Mining powerhouse Afrimat has announced a 276 million rand acquisition of Cape Lime, aiming to expand its footprint in South Africa.
CEO of Afrimat, Andries Van Heerden, spoke to CNBC Africa to provide context: “As the name suggests, it is a limestone company that specialises in very high quality limestones and dolomite products.”
Van Heerden shared that Cape Lime can is situated at the west coast of the Cape and has tracked many years in the business. “They have an absolute unique niche of high quality limestone which is a resource not so readily found in South Africa.”
Van Heerden vouches that this acquisition is expected to create a new revenue stream as Afrimat has been diversifying. “This company will have a unique mote due to its quality of raw material.”
Regarding the recent volatility in the commodity space, Van Heerden said Afrimat has identified specific markets which are not as “sensitive” to the resource crisis. “Water purification as an example, if you can supply a product that is used in that way, you don’t really have the exposure to the international markets and whatever is happening in China.”
He explained that the Afrimat strategy is simple; to find resources that are locally used and locally priced. “This has done extremely well so far.”
Afrimat will now be focused on integrating Cape Lime into the business operations and there are currently no new acquisitions in the horizon, Van Heerden said.
However, he affirmed that opportunities for expansion in Mozambique are imminent with the recent GDP growth in that region and a renewed focus on oil and gas. “We have announced that and it will be part of our strategy for the next year or two,” said Van Heerden.