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.