S Africa's AECI concludes Rand100m of divestments

20 January 2000 12:55  [Source: ICIS news]

LONDON (CNI)--South Africa's AECI announced Thursday it has recently concluded some Rand100m ($16.5m/Euro16.3m) of divestments, including the sale of its 50% stakes in Rensinkem and Specialty Minerals South Africa (SMSA), to its specialty chemicals subsidiary Chemserve for Rand40m.

An AECI spokesman said the divestments are part of the group's transformation plan, initiated in October 1998, to reshape the portfolio into the business areas man-made fibres, explosives and specialty chemicals.

In the last few months, the AECI has also sold:

• A 20% stake in its technical coatings business to US group PPG Industries for about Rand20m.
• Its Autoplastic business to SAI Automotive, part of the Sommer Allibert group, for an undisclosed sum. Autoplastic produces automotive trim components for South African motor manufacturers
• Its 50% stake in Goldchem to its joint venture partner, the gold-mining company Rand Refinery, for an undisclosed sum. Goldchem supplies specialty chemicals to the goldplating process industry.

Commenting on the Rensinkem and SMSA transactions, which both took place on 1 January, AECI said, "[The companies'] high-tech, niche products will be optimised in Chemserve, which has an excellent track record in developing and serving specialty markets."

Chemserve will acquire the two companies through the issue of 3.33m additional Chemserve shares to AECI, thereby increasing AECI's shareholding in the specialty chemicals firm from 60.9% to 62.7%.

Rensinkem is a 50:50 joint venture with US firm Georgia-Pacific Resins, and is a leading supplier of urea formaldehyde adhesives primarily for the particle board industry. SMSA is 50% owned by Specialty Minerals of the US, and manufactures precipitated calcium carbonate (PCC), mainly for the paper industry on the African continent as a specialty pigment for filling and coating high quality paper.

AECI said its 80:20 technical coatings joint venture with PPG will operate in the automotive original equipment, refinish and general industrial coatings markets. The spokesman confirmed that the Dulux decorative coatings unit has been separated from the rest of the coatings business, and will remain wholly owned by AECI in the short term. AECI intends to sell the decorative coating unit in the long-term, he said.

By: Anna Jagger
+1 713 525 2653

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