Hulamin CEO on COVID-19 impact on the aluminium market

Aluminium supplier and exporter, Hulamin, has reported significant losses in its international and local market due to decreased export sales, with the group's headline earnings plummeting to a loss of R240 million. Hulamin CEO Richard Jacob recently sat down with CNBC Africa to discuss the abnormal circumstances that impacted the company's performance in 2019. Jacob highlighted the challenges faced in the United States market, where a long-standing partner was unable to purchase their products due to overstocking following President Trump's anti-dumping duties against China in 2018. This disruption resulted in significant slowdown in sales and growth in working capital for Hulamin. The US market, which typically represents 20-25% of their business, only accounted for 15% of revenue in 2019, showcasing the magnitude of the impact. Despite the challenges, Jacob remains optimistic that 2019 was the bottom of the curve and the company has already implemented turnaround actions to normalize operations. In addition to the struggles in the US market, the company also faced challenges in its home market, South Africa, due to the COVID-19 lockdowns. The complete closure of the plant following President Ramaphosa's announcement of the lockdown in March led to a sharp decline in demand both locally and internationally. However, Hulamin managed to secure essential service status and resume exports by the end of March. The lockdown measures have significantly impacted the demand in the markets, but the company's beverage can products have remained strong with high demand. Despite the financial challenges faced by Hulamin, Jacob reassured that the company entered 2020 with a strong balance sheet, boasting an 8% equity ratio. While they had to tap into their cash reserves earlier in the year, Jacob stated that it is unlikely for Hulamin to ask shareholders for additional cash at this point. The CEO remains positive about the future outlook for the company, believing that they have weathered the worst of the storm and are on the path to recovery. As Hulamin continues to navigate the turbulent market conditions brought on by the COVID-19 pandemic, the company remains resilient and focused on implementing strategic measures to stabilize operations and drive growth in the challenging environment.