The signing ceremony
in China in July –
Mr. Nene Mathebula
and Mr. Shi
 
22 September 2009 - As part of a campaign involving the private sector and government utilities and municipalities to generate additional local content in the transformer manufacturing industry, Savcio Holdings (Pty) Ltd has been investing significant capacity in converting and processing equipment over the last few years. This has included and not limited to conversion and customisation of transformer board and paper, transformer conductor manufacture, transformer oil regeneration and analysis and a myriad of additional components and services. In a new significant development for the transformer manufacturing industry, Transwire, a Division of Savcio Holdings has signed a co-operation agreement with China’s Baoding Tianwei Electric Wire Company (BTEW).

The purpose of the agreement was initially to manage the supply lines of paper covered enamel conductors and Continuous Transposed Conductors (CTC) into the Transformer manufacturing and repair sector. From this step the next development will be large scale manufacture of thermally upgraded paper covered enamel conductors for the industry. This product effectively eliminates any possible detrimental effect of sulphur contamination of conductors from aging transformer oil and is the new utility standard. Ultimately the aim is to set up CTC manufacturing capacity at Transwire premises in Olifantsfontein, Gauteng. BTEW is China’s leading manufacturer of transformer conductors with a client base including major European and American transformer manufactures. They were recently approved for local supply by major local transformer manufacturers and repairers.

South Africa transformer manufacturers have increasingly imported CTC to satisfy the stringent specifications set by electricity utilities. CTC has traditionally been used on generator transformers (GSU units) as it not only increases efficiency and reliability but reduces overall size of the transformer as well. International trends and best practice has been to increasingly use CTC in Transmission and Distribution transformers because of the associated benefits. Local utilities, especially Eskom have caught onto to this hence increased use of CTC locally which had to be imported due to lack of local capacity.

In light of this, Transwire, the largest manufacturer and supplier of conductor to the industry, decided to investigate the possibility of expanding its capacity to include CTC manufacture in its factory. It must be mentioned also that Eskom played an important role in getting industry talking about CTC capacity and guiding the process. This culminated in a visit by SAVCIO executives to BTEW to initiate discussions around localising capacity.

Local CTC manufacture will significantly enhance industry competitiveness. The transformer industry has actually grown in the last three years despite the onslaught of imports. This competitive edge must be maintained and enhanced at every opportunity. With Eskom’s capacity set to double in 10 years time it only makes sense that local capacity in critical areas grows in line.  SA does not have the luxury of major manufacturers at its doorstep like other utilities in the first world countries. South Africa needs to take advantage of current capex projects to enhance inherently competitive industries like the transformer manufacturing industry.

“Job “creation” is repeatedly spoken about at government and executive level meetings but implementation is lacking due to the lack of support to the local industry. South African Companies have adequate expertise but just need to be given the opportunity to prove their capabilities.  It is the case that South African companies and in particular Parastatals generally take the easier option of sourcing products from abroad as opposed to supporting local industry. South Africa is predominantly a commodity based economy with a focus on the export of commodities with little value-adding. This has a major negative impact on our current account which is currently heading toward major deficits.

As a country we should all be working towards diversifying our economy with more local value-adding. This has tremendous job-creation potential which will ultimately assist in the fight against crime which stems from high unemployment.

Transwire and BTEW have embarked on a technical investigation to review the next stage of localisation which is expected to be completed by end October.  A delegation from BTEW are in SA at present (21st September) represented by Shi Zhenzhong (Vice President, International) and Li Xiongzhuang (Chief Engineer, Technical).  Mr Nene Mathebula, Executive Director of Savcio Holdings is facilitating the project.  Savcio are in the process of securing government support in this initiative as we regard this project as important to the goals of leveraging government expenditure to further build manufacturing capacity in the country.  When implemented this new capacity will be the first of its kind in Africa.