Trauma of an unplugged future

THE sound of silence.

This is how Bayside employee John Platt describes the surreal moment when staff were told their employer would be ceasing production at the ageing aluminium smelter in Richards Bay.

Sitting motionless, he and his colleagues were devastated – and then fear about their future gripped each one.

A week later, in an exclusive interview with the Zululand Observer, a sombre Platt said he had not slept since the announcement, ‘mourning the loss of a living being’.

‘The uncertainty is traumatic. Bayside is living for now, but when they turn the power off, it will be dead. This company gave me everything I have today – food on my table, a roof over my head and a bed to sleep on every night. It opened doors for me,’ said Platt.

The 57-year-old compared the closure of the BHP Billiton smelter to that of a terminally ill patient.

‘You know death is inevitable, but when the moment arrives to pull the plug, it is devastating nevertheless. It’s not easy to tell people you are going to be retrenched. Telling my wife the news was the most difficult thing for me to do.’

Reminiscence

Lost for words, the teary-eyed grandfather reminisced about the past 32 years at Bayside where he climbed the professional ladder.

‘I started off as a fitter on 1 September 1981. The first day at work, I said to myself I would not last a week here. I was like an Englishman in New York among the Afrikaners.

‘But the people were magic and Bayside introduced me to friends for life. When the company opened, about 2 500 employees were employed and it gave the tiny place of Richards Bay the industrial boost it needed.’

From fitter, he was eventually promoted to supervisor and moved to

the machine shop before becoming a specialist in the finance department.

The father of three and grandfather of five might not know what the future holds for him, but whatever happens, the memories of Bayside will forever be etched in his heart and mind.

‘I compare Bayside to the lyrics of the song ‘This old guitar’ written by John Denver: ‘This old guitar taught me to sing a love song. It showed me how to laugh and how to cry. It introduced me to some friends of mine. This old guitar gave me my lovely lady. This old guitar gave me my life my living. All the things you know I love to do…..’

23 JANUARY 2014

Unions pray for Bayside lifeline

UNIONS remain hopeful a last ditch attempt to possibly salvage a struggling Bayside Aluminium may be the only option to minimise the impact of mass job losses.

On Tuesday, the National Union of Metalworkers of South Africa (Numsa) told the Zululand Observer that Hulamin, a manufacturer of finished aluminum products, had expressed ‘interest’ in purchasing the local BHP Billiton aluminium smelter.
This followed an announcement last week of an imminent shutdown of Bayside’s remaining potlines effectively ending aluminium production at the ageing smelter.
Numsa Regional Secretary Mbuso Ngubane said they would welcome a possible takeover deal from Hulamin.
‘We do hear they have an interest in buying the smelter,’ said Ngubane.

‘Numsa has members at both operations and will negotiate with Hulamin in this regard. We will look at any avenue to save jobs. A number of small suppliers are dependent on Bayside and if there is a private partnership or investor who can save the company, we will pursue this option. We will also consider the dynamics in the global economy and whether there is demand to influence supply,’ said Ngubane.
Hulamin sources around one-third of its rolling slab requirements from Bayside amounting to 100% of product output from Bayside.
However, Hulamin dismissed speculation of a possible takeover on Wednesday, referring the query to BHP Billiton.
‘Hulamin is engaging with BHP Billiton around continued supply of rolling slab from the Bayside cast house,’ Hulamin Group Corporate Affairs Executive, Hector Molale told the Zululand Observer.

Meanwhile, Head of External Affairs at BHP Billiton Aluminium SA, Aroon Patel said a process to cease smelting operations at Bayside’s Reduction A and the carbon production area had already commenced.

‘This process includes the continued operations of the Bayside cast house to produce value-added products. We will continue our engagements with all stakeholders to ensure a sustainable aluminium business in Richards Bay,’ said Patel.Formal consultation meetings with unions have also been scheduled for early February.
‘Recognised unions NUMSA and Solidarity as well as Employee Management Team representatives will form part of the consultative process. It is a difficult time for everyone at the smelters and Aluminium SA has instituted support mechanisms to provide ongoing support,’ said Patel.

Suppliers told the Zululand Observer they had now entered a period of ‘uncertainty’.
‘A lot of people have been associated with Bayside since 1971 and this will have a major impact on the local community. However, we remain positive that with Hillside open there will be work available. We fully support BHP Billiton in their thinking and understand their unfortunate predicament,’ said a local Bayside supplier.

20 JANUARY 2014

Bayside potline closure to release bulk power to Eskom

THE decision to cease smelting activities at BHP Billiton’s Bayside operation in Richards Bay, will contribute significantly to alleviating South Africa’s nagging power constraints.

Thursday’s gloomy announcement for locals that potlines at Bayside would be shut down in the next few months, was offset by spin-off that Eskom will benefit from an extra 160 megawatts on the national electricity grid.

However, when addressing stakeholders, Asset President at BHP Billiton Aluminium SA, Lucas Msimanga said strengthening the Richards Bay aluminium business – not the power relief – was the motivation for the decision to exit in a responsible manner.

‘Bayside has been in the red for more than 18 months.

‘We needed to protect what we have and ensure Hillside remains competitive and sustainable.

‘We could not continue to overrun an ‘end of life’ business.

‘There was no serious interest from buyers and we knew this day was coming.

‘We had to face reality and could not bury our heads and deny the fact that Bayside was running at a loss,’ Msimanga said.

The jobs of about 400 people are impending as a consultative process with unions and stakeholders continues over the next three months.

While somewhat expected, there was an overwhelming feeling of sadness, anxiety, concern and fear from employees, suppliers and vendors on hearing the news.

‘People were shedding tears as they have a strong emotional connection with Bayside.

‘We are entering into tough territory with people worried about their future and our first priority is to support leaders who will be able to assist staff,’ said Msimanga.

Bayside, which employs some 500 personnel, is the only Southern African producer of value-added primary aluminium products, used for the local market.

Combined production from both smelters currently stands at 828 kilo-tonnes per annum. the company could not confirm whether Hillside would subsequently increase productionconce the potlines at Bayside close.

BHP Billiton first announced the review of its Bayside aluminium facility in September 2012 when the operation was under significant and ongoing financial pressure.

Head of Department of the Economic Faculty at the University of Zululand, Dr I Kaseeram said substantial increases in input costs such as electricity and labour had impacted heavily on manufacturing conglomerates.

‘It makes it unviable for local companies to compete with the emerging economies of China and India, who had planned way in advance to overcome input costs.

‘The news of Bayside and subsequent job losses is a huge blow for the economic hub of northern KZN and the country as a whole.’

Kaseeram said the uThungulu District had to come up with alternative strategies to further develop the local economy.

‘There needs to be more tax incentives and flexible labour policies to attract businesses into industrial processing zones as well as a greater focus on other sectors like tourism.’

Signalling the volatility of the global market, Bayside’s announcement coincided with Alcoa, who announced on Wednesday it would be permanently closing the remaining two potlines at its New York smelter in the first quarter of this year. The aluminium maker, which has been affected by flagging raw aluminum prices, driven by global oversupply said potlines at its Massena East smelter were no longer competitive.

17 JANUAR 2014

Counsellors to support Bayside staff

FOLLOWING the shock announcement that potlines at BHP Billiton’s Bayside smelter would shut down, intense discussions are underway to mitigate the impact of potential job losses.

Employees, stakeholders, suppliers and vendors were informed less than 24 hours ago that aluminium production at the Richards Bay smelter would cease in the next few months.

However, the company was not able to confirm the number of staff who would be possibly absorbed into Hillside or affected by expected retrenchments.

‘We will embark on a consultative process over the next three months and will have to look at various criteria and options,’ said Asset President at BHP Billiton Aluminium SA Lucas Msimanga.
‘This would include intense engagement with staff, assessing those who were close to retirement and others who could be absorbed into Hillside.’

It was difficult news to digest as employees expressed shock, sadness, anxiety and concern while others had a sense of relief during a briefing at Hillside Aluminium on Thursday afternoon.

‘People were shedding tears as they have a strong emotional connection with Bayside. We are entering into tough territory and our first priority is to support leaders who will be able to assist the staff under them. Counsellors are also on site to assist staff to ensure our people are emotionally dealing with the news,’ said Msimanga.

With Bayside running at a loss for the past 18 months, Msimanga said it was important to strengthen the aluminium business in Richards Bay by exiting in a responsible manner.

‘We needed to protect what we have and ensure that Hillside remains competitive and sustainable. We could not continue to overrun an ‘end of life’ business.’

Cast house
To support the ongoing supply to the local customers, the cast house within the Bayside operation will continue to operate with supply from the neighbouring Hillside smelter while further options are assessed for its future.

‘In this transition, we need to ensure that associated industry is protected. The survival of Hillside depends on the sustainability of these contracts. Our vision is to maximise what we can get out of the cast house. It this vision is realised, there could be employment creation,’ said Msimanga.

Decommissioning and rehabilitation of the remainder of the Bayside site, if undertaken, would provide an additional source of employment for the duration of the project.

16 JANUARY 2014 

Bayside potlines to close

ALUMINIUM production at BHP Billiton’s Bayside smelter in Richards Bay is expected to come to an end in the next few months.

The sad but inevitable news was communicated to employees and stakeholders at a briefing at the Hillside smelter a few hours ago.

With the company being ‘in the red’ for the past 18 months, the announcement came as no surprise but was still met with shock, concern, tears and anxiety by the majority of staff.

Addressing stakeholders, Asset President at BHP Billiton Aluminium SA Lucas Msimanga said the decision was essential to ensure the future sustainability of the Hillside smelter instead of continuing to run a struggling ‘end of life’ business.

In September 2012, BHP Billiton announced the review of its Bayside aluminium facility in Richards Bay as the operation had been under significant and ongoing financial pressure.

As part of that process, BHP Billiton today began a formal consultative process with employees on a proposal to cease smelting activities and associated services at Bayside. The company on Thursday was not able to confirm the number of staff who would be possibly absorbed into Hillside or affected by expected retrenchments.

‘Our aim is to minimise the impact of any changes on employees and the local downstream industry,’ said a company statement.

‘BHP Billiton has been in ongoing discussions with its stakeholders to discuss the challenges faced by the business, explore options for the Bayside operation and ensure a sustainable aluminium business can operate in Richards Bay.’

Cast house
To support the ongoing supply to the local customers, the cast house within the Bayside operation will continue to operate with supply from the neighbouring Hillside smelter while further options are assessed for its future.

Decommissioning and rehabilitation of the remainder of the Bayside site, if undertaken, would provide an additional source of employment for the duration of the project.

‘As we work through the consultation process, the health, safety and wellbeing of our people will remain a priority,’ said BHP Billiton South Africa Vice President Communications and Stakeholder Relations, Lulu Letlape.
‘We are focused on mitigating the impact of potential job losses while ensuring the existence of a sustainable aluminium business in Richard’s Bay.’

The decision to stop aluminium production at Bayside will in turn release approximately 160 megawatts of power back to Eskom’s electricity grid at no compensation to the company.

Bayside, which employs approximately 500 employees, is the only producer of value-added primary aluminium products in Southern Africa that is used for the local market.