23 Nov 2012 SA to move to all-aluminium cans

South Africa’s beverage cans, both soft drinks and beer cans, are currently produced with a steel body and aluminium can-ends and tabs.

JSE-listed Hulamin, which supplies the aluminium products for can-ends and tabs, recentlyy signed a two-and-a-half year aluminium sheeting supply deal with South Africa’s sole beverage can manufacturer, Bevcan.

The Nampak subsidiary is currently converting at least four of its more modern tin-plated steel can production lines to enable production of aluminium cans.

Bevcan MD Erik Smuts says that the conversion was expected to cost between R600-million and R800-million, but would include a number of enhancements and changes, such as speed.

The group would most likely phase out the older production lines as it moved to eventually completely stop producing tin-plated steel cans.

Initially, about 70% of the beverage cans would be 100% aluminium.

The product, which is new to Hulamin’s portfolio, was trialled successfully in Europe over the past year, said Hulamin CEO Richard Jacob.

Bevcan would initially supplement its required supply with rolled aluminium product imports, as it tested quality and while Hulamin ramped up aluminium sheeting deliveries to about 14 000 t by 2015.

South Africa’s conversion of the can body to aluminium sheeting was a significant step in growing Hulamin’s local sales, Jacob said.

Historically, the country had access to cheap steel, but recent years have seen prices becoming increasingly volatile and less competitive.

Aluminium-bodied cans were becoming an increasingly attractive lower cost option for steel, owing to, besides others, its lightweight, corrosion-resistant features, as well as its ability to be cooled rapidly. It was also the most successfully recycled packaging product.

Aluminium was dubbed the product of the future, said Jacob, adding that South Africa was starting to fall in line with global trends.

Hulamin aimed to table a proposal to its board in the first half of next year, which would see the company establish a recycling initiative by the end of next year.

“Recycling is a big issue and this is seen as a strategic move,” Jacob said.

Aluminium cans were more economically viable, with the value of a used aluminium can higher than that of a tin-plated steel can, which Smuts believed, could push the recycling volumes higher.

Currently, more than 70% of the cans produced in South Africa were recovered for recycling.

“A can on the street is worth about 5c to 10c for someone who collects cans and sells them to a scrap dealer,” he said.

Jacob said it was estimated that between R100-million and R200-million a year would flow into the scrap metals/recycling industry, allowing an extra 2 000 to 3 000 people a source of income from collecting and selling used cans.

Collect-a-Can states on its website that, currently, about 100 000 “collectors” were collecting and selling cans to scrap dealers on a regular basis.

Hulamin aims to buy back the used, empty aluminium cans from scrap dealers to process and recycle them for reuse.

The company would need to acquire melting equipment and environment-friendly can-decoating equipment.

Hulamin believed it would have created a “closed loop” in manufacturing the aluminium and recycling the used product.

Source: Engineering News