CFO Terry Musiyambiri: Ostem is targeting to expand beyond mining

Local manufacturing can provide some certainty at a time when shipping periods are uncertain, Terry says.

Black-owned contract manufacturer Ostem, a division of Istogen Investments Holdings, is expanding its reach beyond mining with the recent purchase of one of Metso Outotec’s facilities located in the industrial hub of Vereeniging, together with the fabrication, machining, assembly and repair part of the business.

Ostem Chairperson and Istogen CFO Terry Musiyambiri said, “Looking forward, Ostem is targeting to expand its services to include design and installation/commissioning capabilities to service other industries and better utilise the capacity and capabilities that we have available in the plant.”

He noted that the group is using its Ostem business “as the nexus of its fabrication and machining services portfolio” to support mining and other industries in South Africa and Africa at large.

He added that Ostem could help South African companies meet their local content requirements and reiterated the significance of local manufacturing, especially given the disruptions caused by the Covid-19 pandemic to global supply chains.

“Utilising the capabilities of a local contract manufacturer like Ostem will help reduce manufacturing lead times. Local manufacture also eliminates the risk of uncertainty related to shipping periods,” he said.

Armed with a large site that covers 12.9 hectares with 28,000m² under roof, Ostem has the capacity to provide contract manufacturing services to companies of all sizes. The company’s facility has a maximum lift capacity of 80t and can accommodate fabrications of up to 30t and machining jobs of up to 40t and 6m in diameter.

This, according to Ostem MD Sean O’Connor, is believed to be one of the few contract manufacturing facilities in the country with this capacity. The company also has a wide variety of machines that can accommodate much smaller jobs.

Operations at the Vereeniging, Johannesburg, site started in 1957 as a ferrous foundry. There have been changes in ownership since then, until more recently the site comprised four operations owned by Metso South Africa, now part of the Metso Outotec Group. Ostem purchased the ISO9001 accredited fabrication, machining, assembly and repair portion of the business from Metso Outotec on 1 November 2020.

Ostem is now operating as an independent concern. With the management team and employees being retained under a Section 197 transfer, thus keeping expertise intact. The transaction also included a supply agreement with Metso Outotec, where Ostem provides local contract manufacturing services to the international conglomerate. This initially focused on crushing and screening and has now expanded to include Metso Outotec’s local pump assembly.