The 10% increase was propelled by demand in sub-Saharan Africa.
“The opportunities in Africa are developing quite fast,” Louis du Toit, managing director of AECI chemicals unit ImproChem, said in a phone interview from Johannesburg yesterday. “We see double-digit growth on the African Continent.”
ImproChem, a fully owned subsidiary of AECI, expects total sales to be about R800-million in 2013, of which about R500-million will come from water treatment, du Toit said. About 25% of revenue comes from sub-Saharan Africa, excluding South Africa.
ImproChem is expecting sales growth in Nigeria, Ghana, Democratic Republic of Congo and Zambia, according to du Toit.
The company is selling chemicals to African municipalities to treat tap water and sewage, in addition to the mining, petrochemical, food and beverages industries. “There is enough water available,” du Toit said. “The quality of supply is lagging demand.”
AECI shares gained 0.3% to R118 by 1.19pm in Johannesburg. The stock has advanced 48% this year, making it the eigth-best performer on the 166-member FTSE/JSE Africa All Share Index.
Economic Growth
Sub-Saharan African economies are expected to grow by a combined 5.9% in 2014, compared with 5.1% this year, the International Monetary Fund said in a July 9 report. This compares with a 2014 forecast of 3.3% in South Africa, the continent’s biggest economy and ImproChem’s biggest market.
AECI is planning to complete an acquisition in Brazil in 2013 or early next year, chief executive Mark Dytor said on July 24.
The company is targeting acquisitions in the chemicals industry, allowing it to broaden its revenue base and markets. AECI acquired General Electric’s chemical and monitoring solutions business in South Africa and sub-Saharan Africa in July 2012.
“It is our strategy to grow via acquisition,” du Toit said. “We are looking for local acquisitions in the African continent. Should a global player come up with a possible acquisition opportunity, we will probably be looking at it." – Bloomberg