South African electrical equipment manufacturer Actom has concluded a partnership agreement with global energy-management solutions group Schneider Electric, enabling the Boksburg-based entity to continue to produce, market and service Schneider’s medium-voltage distribution, automation and protection equipment locally.
Actom, which is the largest independent electromechanical manufacturer and repairer in South Africa, with yearly sales of nearly R8-billion, also secured the right to distribute and service the products in a number of other countries across the Southern African region.
The deal, which was signed formally on Wednesday, replaced a legacy arrangement between Actom and Areva, which was concluded prior to Areva’s 2010 disposal of its global transmission and distribution business – Schneider purchased the distribution unit and Alstom Grid the transmission business.
The new arrangement sustained a key product offering for Actom, while supporting Schneider’s localisation and market customisation ambitions in the medium-voltage milieu.
Schneider Electric’s medium-voltage executive VP Frederic Abbal, who flew in from France to initial the documents, said that the tie-up enabled the group to adapt its leading technology platforms and architecture to domestic market conditions and needs.
Actom CEO Mark Wilson said it also gelled with its strategy of satisfying a growing demand – particularly from its utility and municipal customers – for local value addition and job creation. But it also ensured that Actom was supplying its customers world-class products from a leading technology provider.
The South African entity had similar arrangements in place with various Alstom units, Fläkt Woods, Parker and General Electric. Wilson said the partnerships had laid the basis for investments of R2.9-billion since 2009, when the company also changed its corporate identity from Alstom Electrical Industries to Actom following an ownership overhaul.
UK private equity company Actis remained Actom’s single-largest shareholder with 35%, followed by Old Mutual (20%), Kagiso Tiso Holdings (19%), management (17%) and black individuals and management (9%). Wilson said that it was in the processes of debating the future role of the financial investors in the company, while it also pursuing an aggressive strategy to expand into the rest of Africa.
Schneider Electric country manager Carl Kleynhans said discussions on a deal to succeed the Actom-Areva arrangement, which expired in July, had been under way since 2010.
He said the fact that Schneider had an in-country presence made it necessary to make adjustments, but he was convinced that the new arrangement would benefit both companies and its South African customers.