JSE-listed materials supplier Afrimat has acquired clinker processor Clinker Supplies in a R123.5-million deal.
The Clinker Supplies group includes the businesses of Clinker Supplies and SA Block.
Afrimat CEO Andries van Heerden says the acquisition is in line with his company’s strategy of seeking out new avenues of growth, and presents Afrimat with a “unique opportunity to generate further revenue opportunities through new product development, as well as a refined, focused marketing strategy”.
The Clinker Supplies group has a profit after tax of around R30-million, which would equate to a return on equity for Afrimat of about 24% a year. The acquisition also provides Afrimat with a hedge against the volatile cyclicality associated with the aggregates industry.
“Due to clinker’s distinct characteristics, which are difficult to substitute, it has proved resistant to market fluctuations,” says Van Heerden. The full activities of the Clinker Supplies group include the extraction of clinker raw material from various stockpiles and the processing thereof into products of various specifications, primarily for use in the concrete manufacturing industry.
Clinker dumps have a life span of ten years. Clinker Supplies’ key operations are located close to Vereeniging and Sasolburg, with support services based in Alrode.
The group supplies customers in the wider Gauteng market and adjacent northern provinces.
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