Corobrik, the non-listed leading manufacturer and supplier of bricks and pavers, is investing R800 million in a new factory in Driefrontein near Carletonville in Gauteng as part of wider capital investment programme to upgrade and expand its manufacturing facilities in South Africa.
Dirk Meyer, the chief executive of Corobrik, said yesterday (wed) the new mega factory was being built adjacent to its existing Driefontein factory was the biggest project in the world of bricks this year, with the possible exclusion of China.
Meyer said the contract for the new factory had been awarded to German equipment supplier Keller and it was scheduled to be operational by the end of 2020.
He said the existing Driefontein factory produced 50-million bricks a year but the new factory would produce 100-million bricks a year using a third of the energy at a much higher quality with more flexibility to product different sized products.
Meyer said the new factory would be more automated but did not anticipate this having a significant impact on employment by the company, which has a total headcount of almost 3 000.
“We have enough of a portfolio of operations that we can offer staff to relocate. In the last three or four years we have done significant technological upgrades but have not retrenched anyone,” he said.
Meyer said Corobrik had 13 claybrick factories with 14 kilns in South Africa plus two concrete operations based in Durban, one of which was dedicated to paving and to retaining walls.
“We sell close 1-billion bricks a year. If you break that down to 250 working days a year, its about 4-million bricks a day that go out of our gates,” he said.
Meyer said the investments Corobrik had and was making in upgrading its operations illustrated the confidence it had in South Africa’s economy and the opportunity for the company to grow because of its such small share of the walling market.
He said a R65-million upgrade of its Rietvlei factory was commissioned at the end of January this year and in the past three years it had invested about R120-million in selective upgrades at various factories.
“It’s really a continuous process of investment in the business. We are looking at driving cost down, improving quality and bringing in some new products to the market.
“We have got technology that dates back to the 1960s right up to stuff that is the best in the world. Naturally over time we want to replace the older technology with newer high quality lower carbon footprint technology,” he said.
Meyer stressed the new factory project at Driefontein was not the end of company’s capital investment programme.
“We see another Driefontein-type project pretty soon. We are also quite interested in the concrete industry so we are looking at various options,” he said.
Meyer said Corobrik’s had preference for growing organically rather than through acquisitions.
He said Corobrik had established a staff trust in 2008 that owned 26 percent of the share capital of the company, with the remaining 74 percent held by Mainstreet, a consortium of private individuals.
Meyer said the staff trust had yielded huge benefits in terms of industrial relations while also giving orobrik an effective black shareholding of more than 40 percent, which meant it exceeded any requirements of the mining charter.
“The new debated charter is of no concern to us because we are over 40 percent black-owned. The only issue for us with mining rights is that the whole process is so slow,” he said.