| Tue 7 May 2002, 0:00 | | ALPHA'S DUDFIELD KILN TO BE MODERNISED |
|
Johannesburg - Tuesday May 7, 2002
Major cement manufacturer, Alpha Limited is to invest R340-million over a period of three years in efficiency and environmentally focused capital projects. This follows the successful conclusion of its three year initiative - "Alpha 2000" - which focussed on enhancing profits with minimal capital investment.
The largest of these projects is the upgrading of the number 3 kiln at its Dudfield cement factory, near Lichtenburg in the North West province. The investment will significantly improve the kiln's efficiency and reduce dust emissions from the 24-year-old kiln to well within first world requirements.
Alpha, the second largest cement manufacturer in South Africa, is 54% owned by Holcim, one of the world's leading suppliers of cement, aggregates and concrete, and 46% by Aveng, the country's major construction, steel and cement group.
The Dudfield plant has three kilns, the oldest of which has already been mothballed. Following the new investment it is proposed that its second kiln will also be temporarily shut down and that Alpha will maximise the output from the modernised third kiln. The upgrade should result in Dudfield Kiln 3 increasing its production to 3 500 tons a day at a lower cost per ton. Any temporary shortfall for the Dudfield market will be supplied from Alpha's modern kiln at the Ulco cement factory near Kimberley in the Northern Cape.
An important benefit of the investment will be to enable Alpha to provide customers in the Dudfield market with more consistent cement as all product will now be produced from clinker from one modern kiln.
Commenting on the decision to go ahead with the investment Alpha's managing director, Mike Doyle said: "Having successfully concluded the largely capital expenditure free Alpha 2000 efficiency programme, the next step in our ongoing drive to lower costs was an in-depth capital expenditure optimisation study, carried out with assistance from Holcim last year.
"Among the issues examined were the likely growth of the domestic cement market, existing production capacities and methods of improving efficiencies and further reducing kiln dust emissions. Our three-year capital expenditure programme, which will be funded off the Alpha balance sheet, was based on the findings of that report."
Although the report concluded that the South African cementitious demand could grow by a less than exciting 1,7% per year for the next decade, Alpha took the decision to proceed based on potential returns from production rationalisation and greater efficiencies. "We have the opportunity to rationalise Alpha's clinker production and temporarily reduce the number of operating kilns from three to two. The economics are compelling," Mr Doyle said.
The investment at Dudfield will include replacing the planetary cooler with a grate cooler, tertiary air duct and in-line precalciner; replacing the kiln drive train and worn shell sections; upgrading the gas handling and raw milling system to meet the increased raw meal demand and replacing the existing electrofilter with a baghouse having improved dust emission control. Dust emission will be reduced to below 50 mg/Nm3, significantly within the South African legal limits, and well within first world requirements.
Carl Grim, chief executive of Aveng added that the investment was being made to ensure that Alpha remained not only competitive with the best cement producers in the world, but also manufactured cement in a way that will reduce the impact on the environment. "The benefits of this investment will reflect on the Aveng income statement for many years to come."
Please note:
Aveng Limited is a South African based group. It was listed on the JSE Securities Exchange SA in July 1999 and is aiming to be a globally competitive construction-related group focused principally on the developing world.
Its major businesses are
Construction :
Grinaker-LTA (100% held) is South Africa's largest construction company with particular expertise in providing construction services to the mining industry. Its operations extend throughout Africa and into the Middle East.
McConnell Dowell (63% interest) is listed on the Australian and New Zealand stock exchanges and provides specialised construction services to the energy sector. Its operations extend throughout Australia/New Zealand and into South East Asia.
Steel and Allied :
A cluster of steel centres and light manufacturing businesses which together make Aveng South Africa's largest domestic steel beneficiator/merchant. The two largest businesses are Trident Steel and Amalgamated Steele, both of which are 100% held by Aveng.
Activity is strategically balanced around servicing the construction, engineering and automotive sectors.
Cement :
Alpha is South Africa's second largest cement producer and its largest concrete manufacturer and aggregate producer. Aveng holds 46% of Alpha and the Swiss group Holcim, one of the world's leading suppliers of cement, aggregates and concrete, holds 54%.
Operations extend into southern Africa where Alpha operates a number of cement terminals. It has a controlling interest in Tanzania's largest cement manufacturer.
Aveng's objectives are to achieve
PE rating in the top three of the BCE sector
Long-term real ROE of 10%
Minimum 25% of earnings in hard currencies
Visit our website - www.aveng.co.za
ends
ISSUED BY: PENELOPE GRACIE INVESTOR RELATIONS
ON BEHALF OF: AVENG LIMITED
FURTHER INFORMATION: PENELOPE GRACIE
CONTACT: OFFICE +27 (11) 447-3301
MOBILE 082-55-77-444
Kind regards
PENELOPE
Penelope Gracie Investor Relations
Tel: +27 (11) 447-3301
Fax: +27 (11) 447-3319
Mobile: 082-55-77-444
e-mail: penelope@pgir.co.za
