More fizz...

Finweek English Edition - - LETTERS -

IN THE IN­TER­ESTS of fair and ac­cu­rate re­port­ing I’d like to take this op­por­tu­nity to set the record straight in re­la­tion to the Jan­uary 2011 re­port by Svet­lana Doneva that fea­tured our com­pany Afrox (20 Jan­uary 2011). The R97m in­vest­ment re­ferred to is, in fact, for a new air sep­a­ra­tion unit (ASU) in Pre­to­ria and not a CO plant, as stated. That was an­nounced via Sens at the end of last year. This ASU will, in the main, pro­duce oxy­gen, ni­tro­gen and ar­gon and is aimed pri­mar­ily at se­cur­ing longterm sup­ply for South Africa’s mer­chant mar­ket. The plant is ex­pected to come on stream in 2013.

We brought a new CO plant at Sa­sol­burg on­line in June last year that – at 250t/ day – will sup­ply cus­tomers across south­ern Africa, with the aim of se­cur­ing new mar­kets for Afrox.

Our in­vest­ment in cylin­der stocks is an on­go­ing pro­gramme to ser­vice the in­dus­trial, med­i­cal and con­sumer mar­kets and is stan­dard prac­tice for Afrox as the largest in­dus­trial gases and weld­ing prod­ucts busi­ness in sub-Sa­ha­ran Africa.

In De­cem­ber 2010 we an­nounced the MIG wire plant at Brits was to shut, in favour of more com­pet­i­tively priced im­ports; but we still re­tain our ca­pac­ity at Brits to man­u­fac­ture Vitemax, SA’s biggest sell­ing weld­ing elec­trode/rod brand.

Afrox has not – and has no in­ten­tion of – “ex­it­ing the weld­ing prod­ucts busi­ness” that ac­counts for a ma­jor slice of our rev­enues. We also don’t con­sider the clo­sure of the MIG wire plant to be “a tough and brave de­ci­sion” but a log­i­cal and nec­es­sary mea­sure to pro­tect share­holder value and mar­ket share in the face of cur­rent eco­nomic re­al­i­ties. Also, the prod­uct that will be im­ported as a re­sult of the MIG wire plant clo­sure is MIG wire and not “branded rods” as stated.

You also re­fer to our “in­creased man­u­fac­tur­ing ca­pac­ity” – which is a con­tra­dic­tion of what you pre­vi­ously stated in your re­port. The fact is that Afrox has de­creased its lo­cal ca­pac­ity to take ad­van­tage of the strength of the rand in a fiercely com­pet­i­tive mar­ket.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.