1. Naledi Inhlanganiso Group Presentation to Portfolio Committee 24 March 2017
Presented by Sibusiso Maphatiane (Group Executive Chairman)

2. Naledi Inhlanganiso Group
Brief Group Overview
Naledi Inhlanganiso Group
Naledi Foundry
Naledi Forging
Naledi Resources
100% Black owned group, majority women owned
Established in 2013 in the steel and iron manufacturing industry
Driving transformation and industrialisation through investment in plant, people and products

3. Naledi Foundry Overview
General information of Naledi Foundry (previously Guestro Castings):
Company situated in Lincoln Road, Benoni, Gauteng
Land size – 10 hectares ( m2)
Installed electricity capacity – 60MVA
Number of employees – 240 people (80 retrenched in March 2017)
One of the largest foundries in SA, only of its kind which is black owned
Aligned to support Government IPAP and NDP objectives in localisation, re-industrialisation and transformation
Production information:
Two production divisions (combined output of up to 150 tons per day)
Ferrous and non-ferrous metals – grey iron, SG iron, steel
Recently invested R100m into the plant to increase capacity, quality and production flexibility (new products)

4. Naledi Foundry Market AUTOMOTIVE
Our foundry specializes in the manufacturing of high quality automotive components such as hubs, calipers and housing. We are a second or third tier supplier of casting to machinists and assemblers supplying various renowned brands such as Toyota, Nissan and (GM) General Motors.
TRANSPORT
Our foundry supply mechanical and structural components to the transport industry. We supply both the OEM and after- markets with products such as brake drums, hubs, torque plates, radius rods and bearing caps for trucks, buses and trailer axle manufacturers.
RAILWAY
The company manufactures components for various rail manufacturers and distributors by supplying rail, locomotive, wagons and coach components such as braking system, coupling system, bogey parts as well as rail infrastructure parts.
MINING
As mining is an integral part of our countries thriving economy, our business recognizes the importance of creating a readily available supply of necessary components to the industry. We supply grinding media, pulleys, brackets, mine support products and rock drills to manufacturers and distributors
ENERGY
With the ever expanding search for alternative means of energy, we have identified the need to supply essential components to various energy sectors such as gas, wind, fossil fuel and nuclear. Our offering to the industry includes solid grinding balls, rotor hubs, grate bars and mill components.
VALVES
Large opportunities exist within the infrastructural development programme. Our products range includes a variety of valve components such as valve bodies, knife gates, ball valves and check valves from 50mm in size to large 12 ton castings.

5. Naledi Forging Overview
General information of Naledi Forging:
Awarded a 7 year contract by Transnet for supply of forge train wheels
100% import replacement project
Establishment of local wheel forge plant in South Africa, first in Africa
Supply domestic market, rest of Africa and rest of the world
Technical partnership with world’s largest train wheel manufacturer in China
IDC is 40% shareholder and funder to Naledi Forging.
Finalising acquisition of internationally renowned forging plant in Vereeniging which will be expanded to establish local forge wheel plant.

6. Naledi Resources General information of Naledi Resources:
Business division focused on mining sector in South Africa and Africa
Early stage open cast coal project near Delmas, Mpumalanga
Coal to be supplied to local and export markets
Expected start of production in November 2017
Further mining projects currently under consideration

7. LOCAL PROCUREMENT CHALLENGES
TRANSNET
PRASA/GIBELA
ESKOM
LOCAL PROCUREMENT CHALLENGES

8. Transnet Challenges experienced with Transnet:
Recent engagements with Transnet Engineering Executives has been informative and encouraging on the way forward.
Performance of wheel contract
Naledi is the only black owned wheel supplier for Transnet
Contract has not performed over first 28 months in terms of volumes
Naledi proceeding with large investment to set up local production through acquisition of internationally renowned forging plant in Vereeniging based on local content requirements in the contract:
Offer accepted by seller
Funding by IDC before end of the March
Additional funding support through DTI consist of:
12I Large Project approval of R900m
Black Industrialist Scheme application of R50m

9. Transnet Challenges experienced with Transnet (continued):
Bogie tender
Shortlisted in final negotiations
Cruzaco technical partnership was agreed and finalised in preparation for tender
Not awarded a supply contract, Naledi still has local production capability
CSR Component Development for Transnet Product Development
R3m development costs incurred
All 17 parts approved by TE Product Development in Koedoespoort
No orders – decision to stop project by Transnet

10. PRASA / GIBELA Challenges experienced with PRASA and Gibela:
Wheels for new Gibela project
OEM wheels supply already awarded to Bonatrans and Masteel
Wheels was not originally designated for local content
Naledi proposed collaboration of RFQ’s to enable unlocking of synergies (eg. Wheelset assembly and maintenance) of investment for industry
Bogie components and castings to Gibela
Fairly low volumes resulting difficulties to remain competitive, Alstom/first tier suppliers unwilling to provide local manufacturers like Naledi access to global supply chain
Passed plant audit by Gibela/Alstom at foundry
Submitted various RFQ’s, no award yet
Complicated documentation and RFQ requirements

11. Eskom Challenges experienced with Eskom:
Credit for unwavering support and opportunity provided for a black company to be awarded a first ever grinding media supply contract
Teething challenges
Delays internally at Eskom to sign contract
Large orders upfront before contract signed, creating working capital challenges
Internal politics and lobbying against new black supplier
Supplier development support can improve in order to develop local production capacity further to replace imported products through development of other foundry products, including
Valves
Flanges
Mill bases
other grinding media products

12. Conclusion Salient points and conclusion: Transnet
Naledi outperform BEE improvement and SD commitments, despite contract not yet performing
Naledi investing R700m into acquisition and expansion phase 1, further R1.1b investment into expansion phase 2, will Naledi receive Transnet support going forward with orders for wheels?
PRASA/Gibela
Wheels can be manufactured locally by Naledi, clear commitment and support from Gibela is required regarding procurement strategy to allow Naledi to set up properly in time
Incorporation of SA suppliers into international OEM
supply chains for sustainable volumes

13. Conclusion Salient points and conclusion (continued): Eskom
Naledi is thankful for the support received for grinding media
Further localization opportunities must now be explored, including other grinding media products, valves, mill bases, flanges, etc.

14. Thank you
37 Lincoln Road
Benoni Industrial Sites
Gauteng
South Africa