed designs set to be completed in the second half of 2023.
Sustainable packaging is another important investment opportunity in Rwanda. The project involves investing in recycling plants and sustainable packaging plants to create carton and biomaterial based sustainable packaging solutions. Various investments are available depending on the size of the project. The Plastic Recycling Plant is estimated to generate $14-Million in annual revenue, using local waste collection systems. The Paper Recycling Plant is expected to generate $15-Million in annual revenue and a Biomaterial-Based Sustainable Packaging Plant is estimated to yield $15-Million in revenue per annum. A Carton Packaging Plant for branded tea exports is another initial opportunity to target 5 000 TPA paper cartons and tea bags estimated to generate $15-Million in revenue per annum. This project is a fully private investment. • Rwanda is set to see exciting developments in the AGRICULTURAL AND AGRO-PROCESSING sectors, with projects such as the Gabiro Agro Business Hub and the Gako Meat Project. The former will cover around 10 000 hectares of fully irrigated land and offer lease opportunities to investors, with a focus on job creation and improving food security through increased crop production. Meanwhile, the Gako Meat Project is a substantial operation spanning 5 919 hectares and sets out to modernise the agriculture industry in the country. To complete the project, an investment of $63-Million will be required.
• KIGALI INNOVATION CITY is a 61-hectare mixed-use
development project that aims to build Rwanda as a pan-African knowledge economy. The city combines university campuses, research and development facilities, Grade A office spaces, student housing, science and technology museums, retail, and hospitality. The city has already attracted a community of highly skilled students from more than 40 African countries. Currently, project development activities are ongoing, including the design and construction of the first mixed-use building set to be completed in 2024. The city has already secured three anchor
tenants, including Carnegie Mellon University - Africa.
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• In the HEALTH sector, Rwanda presents a wealth of opportunities for investment, including imaging clinics, equipment manufacturing, and medical consumables manufacturing. The country has a strong existing healthcare system that covers 13 million people, with a multi-layered administrative structure overseen by the Ministry of Health and the Rwanda Biomedical Centre. • Rwanda’s MINING industry is also primed for investment, with the country seeking to add value to its mineral output through processing. While the country already has a tin smelter, a gold refinery and a tantalum refinery under construction, there are numerous opportunities to establish processing plants for other minerals such as tungsten, lithium, and gemstones. • Rwanda’s CONSTRUCTION industry has shown steady growth of 9% over the past decade and is expected to continue on an upward trend with a projected growth of 10% over the next decade. This growth will primarily be driven by major commercial construction projects such as the New Bugsera Airport, Kigali Innovation City, Kigali Green City, and major affordable housing
projects. Investors looking for opportunities within the construction sector can explore investment in the low exploitation and processing of industrial materials necessary to meet the demand for construction materials such as tiles, slab sculptures, paints, bricks, and concrete aggregates.
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Frank Gehry's architecture is unrivalled In its simple complexity. The Louis Vuitton foundation in the Bois Ou Boulogne. Paris is one of the? most remarkable feats of architectural engineering. What made it possible was the use of structural, highcs1rength duplex stainless steel to support the unique glass salts. As you can see, stainless steel doesn't have to& b<lght to& b<llllant!
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technical case study
The ‘acid test’ when it comes to effective passivation
Post-fabrication treatment of stainless steel products, or damaged and contaminated surfaces remains critical to ensure that the material lives up to customer expectations. Stainless steel surfaces remain in pristine condition due to a very thin, tenacious chrome-oxide film that develops uniformly and continues when the material is exposed to oxygen in the environment. This film is stable and, most importantly, passive.
T he passivity makes stainless steel surfaces inert and, as such, it does not readily react with the environment, even when in a corrosive environment. This property comes from the chrome content in the material since the more chrome stainless steel contains, the stronger the passivity and the corrosion resistance. The passive film is not a coating that needs to be maintained. It forms naturally and all it requires to remain strong, is unimpeded access to oxygen, simply meaning that the surfaces must be kept clean. Pickle we must When stainless steel is produced at a mill and ready for dispatch, the passive film will be in optimum condition and pristine. However, along the process of the manufacturing value chain, a lot of things will happen to the material that will damage and impair the passive layer. This includes multiple instances of transport and handling, exposure to ferrous and carbonaceous contamination; exposure to polluted atmospheres and the
activities of fabrication such as cutting and forming. It is important
to treat the surfaces after fabrication to ensure the removal of all embedded iron and metallic debris and dirt. This will allow chrome to have free access to oxygen to build an effective passive film. Some fabrication activities do not only impact the integrity of the passive film but also affect the material underneath the passive film and close to the surface. Heat treatment and welding are such examples. At high temperatures, heat oxide layers will form near the surface of the material. These layers are chrome depleted and cannot build and sustain a protective passive film. It needs to be removed to expose fresh material that can form a proper passive film. Heat scale and most other surface defects can be removed by either mechanical methods or chemical
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technical case study
methods. However, tests have indicated that chemical methods yield better results. It has been proven that the pickling process renders the most corrosion-resistant surface of all treatment methods. Pickling normally refers to an acid mixture containing nitric acid and hydrofluoric acid that will remove the oxide scale and the underlying chromium-depleted layer. These acid mixtures are hazardous and must be handled with due care and disposed of correctly. As pickling would dissolve the stainless steel top surface, it must be carefully executed to the correct parameters. Pickling can be performed by immersing the stainless steel part in a bath or by sprayingt the surface. Pickling products can also be applied locally in gel or paste forms. Irrespective of how pickling is conducted, it remains a necessary and critical step in surface restoration and ensuring the optimum performance of components and products in harsh environments. To passivate or not to passivate? T he passive film forms naturally if there is unimpeded access to oxygen in clean and dry conditions. Pickling produces clean surfaces with a dull grey, matte finish that passivates spontaneously in the correct conditions. According to studies done by Outokumpu chemical passivation is rarely needed for improved corrosion resistance and is not required if the stainless steel has been properly pickled. On the other hand, passivation is an effective way to clean stainless steel that has not been pickled. Chrome to the rescue T he answer to whether to passivate therefore lies in the conditions for natural passivation, the nature of the application, and the requirements of the end-user. The natural passivation process starts almost immediately once chemical contact is established between the environmental oxygen and the chrome contained in the material. It is worth noting that the more chrome, the faster and stronger the passive layer will develop. It is also important to understand that all chemical processes on stainless steel such as cleaning, pickling and passivation, are governed by international standards.
The standard that the South African industry adheres to in terms of cleaning, descaling and passivation of stainless steel parts, equipment and systems is ASTM A380/A380M-13. This standard allows for nitric acid based, as well as citric acid based methods for cleaning and passivation of stainless steel. The standards ASTM A967 and AMS 2700 states citric and nitric acid passivation to be effective for stainless steel parts. Citric acid passivation Citric acid passivation is the newer of the two processes and is also less used in the local industry. This technique was originally developed by the Coors Brewing Company to passivate the internal surfaces of beer kegs. Since citric acid is generally recognised as safe by the American FDA, it can be used safely in food and beverage applications. Citric acid is the same non-toxic, biodegradable natural acid found in citrus fruits, making its use in passivation an environmentally friendly alternative to nitric acid. It also has fewer handling concerns than nitric acid. Unlike nitric acid, citric acid can be disposed of with minimal requirement of waste treatment. Citric acid can passivate a wider variety of stainless steel alloys than nitric acid passivation. A citric acid passivation bath also takes far less time than nitric acid, speeding up the cleaning process considerably. However, for all these benefits, citric acid passivation is considerably more expensive, which is why many choose nitric acid. According to ASTM A967, there are five different citric acid passivation methods: • Citric 1: This solution has a strength of 4-10 w% citric acid, at a temperature of 60- 70 C and 4 minutes minimum exposure time. • Citric 2 : This solution has a strength of 4-10 w% citric acid, at a temperature of 50- 60 C and 10 minutes minimum exposure time. • Citric 3: This solution has a strength of 4-10 w% citric acid, at a temperature of 20- 50 C and 20 minutes minimum exposure time.
• Citric 4: This covers other combinations of temperature, time, and concentration of citric acid with or without chemicals to enhance cleaning, accelerants, or inhibitors capable of producing parts that pass the specified test requirements. • Citric 5: This covers other combinations of temperature, time, and concentration of citric acid with or without chemicals to enhance cleaning, accelerants, or inhibitors
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