BASF South Africa (SA) will be downsizing operations at its mobile emissions catalysts plant in Port Elizabeth.
“An extended reduction in the expected medium-term demand for products manufactured at this facility saw the site undertake an organisational restructuring exercise resulting in 53 current positions becoming redundant. The site currently employs 308 staff,” says the company in a statement.
BASF SA head of communications Petra Bezuidenhout tells Engineering News that the reduced demand relates “to specific overseas customers based in southern Europe, serviced by the Port Elizabeth facility. The global demand from the auto industry has decreased by 7.2%. Southern Europe is experiencing a double- digit decrease and the site is impacted on accordingly”.
The BASF statement notes that BASF’s other catalyst production facilities around the world are not affected by this site-specific restructuring activity.
“BASF’s global emissions catalysts business remains strong and is expected to continue to grow at above market rates, driven in large part by new emissions regulations, global automotive production growth and its innovative technology solutions.”
Catalytic converters made up just under 50% of South African vehicle component exports in 2011.
South Africa’s vehicle components industry increased exports by 18% to R37.8-billion in 2011, compared with 2010, National Association of Automotive Component and Allied Manufacturers executive director Roger Pitot told Engineering News in April.
Catalytic converters were again the lead performer in South Africa’s parts stable, with exports reaching R19.9-billion in 2011, which was a 30% increase on 2010.
“This is a good recovery, but it was also, to some extent, brought about by higher platinum-group metal prices,” said Pitot.
Commenting on the BASF staff cut, Pitot notes that some global vehicle manufacturers have not renewed their contracts for the supply of catalytic converters from South Africa, as the benefits offered to local component production under government’s new Automotive Production and Development Programme (APDP) will be lower than under the support programme it is scheduled to replace in 2013, the Motor Industry Development Programme.
“Even if there is support for vulnerable sectors under the APDP, this will phase out eventually. “This means vehicle manufacturers are placing their business in other countries.”
Pitot says he does not expect the South African catalytic converter industry to grow further, but that “it will be good if they could hang on to the business they had”.
Bezuidenhout emphasises that BASF’s restructuring process is a direct result of decreased demand for the catalysts produced at Port Elizabeth, and not the APDP.
“There is no direct impact of the APDP on business at this stage. Sourcing decisions of the OEMs (vehicle manufacturers) depend on a multitude of factors and criteria.”
BASF announced in March that its Port Elizabeth mobile emissions catalysts facility had produced its 50-millionth automotive catalyst for the catalytic converter industry.
To subscribe to Engineering News’s print magazine email firstname.lastname@example.org or buy now.