A R240 million recapitalisation programme is set to bolster the group’s rail manufacturing capacities by up to 10 times.
Johannesburg based DCD Rolling Stock, a division of international manufacturing and engineering company DCD Group, has launched the first R100 million phase of a R240 million recapitalisation programme, which is being implemented by the company to further consolidate its reputation for being a leading manufacturer and supplier of locomotives, wagons and bogies to railway, mining and industrial operations.
The investment comes at a time when South Africa is acquiring new locomotives and passenger trains through state-run Transnet and the Passenger Rail Agency of South Africa (Prasa), amid a call for increased local procurement in the rail sector.
The first phase of the investment by the company in its Boksburg, Gauteng manufacturing facility, was officially opened by Public Enterprises Minister Malusi Gigaba, late last year. Four Motoman Yaskawa robotic welding systems form the basis of the implementation of the new and advanced technology to enhance competitiveness.
Senior dignitaries at the official opening of DCD Rolling Stock’s Boksburg, Gauteng manufacturing facility, which forms part of the company’s R240 million recapitalisation programme. Left to right Kurt Rosenburg of Yaskawa Southern Africa, Public Enterprises Minister Malusi Gigaba, DCD Group MD Rob King, Terry Rosenberg of Yaskawa Southern Africa and DCD Rolling Stock’s GM Petrus Mulaudzi
The recapitalisation programme would be rolled out over three to five years, beginning with the R100 million investment in Phase 1, which saw the regaining and upgrading of DCD’s
42 000 m² manufacturing facility and equipment.
DCD Rolling Stock GM Petrus Mulaudzi revealed at the launch that the DCD group invested R80 million to regain the facility from its sister company DCD Protected Mobility, which had since moved to a new purpose-built manufacturing plant in Isando.
“An additional R10 million was spent on the installation of four robotic welding cells, while the balance was spent on repairs. The recapitalisation programme is essential in promoting internal skills development and growth within DCD Rolling Stock.”
“Despite years of downturn, the railway industry in South Africa and the rest of the continent, looks set to rapidly expand. It is therefore important for DCD Rolling Stock to proactively prepare for this by investing in our people and infrastructure.”
The larger Motoman robotic welding cell has a reach of 3,2 m and can currently weld structures up to approximately 9 m in length and due to the modular design, can be extended beyond twelve to eighteen metres to ensure faster turnaround times
Since 1944, DCD Rolling Stock has produced over 130 000 wagons, 1 000 surface locomotives and 4 000 underground locomotives and over 278 000 bogies. With a large focus being placed on South Africa, Mulaudzi notes that billions of Rands are being invested by state-owned freight and passenger rail companies. “By establishing a world-class manufacturing facility through the recapitalisation programme, DCD Rolling Stock can add substantial value to this supply chain in the short- to medium-term future.”
Mulaudzi believes that Africa in particular holds the greatest potential for the company’s growth into the future. “Under-developed countries with burgeoning mining industries, such as Mozambique, Zambia and Tanzania, will serve as the catalyst for railway development, due to the fact that an increasing number of mines will require a link to a port for exporting purposes.”
DCD Rolling Stock manufacturing manager Frank Ramage indicated that the installation of Swedish-engineered Motoman automated robotic welding cells will increase production volumes, in addition to more efficiently utilising the skills of experienced manual welders.
A drawing of the larger Motoman robotic welding cell
“The larger cells have a reach of 3,2 m and can currently weld structures up to approximately 9 m in length and due to the modular design, can be extended beyond twelve to eighteen metres to ensure faster turnaround times. By incorporating these robotic welding cells into the manufacturing lines on straight weld jobs, we can remove experienced welders from this standard and mundane task, and redirect them to more complex projects with curves and corners that require their skills,” he noted.
Ramage states that automation will not downsize staff numbers, but rather increase volumes while improving worker morale and productivity through effective skills utilisation. “Automation will allow for the welding of four fabricated bogie frames with a length of approximately 7,5 m with the capacity to increase by extending the rail and tracks and adding additional robots simultaneously, as opposed to a single bogie during the manual process, which substantially improves lead times for the customer. A higher level of work complexity positively engages the manual welders, and encourages them to produce higher quality work.”
Another of the four Motoman robotic welding cell systems supplied by Yaskawa Southern Africa
Another advantage of implementing robotic welding cells is the fact that existing staff members will be upskilled in learning to operate the software, added Ramage.
“The Motoman robotic welding cell equipment is among the most advanced in the world, and staff members being trained in the application of this technology will benefit from gaining new industry insight ahead of others.”
Mulaudzi highlights the fact that the DCD Group places a strong emphasis on internal skills development, with the recapitalisation programme serving as the ideal platform for encouraging personal growth and quality development within DCD Rolling Stock.
Automation will allow for the welding of four fabricated bogie frames with a length of approximately 7,5 m with the capacity to increase by extending the rail and tracks and adding additional robots simultaneously, as opposed to a single bogie during the manual process, which substantially improves lead times for the customer
“It is clear that government intends to invest heavily in infrastructure spend over the next seven to fifteen years, particularly in the energy and rail sectors. It is for this reason that we are aiming to create a local manufacturing environment that ensures long term sustainability,” he explained.
“Through the establishment of a minimum local content threshold for the amount of components manufactured locally, government and private companies can encourage all vendors, manufacturers and suppliers in the South African manufacturing sector to make the necessary preparations and commitment to future investment, procurement and production.”
“The local content threshold stretches far beyond manufacturing. Companies must be able to add real value to the overall supply chain through competitive in-house design capabilities, and well-trained and experienced employees. Through this investment initiated by the State-Owned Enterprises (SOEs) we want to encourage maximum collaboration and support between SOEs and the private sector. This will be one way of creating a SA Inc. industry approach that competes sustainably in the global space. As DCD Rolling Stock, this is our small contribution to this vision,” said Mulaudzi.
DCD Rolling Stock has installed four Swedish-engineered Motoman automated robotic welding cells
“South Africa needs a high rate of economic growth over a sustained period of time. This must be supported by policies that help South African manufacturing to thrive,” said Gigaba.
Gigaba applauded DCD’s investment and stated that it would support the transport sector, especially rail, which played a critical part in the country’s economy.
He added that the investment would also support road to rail migration and provide the much-needed support for localisation.
Further, he noted that government required a better understanding of businesses, and that better relations between the State and businesses needed to be forged to reduce the “trust deficit”. “If the State does not have the capability to grow the economy by itself, it needs to forge relationships with the private sector,” said Gigaba.
The recent publishing by the South African Reserve Bank of the country’s gross domestic product growth increase of 0.7% in the third quarter in 2013, was disconcerting and reflected negative growth, he said. “We need high rates of economic growth over a sustained period of time. We have natural resources but we need to make a turn to the unnatural sector, which requires us to invest in and take deliberate decisions and policies to nurture the sector and harvest it for the betterment of the economy,” Gigaba said.
“By incorporating these robotic welding cells into the manufacturing lines on straight weld jobs, we can remove experienced welders from this standard and mundane task, and redirect them to more complex projects with curves and corners that require their skills,” said manufacturing manager Frank Ramage
Further, he noted that, the high level of unemployment was unsustainable and high-quality jobs were needed in the manufacturing sector, adding that governments across the world were providing support for the continued development of their respective manufacturing sectors and those types of investments would bolster manufacturing capabilities.
However, Gigaba believed that DCD’s programme launch was a turning point in the local manufacturing sector as it created “decent work and reduced inequality”.
Gigaba is the shareholder representative for Transnet, which is investing R308 billion over the next seven years to boost its capacity and stimulate economic activity.
Almost two-thirds of Transnet’s market demand strategy budget, just more than R230 billion, will be directed to rail infrastructure. On locomotives alone, Transnet Freight Rail is expected to invest about R38 billion. Prasa is buying 600 new commuter trains for R51 billion.
A combination of the deregulation of road transport and South Africa’s chronic underinvestment in rail for much of the past three decades has had the effect of shifting about 87% of freight onto roads.
The Motoman robotic welding cell equipment is among the most advanced in the world
From a passenger rail perspective, long-distance train services are close to collapse, with the Treasury withdrawing support for these operations, while Metrorail has become notorious for poor reliability and a worrying safety performance.
DCD’s latest investment follows recent substantial outlays on other group divisions. These include R100 million on DCD Protected Mobility’s new armoured vehicle manufacturing facility in nearby Isando, a R330 million investment into its DCD Ringrollers railway “tyre” factory in Vereeniging, and R300 million for a wind energy manufacturing plant at the Coega Industrial Development Zone near Port Elizabeth.
DCD MD Rob King said it was not just the South African market that was waking from its deep slumber.
“The rail industry is being revitalised by development all over Africa,” he said. “In South Africa, the government has made clear its intention to invest heavily in infrastructure over the next seven to 15 years, particularly in the energy and rail sectors.”
Investment and technology upgrades in the plant will lift the level of automation, which will boost volumes, reliability and productivity. According to Mulaudzi automation “will allow for the welding of four fabricated bogie frames in the same time it takes for a single bogie using the manual process”.
The programme is expected to create 100 new jobs and full scale production was expected to begin at the facility by December 2013.