Aluminium semi-fabricator Hulamin was upbeat on Friday as it announced that it had completed its R500m bet on SA’s local can market.
As part of a "strategic reset", Hulamin has invested R500m since 2022 in a wide-body can production line in a bid to capitalise on the growing demand for locally produced cans.
This should ease the company’s reliance on volatile export markets while increasing Hulamin’s proximity to its customers, allowing it and local can makers to enjoy cost and logistics benefits.
Beverage can components are the most stable segment of Hulamin’s rolled products business, which account for about 57% of rolled product sales. This figure is expected to rise to 60% following the wide-body can expansion, Financial Mail reported earlier this year.
Hulamin’s reliance on exports has made the group more vulnerable to price volatility and shifting trade policies in its offshore markets. The company hopes that growing its local footprint will reduce its exposure to these unpredictable dynamics.
Earlier this year, the company was adamant that US tariffs - including a 25% tariff on all imported steel and aluminium - would not have a material effect on the business, given that US sales account for only about 11% of its total turnover.
Still, aluminium price volatility and operational disruptions have put pressure on the company’s balance sheet this year. In the 12 months to end-December, the KwaZulu-Natal-based company reported a 45% drop in normalised headline earnings per share (HEPS), while basic HEPS fell 28% from the previous year.
Hulamin said in its annual results that a fire at the can end finishing line “limited the business’ ability to fully seize opportunities”, forcing the group to direct its available capacity towards lower margin products.
The weaker results have sparked a gradual sell-off of Hulamin shares in recent months, with shares in the group giving up nearly 23% since end-December.
At 11.35am on Friday on the JSE, its shares were down 3.33% at 261c.
Hulamin, valued at R875m on the JSE, buys primary aluminium and supplies a range of high-value, niche rolled products and complex extrusions, with aluminium rolling.
The company said on Friday that its immediate focus for the remainder of the 2025 financial year was to complete product qualification with key customers and achieve commercial readiness by end-March 2026.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.