Industrial chemicals and explosives manufacturer AECI would work “furiously” to pursue acquisitions in the rest of Africa and South America, CEO Mark Dytor said last week

The JSE-listed group, which was currently in talks involving four or five undisclosed potential acquisitions, noted that about 35% of group revenue during the six months to June 30 was generated outside South Africa.

The explosives sector, which delivered the “best first half” in terms of performance during the interim period, was “strategically” grown to ensure that almost 50% of current revenue was generated outside South Africa.

This comes as the local manufacturing and mining sector growth slows amid a challenging business environment.

AECI would enhance its African footprint in sectors such as mining services; food additives; agriculture; personal and home care; and the water, oil, energy and gas industries, he commented.

AECI was currently awaiting Competition Commission approval for the acquisition of animal health and nutrition firm SA Premix, which was expected to be concluded by September 1.

Dytor believed the acquisition would contribute R200-million to R250-million in turnover and R20-million to R25-million in profit a year.

Further, AECI had set its sights on another “interesting” acquisition in Brazil, after a promising deal with an undisclosed individual for a Brazil-based company fell through after 18 months of negotiations.

The South African company was also evaluating other alternatives in South America.

Meanwhile, subsidiary company AEL Mining Services (AEL) was successfully progressing several projects in Africa, as it geared up to deliver the first explosives to an Exxaro mine site in the Democratic Republic of Congo (DRC) this month.

AEL was mobilising its human resources and had delivered container magazines and a mobile manufacturing unit to enable the issuing of explosives permits to the mine.

This month would see the “official” commissioning of the plant at the Kansuki site, in the DRC.

Further, a licence to produce and use explosives at a Burkina Faso bulk emulsion explosives manufacturing plant was expected to be awarded by government within two weeks, with commissioning expected to start later this month.

In addition, AEL had completed work to assist in an expansion project at Centamin’s Sukari gold mine, in Egypt.

Significant progress had also been made with the KPC project, in Indonesia, where AEL’s contract had been extended until 2018.

Ammonium nitrate supply to KPC is expected to start in the fourth quarter of 2013, as the commissioning of the nitric acid plant and an ammonium nitrate solution plant in Bontang kicks off.

The AECI subsidiary entered the Indonesian market in 2009 and, last year, bought a 42% stake in Black Bear Resources Indonesia, which is building the plant, for $23-million.