Rheem South Africa – 100% black-owned manufacturer of industrial packaging – is implementing a growth strategy to increase its presence throughout the African continent. One manifestation of this strategy is the establishment of a new steel drum line – representing a cool R50-million investment.
A visit to see the new steel drum line at Rheem’s Prospecton (KwaZulu-Natal) operation – just three weeks ahead of its official opening at the end of February – uncovers intense activity as commissioning reaches its final stages.
Conducting the guided tour is group technical director, David Davies, who explains that the drum line itself accounted for a R40-million outlay, with a further R10-million being spent on buildings and infrastructure. Erected alongside the existing drum line, the new building is 120m long and 25m wide, providing 3 000m2 of pristine space with gleaming epoxy-coated floors and boasting all-natural lighting.
At the heart of this project is a fully-automatic line supplied by Belgian company, Remy International, whose core business for the past seven decades has been the design of equipment specifically for steel drum production.
The first unit we inspect is a Federal welder where the body-forming operation begins by welding steel sheets into the basic drum shape. This is followed by complex flanging, beading, corrugating, seaming and tapering processes. Along the way, leak detection is another vital interlude, before drums arrive at the body finishing section that includes drum rotating devices and painting in specially-designed booths. After painting, drums enter a temperature-controlled curing process in a 35-metre long oven. When they emerge at the far end of oven they’re taken up by a sophisticated conveying system, inkjet coded for identification and tracking purposes, subjected where necessary to colourful printing of corporate logos, and placed on conveyors for automated transfer to loading bays.
Aside from the painting booths and the oven (supplied by KBA), the entire line is impeccably engineered by Remy International.
It’s truly impressive!
Scheduled for mid-year installation is a 120-ton hydraulic inclined press with forming dies to produce drum tops and bottoms, along with precision opening and closing tooling to insert screw closures for the lids. This will be complemented by an automatic curling and sealing compound dispensing unit to assist in sealing tops and bottoms to drum shells.
As we make our way through the plant – with engineers working flat out on every section of the embryonic line – David Davies emphasises a number of important aspects, especially highlighting the startling differences between the old and the new lines.
‘With the new line, we’ll double our production throughput on a single shift,’ he remarks. ‘This investment automates our production process, reduces our maintenance costs, improves reliability of supply, and allows us enough capacity to enter new markets on the African continent and beyond.’
Also noteworthy from a quality point of view is the fact that drums produced on the new line are virtually ‘untouched by human hand’.
‘We’ve done everything possible to ensure minimal handling,’ David continues. ‘In addition, there’s no metal-to-metal contact – all conveyor parts are nylon-coated so that drums remain undamaged and scratch-free.’
As a customer service, Rheem maintains a two-week supply of finished drums, warehoused to meet customers’ just-in-time delivery requirements.
Drums are stored on-site on fully-enclosed trailers (each with a capacity of 300 drums) ready for delivery when required.
‘These trailers act as mobile warehouses,’ David explains. ‘They’re fully covered to protect drums from the weather; when required they’re simply hooked up and driven off to the customers.’
Rheem South Africa undoubtedly counts among the country’s leading privately-owned industrial packaging companies. For more than four decades, since its inception in 1967, Rheem has enjoyed an enviably solid business, manufacturing steel drums and other tinplate packaging for the petroleum, paint, resin, mining, adhesive, inks, coatings and chemical markets, with customers throughout South Africa and further afield – for instance in Zimbabwe, Namibia and Democratic Republic of Congo.
Aside from the obvious benefits of supplying customers with immaculate steel drums, deeper reasons behind this investment are articulated by executive chairman, Lwazi Dhlomo, whose primary aim is a JSE listing by 2015.
‘Among strategies that will help us to realise this vision are revenue stream diversification, a continental and global market presence, world-class manufacturing capabilities – hence the need for this investment – and reliability of supply to our customers,’ Lwazi comments.
He sees this major investment as allowing the company to enter new markets on the African continent and beyond.’
According to Rheem, metal drums remain the best suited method for transporting hazardous and non-hazardous materials.
The company supplies cylindrical and tapered (conical) drums and pails, ranging in capacity from 36 to 235 litres – either open head (removable lid) or tight head.
They’re produced from cold rolled or galvanised steel, supplied by Arcelor Mittal, in gauges between 0.50mm and 1.2mm. Metal welds are triple seamed. Drums comply with UN performance requirements and can be supplied with special linings for specific product protection.
An important association is Rheem’s membership of Drumnet, a European-based association of global drum manufacturers, allowing Rheem to remain at the forefront of international benchmarks in technology, product design and quality. And, underlying its stance as a responsible corporate citizen, Rheem is a founder member of SAICRA (South African Industrial Container Reconditioners Association).
Staff and BEE matters
Moving away from the company’s high-tech manufacturing facilities, the focus moves to business matters.
It’s good to learn that although this project automates an existing manufacturing process, there have been no retrenchments.
‘We’re proud of the partnership with our workforce and the union during the achievement of this major milestone in our history,’ says Lwazi. ‘No permanent employees lost jobs; instead the project has ensured continued employment for over 400 people.’
Operators of the old line were invited to apply for positions on the new line. During installation and commissioning, successful applicants were trained to operate the new line and gained vital skills from visiting European artisans. Unsuccessful applicants were redeployed elsewhere in the group.
Another direct result has been the creation of a new position for a business development director to focus on opportunities in African markets. This position has been filled by Morgan Kristen who joins Rheem with a wealth of experience in this area.
Rheem’s primary owner is OD Investments – a black-owned investment consortium, formed by Lwazi’s father, the late Dr Oscar Dhlomo (who was Rheem’s non-executive chairman).
It was in 2001 that this Dhlomo-led investment consortium, including Brait Private Equity, acquired Rheem’s issued share capital from previous owner, Highveld Steel & Vanadium. Two years later, however, Rheem bought back the shares held by Brait, allowing OD Investments to increase its stake in the company, a move that set the company on its growth path as an independent company, with strong BEE credentials.
Today, Rheem claims to be South Africa’s largest BEE manufacturer of metal pails and drums with an annual turnover of over R500-million.
Lwazi joined the company in 2003 as marketing director (having previously worked for SA Breweries), and took over the MD’s role in 2005. When Dr Oscar Dhlomo died in 2008, Lwazi was appointed executive chairman and Ken Webb as MD.
Lwazi is passionate about the packaging industry in general and Rheem in particular. ‘We’re proud to be privately owned in an industry dominated by foreign-owned companies and large multinationals,’ he says. ‘This allows us to be flexible and proactive in responding to customers’ needs.’
And for the future? ‘We aim to grow as a packaging supplier by offering a diverse range of packaging, not only in South Africa, but also throughout Africa,’ Lwazi concludes.
Lwazi Dhlomo, Rheem’s executive chairman, supervises the ribbon-cutting ceremony performed by the Hon Michael Mabuyakhulu (MEC: Economic Development & Tourism). They’re watched by shareholders – non-executive director Khanyi Dhlomo-Chijioke, V Dhlomo and N Dhlomo – and Rheem executive, Ken Webb.
Hulamin’s Reginald Nyandeni catches up with PPM’s Glywnnis Wells and Karen Stretch, and Lwazi Dhlomo.
David Davies explains the latest drum-making technology to an attentive Nathan Kaunda of Shell SA.