In the past six months ACTOM has come through relatively unscathed from COVID-19, as we have seen a major reduction in infections of our staff, with no fatalities occurring during this calendar year.
The war in Ukraine continues to create chaos and disruption in global markets, with major supply chain shocks. This has had a negative impact on globalisation and we have had to rethink our strategy on stock and localisation in some areas. We’ve been forced to increase stockholding in some businesses to cater for increased raw material lead times.
The current global economic outlook is extremely volatile, as we’ve seen a major increase in inflation across the world, which has resulted in increased interest rates, which in turn has caused a reduction in global GDP, with various economies going into recession and emerging economy currencies weakening. Commodity prices have also reduced.
The rand has dropped to exceptionally weak levels. This however bodes well for local manufacturing and exports.
The global digital revolution continues to advance. In line with this trend, ACTOM has developed various initiatives embracing new technologies which have been adapted into our product offering to ultimately optimise system efficiency for our customer base. We’ve successfully introduced drone technology into boiler inspections and have embarked on incorporating online condition monitoring for the equipment we provide.
We are also further diversifying our offering to customers by providing operation and maintenance of their plant. We view this as a major strategic initiative going forward.
Despite very tough operating conditions and a host of worsening problems beyond our control that are making the running of our operations extremely challenging, I’m happy to say that our financial performance has vastly improved year on year, with the group’s orders on hand and key metrics ahead of last year on a year-to-date basis.
Among a number of problems South Africa is burdened with is its energy crisis, where demand now outstrips supply by approximately four to six gigawatts. It has plunged the country into frequent load-shedding that is having a severely disruptive effect on business activity. We’ve consequently taken a strategic decision to review our policies on energy and water with the aim of placing the business on a more sustainable footing. This involves rolling out renewable energy sources in our various operations based on criticality.
The energy crisis has however led to an increase in renewable energy projects. We are starting to see a surge in private sector generation projects, so a marked increase in demand for renewable energy-related products is expected. We are looking to increase capacity within the group to diversify and increase manufacture of these products to meet the growing demand for them.
The unemployment crisis continues to grow. In addressing this difficult problem, we in industry need to set for ourselves the goal of increasing manufacturing activity as much as possible to create more job opportunities for unemployed people, combined with providing more skills training to better equip them for gainful employment.
Over the past year capacity within our training centres has been increased to ensure that skills are available and aligned with market requirements.
I’m pleased to note that our lost time injury frequency rate (LTIFR) is 0.69. I would like to thank all involved for their active involvement in making our workplace safer.
Finally, I’d like to thank our management team and staff for their continued commitment to the business. While we still expect the global economic environment to continue being volatile, we must stay focussed on managing as best we can those matters that are within our control.
I’d like to wish all staff and their families a blessed Christmas and a happy New Year.
Mervyn Naidoo
