South African chemicals group AECI is investing $31-million, or about R505-million, in two strategic growth projects that are expected to double the profitability of AECI Schirm USA on an ongoing basis moving forward.
The investments build on AECI Schirm USA’s growth trajectory of the last two years and are being funded from the business’s cash reserves and future cash generation.
AECI Schirm USA is a contract manufacturer for the crop protection industry.
An established site in Ennis, Texas, logistically services the US Southwest and a newly acquired site in Benton, Illinois, logistically services the US Midwest, which the company says is widely regarded as “America’s breadbasket”, owing to the large volumes of corn, soybeans and wheat that are farmed there.
After repeated enquiries from customers who sell their products globally, including the US as a whole, AECI Schirm USA acquired the site in Benton as an existing industrial facility from Bio Fuels by American Farmers & Veterans for $2.3-million in 2021.
The first of the two strategic growth projects, with both scheduled for completion before the end of the year, is a production capacity expansion at the Ennis site.
For this, four new plants will be built – one herbicide suspension concentrate (SC) plant, one insecticide emulsifier concentrate (EC) plant and two insecticide SC plants.
The second project is the production capacity expansion at the Benton site.
For this, two new herbicide plants – one EC plant and one SC plant – will be built.
“The US is a major player in the global agriculture industry with over 913-million acres of cultivable land and natural farmland.
“To ensure project success and reduce risk, we are investing in partnership with AECI Schirm USA’s strategic customers who are committed to shared growth in the long term, which is the essence of AECI’s customer-centricity approach globally,” says AECI CE Mark Dytor.