http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.85Change: 0.07
R/$ = 10.94Change: 0.08
Au 1231.30 $/ozChange: 2.49
Pt 1250.70 $/ozChange: -2.30
 
 
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 Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 25, 2012

AECI focuses growth on Mozambique, West Africa

Back
Engineering|Gold|Johannesburg|AECI|AEL|AEL Mining Services|Ael-mining-services|Africa|CoAL|Copper|Explosives|Industrial|Platinum|Property Development|Africa|Latin America|South America|Cameroon|Mauritania|Mozambique|Niger|South Africa|Chemicals|Explosives|Explosives Manufacturer|Industrial Chemicals|Manufacturing|Mining|Property Development|Services|Speciality Chemicals|Still-lagging Manufacturing Sector|Graham Edwards|Iron Ore|Mark Dytor|Schalk Venter|East Africa|Southeast Asia|West Africa
Engineering|Gold||AEL|AEL Mining Services|Ael-mining-services|Africa|CoAL|Copper|Explosives|Industrial|Platinum|Property Development|Africa|||Explosives|Manufacturing|Mining|Property Development|Services||Iron Ore||
engineering|gold|johannesburg|aeci|ael|ael-mining-services|ael-mining-services-company|africa-company|coal|copper|explosives|industrial|platinum|property-development-company|africa|latin-america|south-america|cameroon|mauritania|mozambique|niger|south-africa|chemicals|explosives-industry-term|explosives-manufacturer|industrial-chemicals|manufacturing|mining|property-development|services|speciality-chemicals|still-lagging-manufacturing-sector|graham-edwards|iron-ore|mark-dytor|schalk-venter|east-africa|southeast-asia|west-africa
© Reuse this



Industrial chemicals and explosives manufacturer AECI was assessing more opportunities for its explosives business AEL Mining Services in Mozambique and West Africa, CEO Graham Edwards said Wednesday.

This formed part of AECI’s growth strategy in the rest of Africa and further afield.

At the company’s six-month results presentation, in Johannesburg, he told Engineering News Online that AEL was aiming to tap into the developing Mozambican coal sector and the growing iron-ore sector in West African countries, including Mauritania, Cameroon and Niger.

“Up until now, our growth has been in gold in West Africa, but now new iron-ore deposits are being developed and coal will become big in East Africa, in Mozambique,” he noted.

AEL Mining Services MD Schalk Venter stated the company was also focusing on its continued growth in South East Asia, as well as expanding its electronic detonators market in Latin America.

Currently, 54% of the group’s revenue was generated from mining, and with the sector declining in South Africa, AECI chemicals executive Mark Dytor said the company would, over the next 18 months, focus on expanding its special chemicals business into Africa where mining activity was soaring.

AECI was also still perusing its Brazilian strategy and had visited more than 20 potential targets for acquisition in that country’s speciality chemicals sector.

Further, South Africa’s still-lagging manufacturing sector and expectations of slow growth ahead, also motivated AECI’s redirected focus to the rest of Africa and South America. Manufacturing accounts for 35% of the group’s revenue.

Meanwhile, despite volatile trading conditions and operational issues in some of its key businesses during the first six months of 2012, AECI’s revenue increased by 17% to R6.95-billion. This was owing to an increase in ammonia and chemical commodity prices in the first quarter, a weaker rand/dollar exchange rate and volume growth of 8.2%, owing to acquisitions made in 2011.

Headline earnings declined by 58% to R120-million, mainly owing to International Financial Reporting Standard charges of R148-million pursuant to the broad-based black economic-empowerment transaction concluded earlier this year. This also resulted in headline earnings per share falling by 59% to 108c a share.

Explosives revenue from AEL was 14% higher at R2.91-billion, as ammonia prices increased by an average of 14% and AEL’s overall volumes improved by 4.2%.

However, profit from operations declined by 8.5% to R183-million, while the operating margin deteriorated to 6.3%, down form 7.9% last year.

AEL’s working capital increased owing to the importation of ammonia and ammonium nitrate at an additional cost of R35-million in response to ammonia supply constraints.

A planned shutdown of No 11 nitric acid plant, at Modderfontein, caused further buy-ins at a cost of R15-million.

In AECI’s specialty chemicals division, revenue increased by 20% to R3.95-billion, also pushed up by volume growth, the weakening of the rand and higher chemical commodity prices. Profit from operations was 6% higher at R411-million and the operating margin was 10.4%.

In the company’s property business, operating profit decreased by 42% to R21-million, as no property sales were finalised in the period.

AECI stated that the property development market remained muted except for specific well-located areas, but Edwards maintained that the prospects for property sales were improving.

OUTLOOK

The company’s outlook for the explosives and mining chemicals sectors remained promising.

Edwards indicated that sales volumes were expected to be stable, despite the global slowdown. Gold, coal, copper and iron-ore mining in the rest of Africa was expected to be robust, while platinum and gold mining in South Africa would continue to decline.

AECI’s focus for the rest of the year would be on improving internal efficiencies, including working capital, and on optimising operating platforms.

“There is significant potential for improvement in operations and internal efficiencies in explosives and specialist chemicals; however, restructuring charges are likely to be incurred,” Edwards warned.

The board declared an interim cash dividend of 78c a share for the period under review.
 

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Chemicals News
EXPANDED OFFERING ImproChem concluded the purchase and integration of Swiss speciality chemicals company Clariant’s African water treatment business on July 1
JSE-listed speciality chemicals group African Explosives and Chemical Industries’ (AECI’s) wholly owned water, energy and air solutions subsidiary ImproChem recently expanded its technology offering and market reach to provide water, energy and air quality management...
INDUSTRY FIRST The Metal-Safe personal protective garments are made from Lenzing FR, antistatic, high-strength synthetic and other fibres
Local specialised protective-clothing manufacturer Charnaud introduced its new Aci-Flam and Metal-Safe ranges of protective clothing to industry last month. Charnaud supplies products and specialised footwear to industries dealing with, for example, hot-metal...
Article contains comments
More
 
 
Latest News
Updated 4 hours ago Swedish Ambassador to South Africa Christian Meuwly will next week inaugurate the final roll-out of the new vertical shaft brick kiln (VSBK) at clay brick manufacturer Langkloof Bricks’ facility in Jeffrey’s Bay. The VSBK formed a part of economic, social and...
Updated 4 hours ago Hot on the heels of the launch of Rustenburg’s rapid transport system’s brand name and logo last week, a negotiation framework agreement (NFA) has been formally agreed to and signed by the Rustenburg Local Municipality (RLM) and taxi and bus operators affected by the...
Updated 4 hours ago The runway at the George Airport, in the Western Cape, has been rehabilitated to improve safety, in terms of run-off and storm water drainage, and the structural capacity of the pavement surface. The scope of work comprised the extension of Runway 11/29, the...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
Integrated energy and chemical company Sasol has partnered with Unisa Graduate School of Business Leadership (SBL) professor and founder and CEO of PanAvest Partnership Dr Douglas Boateng to publish a series of books on executive supply chain management aimed at...
MORNÉ DU PLESSIS Increased urgency and burgeoning awareness of the importance of these issues are beginning to change political risks and, thus, State responses to environmental concerns
The World Wide Fund for Nature’s (WWF’s) 2014 Living Planet Index (LPI) indicates that there has been a 52% decline in vertebrate species since 1970. The Index tracked the trends of 10 000 discrete populations of over 3000 vertebrate species between 1970 and 2010.
Rwanda has joined a number of East African countries seeking to import electricity from Ethiopia as its demand grows. After it became apparent several generation project it is implementing will not come on stream early enough, now plans to import 400 MW from Ethiopia...
Metrorail’s first new passenger train will arrive in November next year, says Passenger Rail Agency of South Africa (PRASA) CEO Lucky Montana. “Next year we will be able to put our hands around the infrastructure and equipment we have been talking about for so long.”
The Competition Commission has launched an investigation into what it says are “price fixing, market division and collusive tendering in the market for the manufacture and supply of automotive components to original equipment manufacturers” (OEMs, or vehicle...
 
 
 
 
 
 
 
 
 
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