Hot-forge-based components manufacturer SP Metal Forgings curren- tly has a large contract to supply South African commercial vehicle manufacturers with more than 500 000 vehicle components a year, including drivetrain parts, the company reports.
SP Metal Forgings MD Ken Manners says this supply contract, coupled with another two, were all awarded within the past three years, each with contractual rights for renewal for at least another five years. He adds that the company has registered a yearly sales value of more than R300-million.
The local development and manufacturing of automotive components is the primary driving force behind the success of the company, earning it global success in securing major and sole contracts.
With factories in Uitenhage, in the Eastern Cape, and in Boksburg, Gauteng, the company manufactures a vast range of components for the automotive industry that include wheel, drivetrain, suspension, steering, exhaust and towing components for various vehicle models.
The company is the sole supplier of fully machined wheel hubs for two of the biggest vehicle manufacturers in the world. “These two vehicle builds, both US-based, buy about 2.3-million components every year from our Uitenhage works,” he says, adding that 75% of components made at the Uitenhage factory are expor- ted, while 50% of components produced at the Boksburg factory are exported.
Further, SP Metal Forgings supplies drivetrain components to another three US-based vehicle manufacturers, totalling about 500 000 components yearly.
Moreover, for 15 years, a significant portion of the European towing industry’s components has been produced by SP Metal Forgings, with these components becoming increasingly technologically demanding. “We also supply large quantities of similar towing devices to the South African market,” he says.
The company won another contract, awarded in May 2014, with an initial value of about R7-million yearly, from a glo-bal Tier 1 US-based company. “This new customer has placed orders for specialised steering components for commercial-vehicle applications. These initial orders form part of a larger strategic sourcing initiative on the part of the customer,” says Manners, adding that he is confident that this contract- ual agreement can potentially lead to considerably greater volumes of production.
SP Metal Forgings has invested in new machining equipment, expanded its forging capacities and more than doubled its personnel to over 800 people.
Manners says the company has the benefit of high-volume supply contracts, enabling the company to constantly invest in enhanced technologies and improvement initiatives. “We are, by implication, able to adopt and transfer these benefits to the products we supply to our highly valued South African customers.”
The Uitenhage branch focuses primarily on manufacturing original-equipment manufacturer components in high volumes, with the factory equipment suited to creating large forgings of between 3 kg and 15 kg.
The Boksburg branch is more suited to manufacturing smaller, more technologically demanding components such as complex ‘goose neck’ towbars and steering and suspension parts.
SP Metal Forgings exports components to the US, Mexico, France, Germany, Spain, Belgium, Holland and the UK.
The company has also exten- sively developed in-house tool- making, heat-treating and laboratory capabilities. It also has a supply agreement with multinational steel manufacturing corporation ArcelorMittal South Africa for the development and reliable supply of technologi- cally demanding steels, which combine well with forging technology, to produce components at competitive prices.
“We have a high technological entry barrier, developed over about 40 years, of gaining specific competence in our sector. Combined with decades of massive infrastructural investment, this cannot be easily replicated anywhere in the world,” says Manners.
“We place great importance on strict adherence to defined systems, controls and procedures, focusing heavily on using fail-safe quality assurance systems like poke-yoke devices, automatic gauging systems and statistical process control.
The company is ISO 9000, TS16949- and ISO 14000-certified.
Macroeconomic volatility, particularly collective labour uncertainty, and exchange rates are the major obstacles affecting the automotive components industry, says Manners.
Another problem area is employee skills in the aspects of trade, and supervisory or managerial competence.
“Government’s regulatory labour law environment and poor service delivery for the private sector are suffocating business development and discouraging employment,” he explains.
Manners adds that SP Metal Forgings has overcome these obstacles with “great difficulty”.
“We have limited ability to influence the greater econ- omic environment; however, we passionately participate in industry improvement lobbies and associations.”
The company focuses on the extensive training and skills improvement of its employees. “It is an involved process; however, we have had considerable success in training our employees.
“The schooling system’s lack of technical focus poses a challenge for the industry but we hope to bridge the gap with our skills training programmes. Our ultimate goal is to empower our staff with the skills to compete on a global level,” concludes Manners.