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Piping The Liquid Asset

Written by John O’Hanlon & Produced by Oliver Bishop

Flexicon Piping Specialists acquired by the First Tech Group in 2005, is a leading supplier, fabricator and installer of high-density polyethylene (HDPE) thermoplastic piping and fitting systems. With a total of 390 employees, Flexicon has identified the advantages of using anti-corrosive and lightweight thermoplastic instead of steel.
Piping The Liquid Asset

Flexicon Piping Specialists acquired by the First Tech Group in 2005, is a leading supplier, fabricator and installer of high-density polyethylene (HDPE) thermoplastic piping and fitting systems. With a total of 390 employees, Flexicon has identified the advantages of using anti-corrosive and lightweight thermoplastic instead of steel.

Flexicon’s expertise lies chiefly in high-density polyethylene (HDPE), a thermoplastic derived from petroleum with a global market of over 30 million tonnes a year. Its hardness makes it particularly suitable for use in industries with demanding substances to pump, like chemicals and oil: its resistance to abrasion has made it the material of choice in the mining industry, which frequently has slurries to deal with that contain aggressive minerals and rock particles. Flexicon offers comprehensive piping solutions within the mining, industrial, civil, power generation and steel plant sectors as well as in the field of water, slurry and gas distribution.

Craig Hanekom grew the company until 2005, when it was sold to the First Tech Group, a diversified industrial company with 12 divisions of which Flexicon is one. “Since we joined the First Tech Group, the company has gone from strength to strength,” says Hanekom, who remains CEO of the company he founded.

One immediate market advantage the move delivered, was a level 3 BBEEE rating, and other synergies and rationalisation resulted from coming under the umbrella of a larger organisation – for example the manufacturing plant 60 kilometres from Johannesburg at Meyerton is now run, exclusively for Flexicon, by another division of the group which specialises in extrusion technology.

Since 2005 a great deal of investment has taken place at Meyerton, including the addition of new high density polyethylene extrusion machines that can produce pipe, anything from 50mm to one metre in diameter. The facility comprises 112,000 square metres of factory and office space and has recently invested in four new extruding lines, bringing the total number to ten. Only virgin PE100 material is used at Meyerton to manufacture Flexicon’s high quality HDPE pipe from raw materials imported from the UAE.

The hub
Flexicon House, the head office at Witbank, incorporates another factory and workshop employing 152 people that focuses on fittings and fabricated components. Here the company’s large range of specialized HDPE fittings is fabricated, and the manufacturing of seamless and segmented HDPE bends is carried out. Components also include valves and actuators; rubber products such as bends, mouldings and gaskets; stainless steel products including flexible hose, piping and fittings; steel piping and accessories; galvanised shouldered piping, and various clamps and jointing systems, to name only a few. Witbank is also the hub for the company’s domestic sales force, spread across five branches across South Africa, from Richards Bay in KwaZulu Natal to Port Elizabeth and Springbok in the Western Cape. This gives Flexicon’s 18 sales representatives immediate access to its customers in the mining, construction and civil engineering and, increasingly, industrial sectors.

South Africa’s heavy investment in infrastructure in recent years has provided valuable diversification opportunities from the mining sector, which continues to be the company’s core market. To these clients Flexicon offers a range of services, from simply supplying specified HDPE pipes and fittings to fabricating pipelines from detailed plans, turnkey piping projects and process plant piping and maintenance.

More clients are beginning to appreciate the advantages of plastic pipe over steel, says Hanekom. “Thermoplastic pipe can handle abrasive slurries, it is lightweight and easy to install, and the cost is very competitive especially when compared with steel piping.” A good example of this was a recent contract to supply and install pipework at Shell’s Gamba terminal in Gabon, involving the replacement of steel piping with HDPE.

A cost analysis of the product reveals that 82 percent of the value is in the raw material: it is a very lean production profile with very little opportunity for increased efficiency in logistics, manufacturing costs and other overheads. However it also means that the price of the product is vulnerable to fluctuations in the price of oil and to exchange rate volatility and offers are accordingly made on a 30-day fixed price basis.

Attractive contracts
This has not affected Flexicon’s ability to land some very attractive contracts both in its domestic market and in other African countries. South Africa’s electricity generating company Eskom is currently building four new coal-fired power stations,. The most modern of these at Medupi landed Flexicon a R40 million contract to supply and install fresh water and waste water services at the Marapong/Ellisras housing project for workers at the new power station. “Our pipe has been used in a tremendously diverse collection of projects over the years. We have supplied mining contracts in the Democratic Republic of Congo, Zambia and Angola to name just a few expanding markets,” says Hanekom. “Going forward, we are going to make a bigger impact on these markets, and in addition consolidate our relations with our blue chip clients within South Africa.”

One of the biggest current contracts is taking place at the heart of Flexicon’s home territory at Witbank. This is a R22 million contract for piping systems at the Douglas-Middelburg Optimisation (DMO) project, a $975 million scheme to develop new mining areas and a new 14 million tons per annum coal processing plant. The company is also busy with the R1.3 million renewal of tailings dams at Exxaro’s Namakwa Sands minerals mine, a pipework supply contract worth R6.6 million for Richards Bay Minerals and work to a value of R1.4 million at the Army Battle School at Lohatla in the Northern Cape.

Quality and safety
In 2009 Flexicon was accredited with ISO 9001:2008 by the standards agency TUV, which is based in Germany. Craig Hanekom is determined to maintain the highest standards of quality that could be demanded by his customers, and has introduced a forward-looking SHEQ (Safety, Health, Environment and Quality) system that integrates these functions and recognises their interdependence, instead of treating them as separate functions within the organisation. “SHEQ is intrinsically linked and you can’t isolate the different components without compromising the performance of the whole management system. We have a very committed management team to drive the SHEQ system.”

As part of the accreditation, TUV carries out annual audits and rigorous quality control is maintained both on incoming goods and fabricated items. “We carry our regular supplier audits to ensure that the goods they are sending us are of the highest quality,” he adds.

Flexicon Piping Specialists is also a member of the South African Plastic Pipe Manufacturers Association (SAPPMA), and is furthermore included on the SABS ISO 9001:2000’s Registered List of Suppliers after passing a capability assessment. The company’s HDPE pipe has additionally been awarded the SABS ISO 4427 mark.

The First Tech Group is now one of the three largest high-density polyethylene (HDPE) and polyvinyl chloride (PVC) piping manufacturers in South Africa, including its latest acquisition Gazelle and its existing piping divisions, Ogatin and Flexicon Piping Specialists.

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