Southern African industrial company Mergence Industrial Group (MIG) has increased its stake in precision sheet-metal and plate engineering company Lasercraft to 100%, as part of the group’s growth and expansion into the South African industrial sector.

The 100% shareholding will enable the group to expand its footprint in South Africa and rest of Africa industrial sectors through an organic and acquisition growth strategy in sectors that contribute to the industrialisation of the continent, says MIG chairperson Masimo Magerman.

This is also a strategic move that allows Mergence to diversify to other sectors of the South African economy in pursuit of its vision of being an investment holding company with direct interests in assets and companies in nultiple jurisdictions, he adds.

“Lasercraft’s uniqueness includes its control of the entire manufacturing process from design to raw material, through the various processes, to the finished product. It has the capability to design, cut, press, roll, bend, weld, machine, fabricate and do a complete product as well,” says Magerman.

The Lasercraft acquisition complements Mergence's industrial interests in BFG Africa, a composites manufacturer with a contract with Gibela Alstom Consortium that entails the cladding of the interiors of a fleet of 600 commuter trains.

“Most of our fibreglass panels for the locomotive and automotive space require metal brackets. Lasercraft is the biggest supplier to BFG, which, in turn, is the largest fibreglass company in Africa.

“It is also a supplier to global original equipment manufacturers such as Siemens, Alstom, Bombardier, GE and has a ten-year trainsets contract with Gibela and Alstom,” he says.

Further, the Lasercraft acquisition will give MIG requisite capacity and record to offer products and solutions to South Africa’s rail and automotive sectors and leverage South Africa’s localisation strategy.

Localisation is one of several tools in the Economic Reconstruction and Recovery Plan to improve the dynamism of the economy, promote investment, develop new markets, transform the economy, promote equitable spatial development, and contribute to the development of a capable State, Magerman says.

“Depending on what you are manufacturing and where the raw materials are procured, given that shipping and commodity prices have spiralled upwards, we produce cheaper than most of our global competitors.

“When prices normalise, we will continue to be competitive as we have gone up the operational efficiency curve and can pass relatively attractive pricing on to our clients. Our pricing regime allows for adjustments with the rise of global inflation and interest rates hikes,” he notes.

“We want to play our part in increasing South Africa’s manufacturing capacity which has been declining over the years. The re-industrialisation of South Africa is a prerequisite to economic growth and job creation, and that requires patient capital and entrepreneurs with foresight to build for the future. That is what drives us,” says Magerman.

Further, the founders of Lasercraft will remain in the business on the engineering side to provide support for future innovation and contribute to skills development.

The acquisition also includes the company's management team who will remain and continue the transformation and gender representation programme it has embarked on, which has become a serious internal priority, he added.

Mergence had previously held a 60% stake in Lasercraft, which is 51% owned by black women, thereby making MIG one of the largest black-owned and managed diversified industrial groups in South Africa, the company says.