In a move that will ensure valve manufacturer AVK South Africa’s compliance with the Department of Trade and Industry’s (DTI’s) new designation law that requires State-owned companies (SOCs) to buy locally manufactured products with a 70% local content, AVK South Africa’s parent company, Denmark-headquartered AVK, has acquired a majority stake in South Africa’s Premier Valves Group (PVG) for R100-million.

While PVG is one of South Africa’s most established valve suppliers, having supplied components to several large-scale local power station and water infrastructure projects, cheap imports from China prior to the introduction of the DTI’s designation scheme had “forced” the company to downsize and import valves to survive.

In a jolt to PVG’s operations, its factory, in Johannesburg, would now be upgraded with new machines, facilities and buildings, creating 80 new employment opportunities.

PVG’s range of products would continue to be marketed under its own brand.

AVK would also set up a resilient seal valve (RSV) manufacturing unit at the Alrode-based facility, producing up to 80 000 RSVs a year.

The investment would also fund the introduction of a new international standard for local production capacity at the facility in support of the DTI’s designation policy, introducing the latest international production technology and green processes to the South African industry.

AVK director Tjaart van der Walt said increased local production stemming from AVK’s investment was expected to have a sales value of up to R400-million a year – this being the value of import substitution plus additional exports delivered through AVK’s international sales network.

“This attests to the efficacy of DTI policy aimed at reindustrialising South Africa to meet the requirements of its SOCs and infrastructure spend by providing large volumes of world-class, competitively priced valves locally, defraying concerns over quality, capacity and delivery time,” he noted.

AVK was also considering the feasibility of establishing an advanced green foundry in South Africa, offering the potential for a further R300-million investment.

Current PVG MD Peter Thomson would remain in his position but would also occupy the role of director of AVK Holdings Southern Africa.

Brian McGugen had been appointed as the new MD of AVK Southern Africa.

The two companies would work closely together to expand and strengthen the overall position of AVK in the Southern African market.

AVK is one of the world’s largest valve manufacturers with factories in nine countries. It has a net turnover of around R6.4-billion and is present in 80 countries.