The board of Hulamin said it has to introspect to set the group back on a growth path after a difficult 2025 financial year.
Chair Paul Baloyi, in his annual letter published in the group’s annual report, said a major stress factor for management and the board was the “almost impossible” task the group faced in making sensible decisions in a period of US-led global trade uncertainty.
Baloyi said what worsened the situation was that the global trade tensions coincided with the decision by the group to embark on a major and much-needed strategic revamp of its production capacity to protect the local market share.
After the plant recommissioning, “we suffered some setbacks on production, resulting in poor product quality, requiring a significant amount of products being disposed of as scrap metal. Other contributing factors led to a significant loss of earnings, as detailed in the CEO’s report,” Baloyi said.
“In terms of production losses, thorough investigations were carried out in close collaboration with customers, enabling the identification of root causes and the implementation of corrective actions.
“We were not able to recover meaningful value for the remainder of the year, the impact to earnings was a significant decline in group ebitda [earnings before interest, taxes, depreciation and amortisation] relative to the prior year. Needless to say this necessitated painful introspection in how the group operates and material changes in management incentives.”
Hulamin buys primary aluminium and supplies a range of high-value, niche rolled products and complex extrusions. Aluminium rolling, the uses of which include cans, accounts for most revenue.
We were not able to recover meaningful value for the remainder of the year, the impact to earnings was a significant decline in group ebitda [earnings before interest, taxes, depreciation and amortisation] relative to the prior year. Needless to say this necessitated painful introspection in how the group operates and material changes in management incentives
— Paul Baloyi, Hulamin chair
Aluminium is used in a wide range of forms and products: in buildings, boats, planes, trains, trucks, cars, household appliances, packaging, computers, cellphones, solar farms, electrical transformers, overhead power lines, tamper-proof packaging for medicines, and containers for food and beverages.
In March 2025, US President Donald Trump imposed a 25% tariff on all steel and aluminium imports into that country. This import duty was doubled to 50% in June, sending global aluminium producers into a frenzy.
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 and has invested R500m since 2022 in the wide-body can production line in a bid to ease its reliance on volatile export markets.
The group, which on Monday reported a 150% plunge in headline earnings from continuing operations to a loss of R85m, said poor skills had also beset the organisation, in particular at the manufacturing level in terms of product quality.
“As part of the board intervention, we solicited and added new skills at the exco level to address poor product quality and to deal with current low productivity. The board also approved internal top-level changes at exco, in line with the CEO’s recommendations, to address identified operational deficiencies,” Baloyi said.
“A comprehensive remedial plan has been successfully implemented and is yielding positive results, with completion expected by the end of the first quarter of 2026. The revamp of the plant will ensure we retain market share and counter competition, particularly from offshore, by meeting product specification changes demanded by our local clients.
“A key benefit of this initiative is that it will allow us to ramp up production to over 180,000 tonnes per annum with additional capacity available to meet growing market demand.”
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