JSE-listed chemicals manufacturer AECI’s acquisition of an explosives business near Lorena, in the Brazilian state of São Paulo, for $6.3-million, has been concluded.
The business was acquired out of business rescue and had been conditional on certain conditions precedent being fulfilled.
One such condition was the transfer of all operating licences to the AECI group.
The transfer was completed at the end of February and AECI expects to settle the purchase price by June 30.
The acquisition, from Brazil’s Dinacon, includes 100% ownership of a bulk emulsion and packaged explosives manufacturing plant, together with explosives operating licences, as well as distribution and storage facilities.
It is the first of its kind for AECI in Latin America and is considered to be a good growth platform for the group’s mining business in the rest of the region.
The acquisition is also in line with AECI’s plans to continue expanding the geographic footprint of its mining strategic growth pillar.
The Lorena facilities currently serve mainly the Brazilian construction and civil blasting industry and have had limited exposure to the large mining sector.
Under AECI’s ownership, there are significant opportunities to grow the business by leveraging the group’s experience in underground and surface mining, as well as its relationships with global mining customers, AECI said on Wednesday.
AECI already has a presence in Latin America, where the key focus to date has been on mining chemicals and plant health solutions for those markets.
The acquisition of the explosives business represents a step-change in the group’s investment in the region.