Refractory and Metallurgical Solution, beginning was as the South African brick manufacturing business of Vereeniging Refractories in Vereeniging and Springs. In 2014, the brickmaking and basic monolithic businesses underwent a management buyout, the business trading as Verref Shaped. After a major restructuring in 2016, the name of the business was changed to Refractory and Metallurgical Solution Pty Ltd. At the same time, RMS started shaping its business model around its technical expertise and world class product range.
Dennis Brazier, joined Vereeniging Refractories (Pty) Ltd as Chief Operating Officer in March 2010. He was promoted to Chief Executive Officer of the Shaped Refractories division in 2011 and later assumed the role of Managing Director of Verref Shaped (Pty) Ltd after the unbundling of the Vereeniging group of companies in 2013. In 2014, he led a management buyout of Verref Shaped and the company was renamed Refractory and Metallurgical Solution (Pty) Ltd after major restructuring in 2016.
Refwin: Mr. Brazier, thank you for accepting our interview. Would you please start with an introduction to Refractory and Metallurgical Solutions?
Mr. Dennis Brazier: Refractory and Metallurgical Solutions was formed after management from the old Vereeniging Refractories brick operations in South Africa, bought the brick and basic monolithic operations in 2014. Through major restructuring and refocus, Refractory and Metallurgical Solutions (RMS) is entirely different than that of its predecessor. Production of brick and monolithic is now through strategic partners, using RMS developed IP and raw materials. RMS directly manages raw material production for magnesia chrome brick at its fusion plant in Vereeniging South Africa, producing fused grain magnesia chrome spinel is for exclusive use in our products. This allows RMS to manage product performance and to make changes quickly depending on client requirements. In addition, RMS directly manages finishing capabilities for brick products where very tight tolerances can be achieved using state of the art German brick grinders. The facility also produces nozzles and has a range of cutting machines and drills.
Refractory and Metallurgical Solutions vision is to unlock and create value from the mineral wealth of our planet in a responsible manner, benefiting society at large. Not only are we refractory product manufacturers, our skills and knowledge allow RMS to provide services complimentary to the products. We are passionate about finding sustainable solutions to client challenges and focus of long-term relationships where not only do we deliver product that delivers performance, but we also deliver services supporting and enhancing the client value proposition.
Refwin: What roles are you playing in South Africa’s market? Could you talk about the supply and demand situation of refractory industry in South Africa?
Mr. Dennis Brazier: Before RMS, Vereeniging Refractories was a dominant player in the base metals refractory market in Southern Africa. With the dawn of new democracy in South Africa, the market opened with many overseas suppliers entering the market. This introduced competition and price pressures to local brick producers. With high cost of production, companies like Vereeniging Refractories had to adapt, become smaller and more flexible. RMS has had to change its business model to compete in a diminishing South African market, looking to grow exports into Southern Africa, Indonesia, North America, and the Middle East. RMS is a dominant player in project business in the base metals industry in South Africa and provides the local market alternatives that are competitive and world class. Within the last year, the South African government has pushed empowerment and localization of production. RMS concluded an empowerment deal in 2019 and is a local producer of refractory products (brick and monolithic) with local input contents of more than 70 percent. With legislation now coming into force with suppliers being empowered and producing locally, RMS is well positioned to grow its market share.
The South African refractory market is fragmented with many players in the monolithic space, although dominated by three big producers, and fewer players in the brick space. There are two local brick manufacturers of which RMS is one.
The size of the South African market has reduced significantly over the last 10 years due to closures of energy intensive processes and energy constraints. In addition, electricity costs have skyrocketed over the last 5 years and this has led to the closure of steel, ferrochrome and ferro manganese plants.
Refwin: What do you think are the main revenue growth points for the refractory’s manufacturers in South Africa in the next 10 years? What do you think its future lie in?
Mr. Dennis Brazier: We are expecting greater competition and consolidation of monolithic producers or even closures of smaller producers, unless these companies look at alternative markets. Many producers are looking at novel ways to reduce the cost of production to maintain or increase margins. With South Africa turning to more localized manufacturing, RMS expects that local brick manufacturers will benefit from added market share in the next 10 years. Technology will have to change to reduce the impact on our planet and the next breakthrough here will need new products and therefore require companies to be innovative and flexible.
Refwin: The sudden Covid-19 pandemic has made many industries face great challenges since it arose, and South Africa is one of the most severely affected regions. What measures have RMS taken to pull through this difficult times and what changes have it brought to RMS?
Mr. Dennis Brazier: RMS from 2014 has been evolving and changing. The business model was disrupted in a major way in 2018, reducing fixed costs dramatically and increasing flexibility. RMS has been investing in creating virtual offices and workspaces in 2019 and when Covid hit South Africa, the disruption was minimal. With our new business model and technology enhancements, RMS managed to reduce the overall impact of Covid. We utilized the period of severe lockdowns to improve our skills and knowledge through training of employees. The quitter period also allowed us to sharpen our strategy. Covid has been challenging, but RMS as a business has evolved further into the company focused on our vision.
Refwin: I note that you have started development products using recycled materials for the last couple of years. Can you tell us more about it? What makes you do this?
Mr. Dennis Brazier: In line with our strategic objectives, we started looking at refractory waste as a source of creating value and reducing the impact to the planet by embracing the circular economy. We evaluated sources of waste and found that at least 20 percent of the refractory brick supplied and used, could be used as a raw material. We started conducting development and trial work on recycled brick into refractory products and tested these against virgin raw material products. In addition, these recycled products can be used as metallurgical additives or manufacture thereof. Our small fusion plant allows RMS to treat hydrated basic materials and produce various spinel products which we use in our brick products. This reduces the carbon footprint of our products dramatically. South Africa is a country with high unemployment and we as a company started looking at developing methods of creating employment by recovering refractory waste products. RMS is building social partnerships with communities and our clients to create employment of recovery projects at our client communities.
Refwin: Do you have any plan to expand your business globally? And what are your strategic development plan in the next five years?
Mr. Dennis Brazier: Our strategy is firmly focused on South Africa to assist in the upliftment of our country and unlock its mineral wealth. However, we are looking at growing our exports into areas where our strategy, vison and values align with prospective clients. We already export into Southern Africa, Indonesia, North America, and the Middle East and are looking at growing these export nodes.
Refwin: What are the key factors driving RMS to succeed in the market? Could you please share with us some of your successful practices?
Mr. Dennis Brazier: Our success stems from the RMS team and our approach. Firstly, we pride ourselves with our competencies, with many team members having come out of our client industries. Our approach is to firstly understand the client’s process and challenges before we even start talking refractories. The fact we make and sell refractories is incidental. Our approach is also about being flexible. As a smaller refractory company with a hybrid decision making structure, decisions and changes are made faster. Lastly, all key management team members are shareholders, which creates clear accountability and drive.
Refwin: Some experts said that it could take at least two to three years for the global economy recover from Covid-19. How long do you think it will take for the refractory industry in South Africa to recover?
Mr. Dennis Brazier: South Africa is on the verge of the second wave of the pandemic and three months away from the first wave. We have seen the impact of Covid on smaller businesses, especially the hospitality and tourism sector and not so much in the refractory industry. The impact on the refractory industry has not been acute, based on no real news of any companies closing or being in distress. We firmly believe the real impact will hit the South African economy in 2021. We are not expecting a full recovery until 2022.
Refwin: Thanks for all the valuable and professional sharing with us. We wish RMS a successful completion of all goals in the near future.
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