http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.53Change: 0.02
R/$ = 12.17Change: -0.01
Au 1173.05 $/ozChange: -1.46
Pt 1078.50 $/ozChange: -1.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 26, 2011

AECI eyes bigger move into Brazil, also keen on Nigeria expansion

Back
AECI CEO Graham Edwards discusses the company's growth strategy and the competitive business environment. Camera Work: Nicholas Boyd. Editing: Darlene Creamer.
 
 
 
Engineering|Gold|AEL|AEL Mining Services|Ael-mining-services|Africa|Botswana|Building|Copper|Diamonds|Environment|Explosives|Fire|Gas|Industrial|Mining|Platinum|Africa|Explosives|Manufacturing|Oil And Gas|Products|Services|Operations
Engineering|Gold|AEL|AEL Mining Services|Ael-mining-services|Africa|Botswana|Building|Copper|Diamonds|Environment|Explosives|Fire|Gas|Industrial|Mining|Platinum|Africa|Explosives|Manufacturing|Oil And Gas|Products|Services|Operations
engineering|gold|ael|ael-mining-services|ael-mining-services-company|africa-company|botswana|building|copper|diamonds|environment|explosives|fire|gas|industrial|mining|platinum|africa|explosives-industry-term|manufacturing|oil-and-gas|products|services|operations
© Reuse this



Acquisitions would play a key role in chemicals and explosives company AECI’s growth strategy, with Brazil and Nigeria key focus areas, CEO Graham Edwards said on Tuesday.

In an interview with Engineering News Online, he said that acquisitions worth about $150-million "may be" in the pipeline in Brazil’s chemical sector in the future. “We have been in Brazil in the past four years, have learnt lessons and are at a point where we believe we can now make a bigger move into Brazil.”

But, Edwards described a move into Brazil as “opportunistic” in nature, as most of the businesses were fully priced, and as such, any strategic move required a business model that would add value.

The company is also focused on expanding into Africa, where Edwards identified significant opportunities to grow and develop the chemical business, particularly in the oil and gas rich nation of Nigeria.

“Nigeria has a growing middle class and a robust economy – there can be opportunities for us to grow by acquisition.”

The JSE-listed group delivered a stronger performance in the first six months of the year, despite volatile trading conditions in both the mining and manufacturing sectors. AECI posted headline earnings of R284-million, an 11% improvement from the corresponding period of 2010, and profit from operations was 13% higher at R546-million.

Assisted by global increases in commodity prices but tempered by the continued strength of the rand, which averaged R6.88/$ in the half-year, revenue from continuing operations increased by 10% to R5.97-billion.

The strength of the rand continued to be a challenge for customers, but AECI said it would continue to be cost effective as it competes against imported products.

“We believe in ramping up plants and getting margins through, the rest of the business can remain stable with underlying growth from the new plants,” Edwards explained.

With regard to mining, CFO Mark Kathan said the company expected growth across all regions, with commodity demand remaining sound in both industrial and investment sectors.

AEL Mining Services MD Tobie Louw indicated that the competitive mining market would remain challenging, but pricing would remain soft, with deep level mining volumes to remain under pressure.

But, despite the continued decline in South African deep level mining, AEL Mining Services experienced strong growth in the surface and massive businesses servicing the platinum, diamonds and chrome mining sectors.

AEL’s revenue was 11% higher than 2010 at R2.54-billion, driven by a 16% escalation in ammonia prices, which also resulted in higher working capital levels. Overall volumes grew by 2.5%, and profit from operations improved by 8% to R200-million.

“The mining services environment has become more competitive and a substantial portion of AEL’s business was subjected to tender processes in the half year,” the company said.

However, AEL said it was able to retain more than 90% of its business and the market share changes did not impact performance for the period.

In the rest of Africa, good growth was delivered by the copper mining sector in Central Africa and diamond mining in Botswana continued to perform creditably, the company said. But, the contribution from gold mining in West and East Africa remained flat.

Meanwhile, the higher demand for shock tube, the building of inventories and fire on a conventional plant has slightly delayed the processes for retrenchment of employees from conventional shock tube manufacturing facilities.

Edwards described growth in South Africa’s manufacturing sector as sluggish, but positive. While the company expected its operational performance in the second half of the year to be [historically] better than

the first quarter, it said results could be affected by the current labour unrest and tightening of market conditions.

Meanwhile, the company entered into a R1.2-billion broad based black economic-empowerment (BBBEE) transaction comprising permanent employees and a community trust that would fund educational and developmental initiatives.

The JSE-listed group, which delivered a stronger performance in the first six months of the year, said on Tuesday the BBBEE transaction would advance its empowerment aim of increasing black participation by a broad spread of South Africans.

The deal, which takes AECI’s BBBEE equity ownership up to 27.4% with regard to the BBBEE Codes of Good Practice, will have a maximum term of ten years and participants will receive a dividend from the first year.


 

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Chemicals News
Rod Humphris
Despite a tough financial year, marked by weaker performance in its mining division and a flat performance in its chemicals division, owing to a struggling manufacturing sector, JSE-listed chemicals company Omnia achieved a 3% increase in headline earnings a share to...
South African explosives and specialty chemicals group AECI has entered into an agreement to acquire Malawi-based agrochemicals, seeds and spraying equipment distributor Farmers Organisation Limited (FOL) from Rendale Holdings for an undisclosed amount. This formed...
ADVANCED MANUFACTURING Metallica Chemicals aims to use knowledge gained at Manufacturing Indaba to improve its production processes
Drying catalysts and resins manufacturer and exporter Metallica Chemicals aims to use this year’s Manufacturing Indaba to identify and understand the key drivers of growth in the manufacturing industry from industry leaders at the event, says Metallica Chemicals  MD...
More
 
 
Latest News
Updated 5 hours ago Gauteng Premier David Makhura recommitted the provincial government’s support to the revival of Gauteng’s manufacturing base, telling the second yearly Manufacturing Indaba on Tuesday that policymakers would drive legislation that created an environment in which the...
The Competition Commission has reached a settlement agreement with Japanese shipping liner Nippon Yusen Kabushiki Kaisha (NYK) for contravening the Competition Act in the transportation of motor vehicles to and from South Africa by sea. This settlement followed the...
State-owned aerospace and defence technology conglomerate Denel on Tuesday launched a book to demystify defence technology to South African learners and attract them to the defence industry’s career opportunities, while creating greater awareness about innovation and...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
JSE-listed Afrimat will make a cash offer to acquire the entire remaining issued share capital of subsidiary Infrasors that it does not already own.
TEAMWORK Aggreko Europe, Middle East & Africa MD David Taylor-Smith; Aggreko Zambia chairperson Dr. Sixtus Mulenga; Aggreko Africa MD James Shepherd
Temporary power generation services provider Aggreko announced earlier this month that it had appointed Dr Sixtus Mulenga as nonexecutive chairperson of Aggreko Zambia, a move it believed was integral to the ongoing expansion of its operations in Zambia and the rest...
Major global aircraft manufacturer Airbus Commercial Aircraft is maintaining a steady course. "I don't have any big news, good or bad," company President and CEO Fabrice Brégier told international aviation journalists in Toulouse, France, at the company’s recent...
MEASURING DEVICES Bosch has released a mobile app that enables the measurements made with measuring devices to be sent and used directly on the app for accuracy and on-site quoting
Industrial tool manufacturer Bosch has increased the compatibility of many batteries in its range of blue industrial power tools and has released mobile-device applications (apps) for users of the tools, says Bosch South Africa training manager Peter du Bruyn. Many...
The new Nissan Navara has been launched onto the global market, but Nissan South Africa (NSA) will only know in August whether the local Rosslyn plant will assemble the one-ton pickup. The NSA plant currently produces the old NP300 Hardbody one-ton bakkie, as well as...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96