Astore MD Ben Levitas says that all nine branches of Astore Africa will operate as a separate division of Hudaco Trading, the entity within Hudaco Industries that introduced 15% black economic empowerment shareholders, which, together with the existing mandated investments, now has 25% black ownership. The total cost to Hudaco, which excludes working capital requirements, is R115-million, of which R20-million is deferred over the next two years.
He says that the acquisition will benefit customer growth of Astore Africa.
"We believe that Hudaco will benefit Astore through improved customer growth, owing to the increased exposure and added credibility of a listed company. On the other hand, brand recognition of Astore's products are already firmly established from its overseas suppliers, who are all well-recognised manufacturers themselves," Levitas explains.
Hudaco's head of chartered acquisitions Gary Walters says that the company's expectation of Astore's products is that the sales of the division should increase, owing to increased product lines.
He says that the current energy and steel shortages should not have a too-adverse effect on the company's production.
"About 5% of Astore sales are from locally manufactured products. To this extent, Hudaco believes that with effective planning and scheduling of the factory, the impact on the output of the factory will be minimal. In terms of the balance of sales, which are either imported or sourced locally, we believe the only impact could be from reduced demand from the end users who downscale their operations owing to the energy or steel shortages," Walters comments.
Levitas says that the bulk of Astore's products are sold locally, although some products are locally sold in bulk before being exported and resold.
Astore serves most industries in South Africa, including mining, manufacturing, petrochemicals and agriculture.
The company was established in February 1985, and has become a recognised supplier in Southern Africa of a range of thermoplastic pipe fittings, valves and pipeline accessories in all recognised materials for most areas of usage in the markets for plastic pressure pipeline systems.
Hudaco Industries is a South African group of companies specialising in the importation and distribution of selected industrial and security products in the South African region. The group is active in three main areas, which include bearing and power transmission products, powered products, and security equipment.