South African manufacturing giant takes a hit from a stronger rand

Aluminium supplier Hulamin has swung into a loss, with the company’s performance impacted by a stronger-than-expected rand, above-inflation increases in energy costs, and increased competition from imports. 

The company has also announced plans to dispose of its extrusions business, which posted a loss of R66.8 million for the first six months of 2025. 

These headwinds come at a difficult time for Hulamin, which is busy expanding its canbody project, which involved a 25-day plant shutdown. 

This somewhat impacted the company’s flexibility to pass on costs to consumers, with it having to build a stockpile of finished goods to be able to supply the market during the shutdown. 

CEO Mark Gounder explained that this was the key objective for the first half of the year for Hulamin, with it trying to manage the plant shutdown without an adverse impact on profitability. 

However, the company posted a total loss per share of 8 cents for the first half of its 2025 financial year. 

The majority of this loss stems from its extrusions business, which it plans to sell, with it contributing a R66.8 million loss. The company’s total loss was R24 million. 

Hulamin’s continuing operations performed much better, with revenue up 8% year-on-year to R7.1 billion. 

However, the positive momentum from higher volumes and a stronger sales mix was more than offset by the impact of a stronger exchange rate, elevated inflationary energy costs and increased pricing pressure in the local can-end market.

The rand’s strengthening versus the dollar of R0.34 year-on-year significantly impacted the competitiveness of Hulamin’s aluminium exports.

As a result, the profit of its continuing operations declined significantly from R276.8 million to R43 million. 

“Following a strategic review of the extrusions segment, we have decided to exit this business and aim to do so by the end of 2025,” Gounder said.  

The company has entered into negotiations regarding the disposal, as announced on SENS on 18 August 2025. 

In addition, operations at the containers division ceased on 6 June 2025, and the wind-down and sale of operating assets are currently in progress. 

“We continued to advance our market-driven strategic capital plan, reaching a major milestone with the successful completion and commissioning of the final phase of our wide canbody expansion project aimed at displacing imports,” Gounder said.  

“Our next focus is the qualification and commercial readiness of our wide-width products, targeted for the first quarter of 2026.”