Murray & Roberts officially commissioned a new R130 million greenfield aluminium foundry in Port Elizabeth and signalled the strategic intent to position itself as a preferred supplier to the global automotive industry and a partner to the South African Government.

The new facility, called Murray & Roberts Aluminium Castings (Alucast), is situated close to the Ford engine plant and will focus specifically on production of the Ford RoCam 1.3 litre cylinder head.

Murray & Roberts was awarded an initial R1 billion contract to supply castings for Ford's new 1.3 litre and 1.6 litre RoCam engines last year. Production for the five year contract started in March 2002 and production volume increases have already been agreed.

Addressing guests at the official commissioning of Alucast today, Murray & Roberts group chief executive, Brian Bruce, said:

"Murray & Roberts has reached a significant milestone in our long term fulfilment of the RoCam project. We also celebrate the completion of this new aluminium foundry, where we have enhanced our established reputation for project delivery ahead of schedule and below budget.

"This facility represents a significant capital investment by Murray & Roberts and a statement of confidence in the South African economy. We have also approved and commenced a comprehensive upgrade of all of our foundry facilities to bring them to world class standard. This includes an environmental improvement programme that will ensure compliance with globally accepted sustainable development criteria."

Bruce added that the Motor Industry Development Plan (MIDP), introduced by government through the Department of Trade & Industry (the dti), had created the platform for significant economic development in South Africa, particularly the Eastern Cape.

"We have researched the potential for Murray & Roberts in this respect and I am confident that based on the work we are currently doing to significantly upgrade both our plant and human capital to world class performance standard, we will be able to increase our investment and levels of activity as partner to government and the motor industry," he said.

The new Alucast facility relies on 'Tridem' gravity die technology and has the capacity to produce 200 000 cylinder heads per year. Murray & Roberts has a technical agreement with VAW of Germany which includes proven gravity die casting technology, plant and equipment selection, technical assistance during production and training.

The Ford RoCam project has crystalised a revival in the fortunes of the Murray & Roberts foundry business which pioneered mass production of engine blocks, cylinder heads and exhaust manifolds in South Africa.

In addition to the aluminium cylinder heads produced by Alucast, Murray & Roberts will make cast iron engine blocks, silicon molybdenum nodular iron exhaust manifolds, bearing caps and grey iron flywheel castings for the RoCam engine at its plants in Port Elizabeth, Brits and Cape Town.

Murray & Roberts' foundry business comprises four iron foundries, three aluminium foundries, a machining facility and a tooling manufacturer. The foundry operations have retained as their core business the supply of quality castings to the automotive industry.

"Our group has the capacity to offer a fully integrated service - from initial concept through co-design, prototyping, sampling, the manufacture of tooling and onto ultimate production," says John Hoare, managing director of the foundry business.

SPEECH BY BRIAN BRUCE, GROUP CHIEF EXECUTIVE, MURRAY & ROBERTS

Within a week of my appointment as Group Chief Executive of Murray & Roberts on 1 July 2000, I met with the Managing Director of Ford Manufacturing in South Africa, Larry Bird, at his request. The issue was simple - where did I stand relative to the pending Ford RoCam Project?

I went into that meeting with the knowledge that our Foundries Group was losing money; that no capital investment of any significance had been undertaken for a number of years; that the operating environment was an affront to the concept of World Class; and that the business had for some time been categorised as non-core.

Within a few days we had reached agreement on contract terms and conditions that established a solid foundation for what has become an integral and important element of Murray & Roberts' strategy - the leverage of our core competence in Industrial Design and Engineering in the context of our South African competitiveness, to deliver Engineered Products into the large markets of developed economies. Thank you Larry for helping us to make this important distinction between product and project.

Well, in this context we are here today to celebrate both sides of Murray & Roberts capability. We have reached a significant milestone in our long-term fulfilment of the RoCam engine program. We also celebrate the completion of this new aluminium foundry, where we have enhanced our established reputation for project delivery ahead of schedule and below budget.

This facility represents a significant capital investment by Murray & Roberts and a statement of confidence in the South African economy. We have also approved and commenced a comprehensive upgrade of all our foundry facilities to bring them to world class standard. This includes an environmental improvement programme that will ensure compliance with globally acceptable sustainable development criteria.

In this context I am pleased to confirm that my Board has encouraged our participation as a Sponsor of the World Summit on Sustainable Development. We have also aligned ourselves with the New Plan for Africa's Development (NEPAD). These initiatives reflect ongoing development of our value system as a South African based global business, committed to good corporate governance, responsible and involved corporate citizenship, transparency, passion, sustainable development and value creation.

The Motor Industry Development Plan (MIDP), introduced by government through the Department of Trade and Industry (the dti), has created the platform for significant economic development in our country, particularly the Eastern Cape. We have researched the potential for Murray & Roberts in this respect and I am confident that based on the work we are currently doing to significantly upgrade both our plant and human capital to world class performance standard, we will be able to increase our investment and levels of activity as partner to government and the motor industry.

Murray & Roberts has been a pioneer in the use of Industrial Theatre as an effective means to communicate key strategic issues in an environment of cultural diversity, community naivety (in the context of industrial development) and functional illiteracy. We succeeded in raising awareness and accountability for personal health and safety amongst the thousands of Mozambique nationals who were employed on the Mozal aluminium smelter.

Following the performance crisis we experienced at our foundry in Cape Town through the latter part of last year, we realised that the majority of our workforce in this business have not been prepared with any level of understanding of what is expected of them in the context of world class fulfilment. There is no connectivity between their performance in the foundry and the ultimate use of the products they manufacture. In fact there is little connectivity or understanding even amongst management of the linkages between products that are designed and manufactured to meet an increasing global demand for efficiency and environmental preservation, and the effects of our manufacturing process on that same environment.

We have therefore commissioned an Industrial Theatre production to sensitise our entire workforce, including management, to the demands of global best practice. This Alucast aluminium foundry also represents global best practice in its field. We are proud of our partnership with The Ford Motor Company of Southern Africa and the trust they have placed in Murray & Roberts to deliver key elements of the innovative and groundbreaking RoCam engine system.

I thank my colleagues for the work they have done to date in both the commissioning of this new facility and the upgrade of our existing facilities to meet the production requirements of the RoCam Project. We have a steep development curve ahead and a demanding partner in Ford. I am confident that the management team lead by John Hoare and Peter Young will succeed in this challenge.

It is my privilege to declare this facility, the Alucast Foundry, officially commissioned.