Corobrik builds economic legacy through R1b in investment

Monday, November 11, 2019

As Corobrik readies its R800 million new mega factory in Driefontein for full production and begins to build a second new plant in KwaZulu-Natal, the brickmaker says it will see investment pass the R1 billion mark within the next two years.

Speaking at the second South African Investment conference last week, Chief Executive Dirk Meyer, told the high profile private and public sector gathering that the company had invested R550 million in its new Driefontein plant to date and would inject a further R250 million into the project during 2020.

An additional R200 million would also see the company build a new manufacturing facility to the north of Durban to augment production at its current plant.

Following the conference, Meyer confirmed that the design work for the new R200 million KZN factory had already been completed and that negotiations were underway to purchase land for the new operation.

As soon as the Driefontein plant is up and running, work will begin on the new KZN plant which would take about a year to complete and was likely to be in production by 2022, Meyer said.

Of the Driefontein facility, which is the largest and most environmentally friendly facility of its kind in Africa, Meyer said the structure looked “extremely impressive” now that the exterior of the plant had been completed.

He said the first kiln and drier were complete and construction of a second kiln and drier was well underway. The clay preparation machinery and extruders are also in place and installation of the cutting and wet packaging and dehacking machinery had also commenced.

“Next year, we intend to start commissioning the first kiln and drier and, from January onwards, we will be doing dry runs. From September onwards, we will be dry commissioning our second kiln and drier. The idea is to be in full production by November,” he said.

Meyer said the project, which had gone extremely smoothly and would be delivered within budget and on time, had been largely financed from the essentially debt free company’s balance sheet.

About 1 000 jobs have been created during construction of the Driefontein facility with a further 60 permanent positions to be created as the factory comes on stream.

Also, 30 members of the local community have been trained and employed to lay bricks during construction, providing them with a marketable skill going forward.

“What is particularly important about this project is that, whilst we are using German intellectual property, most of the building and construction is being done by South African companies,” Meyer said.

The Driefontein factory will generate at least 20 percent of its electricity needs from renewable resources, natural gas consumption for the kilns would be reduced by at least two thirds and the carbon footprints of both kilns would be substantially reduced.

This sustainability ethos will also be rolled out to other plants with Corobrik retrofitting some with the same new kiln technology going forward.

Corobrik currently operates 13 clay brick factories and 14 kilns countrywide. These produce a mix of plaster and face bricks for the residential and commercial markets. It also has two concrete operations in Durban which supply concrete paving and retaining walls.

Corobrik currently sells about four million bricks per working day.   

The company was established in Durban in 1902 and has established itself as the country’s leading brick maker through ongoing investment in superior technology, manufacturing practices, distribution networks and logistic capabilities.

Meyer said the new Driefontein factory would produce high-quality face bricks in different sizes, formats and colours, enabling Corobrik to keep pace with new building trends and architectural styles. 

The R1 billion spend would also ensure that the company remained relevant as a key stakeholder both within the construction industry and the broader South African business environment.

“This is undoubtedly a strategic investment that transcends any economic cycles. Most of our factories have a useful life of at least 40 years. If we do not invest, our business will not grow. Instead, we are investing at the right time to take advantage of future improvement in the economy,” he said.

Meyer said as an investor, Corobrik had taken a long term rather than a short term view and had faith in government’s strategies to turn the economy around.

He said the market had contracted significantly during the first quarter of 2019 and remained flat since then. No major change was expected for most of 2020 although recovery was likely to begin towards the end of next year or at the beginning of 2021. –