Hulamin has been through a challenging period of transformation. It is now focused on realising its potential and delivering stronger, more sustainable returns.
The company, an aluminium semi-fabricator based in Pietermaritzburg, recently held an investor day to outline its strategic direction and operations for the future.
CEO Mark Gounder opened the session with a metaphor that framed the company’s journey: “We’ve stabilised the business and spent a substantial amount of capital over the past three to four years — close to R1.6bn — and the next step is to wake up the Sleeping Beauty and unlock value for our shareholders.”
Hulamin’s recovery and growth strategy is centred on improving operational efficiency, diversifying its product mix, and expanding its footprint locally and internationally. Gounder emphasised that the company is now transitioning from a stabilisation phase into an aggressive two-year plan aimed at further strengthening its position in the market. An important part of this transition is its investment in capital projects, particularly its market-driven wide-can body project, which has been rolled out in phases since 2023.
The first two phases have already been completed, with the final phase expected to conclude in 2025.
Gounder highlighted the considerable risks and challenges that came with the project, especially the need to shut down the plant for more than a month to complete the upgrades. Despite these challenges, the company has successfully commissioned the new facilities and is back on track.
“The foundation has been set. Now it’s about driving a culture of accountability and timely execution,” said Gounder.
Expanding and optimising export markets will be a central strategic focus for Hulamin over the next two years. While local demand for aluminium products, especially for cans, continues to grow, Gounder noted that about 40% of the company’s production is still directed towards international markets. Recognising that local tariff protection offers only short-term relief, Hulamin is shifting its focus towards building true global strength.
“We can’t solely rely on tariffs for our growth. We must focus on improving our global competitiveness,” he said.
In terms of output, Hulamin is targeting annual production of 200,000t by 2027, with about 60% dedicated to the can stream. This marks a meaningful step up from the current capacity of roughly 180,000t.
To support this expansion and protect margins, the company is also increasing its use of lower-cost input metal by boosting recycled content in its feedstock. Gounder said Hulamin aims to lift scrap utilisation to above 30% within the next two years, against 22% now.
With profitability still below acceptable levels and return on equity lagging well behind the cost of capital, CFO Pravashni Nirghin said the company has adopted a proactive stance on cost management, focusing on sustainable, long-term savings rather than short-term cuts. Hulamin is targeting a structural reduction of between R300m and R400m in its overall cost base, encompassing employment costs, procurement savings and improved plant efficiencies.
The foundation has been set. Now it’s about driving a culture of accountability and timely execution
— Mark Gounder
One of the biggest problems is the sharp rise in electricity tariffs, which continue to outpace inflation. To counter this, Hulamin is advancing several green energy initiatives — most notably wheeling arrangements, which allow the company to buy renewable power directly from independent producers, using Eskom’s grid as a transmission channel. This could reduce annual energy costs by R60m-R80m.
Hulamin’s shift towards cleaner energy is also a strategic move to ensure compliance with the EU’s carbon border adjustment mechanism, a new trade measure that places a carbon price on imported goods to match the cost of emissions faced by EU producers.
Gounder noted that while scope 1 emissions are unlikely to have a material impact, scope 2 — stemming largely from Eskom’s coal-based power — poses a greater challenge. “We’re on track with our wheeling initiatives, and it’s critical that we manage our energy requirements to mitigate the impact of scope 2,” he said.
Eskom provides about 45% of Hulamin’s power; gas accounts for the rest. Some of this gas flows through Sasol’s pipeline network from Mozambique, where production is expected to decline in the coming years. However, management is confident about its energy security. Gounder said the company is in discussions with alternative gas suppliers to diversify its sources, and as a last resort Hulamin can revert to more expensive liquefied petroleum gas (LPG) at a capital conversion cost of about R85m (LPG is a refined by-product of crude oil that can be sourced locally or imported).
Energy resilience is only one part of Hulamin’s broader strategy to reposition the business for higher margins and growth. The company is also refining its product mix to concentrate on higher-value segments. Gounder said Hulamin is particularly focused on the can-body market, which remains its core product.
“We’ve invested heavily in the can-body project, and this market is expected to expand at a rate of 4.8% per year.”
To meet this growing demand, South Africa’s four main can manufacturers — Nampak’s Bevcan division, GZ Industries, Kingsley Benoni and Golden Era — plan to increase their combined production capacity from roughly 107,000t to about 130,000t over the next two years. Hulamin now supplies up to 70,000t of can-body stock to the domestic market, leaving part of the additional requirement to be met elsewhere. Management is exploring whether some of the company’s existing can-end production — about 40,000t of the 50,000t produced are exported — can be redirected towards can-body manufacture to help fill the anticipated local shortfall and capture a larger share of this growth opportunity.
However, the company is also keen to diversify into the European and US markets, focusing on premium products such as heat-treated plates. Gounder noted: “Our strategy is to play in the European market with the highest-margin products and to continue to build partnerships with key customers there.”
On the issue of liquidity, Nirghin emphasised that the company had used working capital facilities, rather than long-term debt, to finance its capital expenditure over the past few years. While Hulamin’s net debt has increased by about 145% since 2022, this has been a necessary step to fund its extensive capital projects.
Hulamin plans to reduce its debt by focusing on supply chain financing and optimising its inventory management. “We are being very strategic with our capital projects and are looking at alternative financing options, such as off-balance-sheet financing, to improve liquidity,” said Nirghin.
The company’s growth prospects hinge on its ability to execute its ambitious two-year plan and unlock value for shareholders — a crucial task for a business still trading at just 25% of its book value. That will determine whether the long-slumbering “Sleeping Beauty” finally awakens.
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