Facility set to boost skills, grow industry after slump

10th March 2017

By: Victor Moolman

Creamer Media Writer


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Valves manufacturer AVK Southern Africa’s new R200-million training academy, in Alrode, Gauteng, will train 1 500 people by the end of the year.

AVK Southern Africa director Patrick Jantjies explains that the company wants to improve the skills of workers in the valves industry to help it grow after the recent commodity slump. Currently, students from the University of Johannesburg, several technical schools and people employed by the valves industry are being trained by AVK.

The facility, launched in September last year, is expected to enable AVK, part of Denmark-based valves manufacturer and supplier AVK Valves, to grow further in the sub-Saharan Africa valves market, where the mining industry accounts for 20% of AVK sales.

“Therefore, the mining industry is a big market for us, which is why we plan to entrench ourselves in industries such as steel, iron-ore, gold, platinum and uranium by providing valves at a competitive price.”

Jantjies says, during the commodity slump, which started in 2015, AVK focused on becoming a strong competitor in these industries, which it believes will experience a “quantum leap” in terms of growth in the near future, with the immediate commodities market increasing, thereby allowing for incremental growth in the valves industry.

However, he points out that trying to operate in certain South African industries has been challenging, as AVK does not comply with all the broad-based black economic-empowerment (BBBEE) regu- lations that have been put in place by government.

“As an international company, we have been challenged to meet the requirements of South Africa’s BBBEE regulations because we are not 51% black-owned. As a result, our business in the country has been strained, but we have managed to come up with a small to medium-sized enterprise strategy to overcome these challenges by buying existing South African companies.

“Part of this strategy is the acquisition of Netherlands valves producer Wouter Witzel EuroValve, which is a well-established business globally . . . and has BBBEE-compliant branches in South Africa,” Jantjies notes.

The acquisition of Wouter Witzel, as well as the AVK Valve Alrode training facility, has led to AVK Valves’ landing a contract with State-owned power utility Eskom to supply valves to coal mines and certain power stations. Jantjies explains that, as a result, the coal mines supplying Eskom’s power stations have become a primary focus for the company following the conclusion of the contract last year.

The company attributes its continued growth in South Africa to concurrent deals with mining companies, such as platinum miner Anglo American Platinum, platinum producer Lonmin and gold producer Sibanye Gold.

“We are fortunate that we supply a spectrum of valve types, including slurry, water distribution, water reticulation, above-ground and underground valves, as this enables us to expand into new markets when times get tough. The gold and platinum mines kept us going during the recent commodities downturn, as gold and platinum are still strong commodities in terms of demand and price,” Jantjies says.

Another factor aiding AVK’s sustainability is its valves manufacturing facility, which was built in Alberton, Gauteng, in 2014 and enabled the company to readjust some of its valve prices to remain a competitive supplier in the cost-conscious local mining industry.

Sub-Saharan Africa is a large market in which Jantjies says AVK will continue to grow, with the company’s Alrode factory the largest of its kind in the southern hemisphere. The company currently has a market share of more than 60% on the African continent.

Jantjies points out that, last year, the continued growth of AVK Valves enabled the company to acquire valves producer Gunric Valves, in the US. This has boosted the company’s valve production capabilities and follows its mid-2014 acquisition of Alberton-based valves producer Premier Valves.

AVK consists of more than 80 com- panies worldwide, with each company conducting its own research. “As a group, we allocate 15% of our yearly profits to new production processes to improve our businesses.”

Edited by Tracy Hancock
Creamer Media Contributing Editor


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