Producer of zirconia primarily for the steel indus- try Foskor Zirconia announced its plans to diversify its product range, to reduce its dependency on the refractory and steelmaking industry. Foskor Zirconia CEO Charles Schmidt says that the recessionary conditions currently faced by local and global steel producers have had a crippling effect on many raw material suppliers to the steel industry.
“The company’s new growth and product diversification strategy will allow it to enhance the existing product ranges by adding a new range of alumina ceramics for wear applications, as well as monoclinic zirconia, used in the glass industry. These expansion plans are estimated at R7-million, spread over 18 months, to ensure long-term sustainability and profitably,” says Schmidt.
Schmidt believes that the new range of products is fairly sheltered from the vagaries of the economic recession and its production is necessary to reduce the company’s sole reliance on the steel industry. The company’s production of fused zirconia is used as a refractory material in steel production.
Foskor Zirconia’s current expansion plan involves building a new tilting furnace for zirconia production. This will be used for the glass and wear application industries, where the company is aiming to establish market share.
Schmidt explains that it was necessary to identify these markets as potential growth points, and credits the company’s technical and sales teams that worked hard to source new export markets and uses for its products.
Foskor Zirconia completed a capital expansion project last year. The R5-million project allowed the company to raise its production capacity from 3 750 t/y to 4 500 t/y. However, increased production coincided with a slowdown in sales volumes at the end of 2008, and led to a considerable build-up in inventories. Schmidt attributes the decrease in sales to a 40% reduction in steel demand.
This necessitated a shutdown of the fusion division in April this year, and the retrenchment of 109 employees; but with the com- pany’s product diversification plans, Schmidt notes that it will be able to recall 85 employees.
The recalled employees have the necessary skills to work in the company’s smelter plant. Schmidt claims that the smelter is the largest in the southern hemisphere and is ready for production again.
Meanwhile, in 2008, mining and beneficiation giant the Foskor group transferred its noncore zirconia assets to Foskor Zirconia, a separate legal entity. The majority stake in Foskor Zirconia was then sold to India’s Murugappa group’s affiliate, Carborundum Universal.
Meanwhile, State-development financier Industrial Development Corporation will fund a deal to sell 26% equity in the Foskor group to a broad section of black investors at a significant discount, reports City Press.