Omnia is set to add crops and diversify

Omnia’s agriculture division is set to add crops and diversify further abroad in a move that is expected to boost the business.

Group MD Adriaan de Lange said on Tuesday that Omnia would grow the agriculture business’s footprint internationally as customers in SA were “struggling to make good money” at current prices.

Omnia recently bought Oro Agri, a producer of nontoxic crop protection products, liquid fertilisers and soil conditioners, for $100m. The US-based group has production, research and development facilities in the US, Brazil and SA.

The diversified chemicals group also expects further improvements in production efficiency at Sasolburg and a slight uptick in commodity prices, which will increase the sales prices for fertiliser products in the new year.

“International crop prices remain under pressure on a global basis,” it said.

This is due to record harvests in most large producing countries in recent years, it said.

The performance of the agriculture division for the year to March was “encouraging”.

The South African agriculture business was up 15%, mainly on growth in speciality product lines, production efficiencies and good currency hedging strategies. Omnia said the international agriculture unit had a “solid performance” in the year.

Operating profit for this business was up 44% to R275m on strong growth in Australia and Brazil and an “exceptional performance in Zimbabwe”, which was due to a recent change in political leadership and a renewed focus on agriculture.

That meant group profit for the period rose to R664m from R592m a year earlier.

Headline earnings per share was up 12%.

“I hope that we can turn the South African mining impasse around — the rest of the world looks a lot better than South African mining,” De Lange said.

But Omnia’s electronic detonator business had produced good results.

Although the chemicals division faced weak demand for products from local manufacturing clients, there are a number of growth opportunities internationally, Omnia said.

The addition of a base oil, additive and lubricant business from Umongo Petroleum to the chemicals division would broaden its product offering and create new opportunities to grow the business in SA and sub-Saharan Africa.

The KwaZulu-Natal based Umongo Petroleum was bought in mid-2017 for R780m.