Omnia aims to generate half of its revenue from offshore

Chemicals group Omnia wants to generate half its revenue outside SA in the near future, partly in response to limited growth opportunities and risks in its home market, says MD Adriaan de Lange.

“SA is still 63% of our turnover and I’d like to get that to 50/50 as soon as I can .... The bigger the international portion becomes the better,” De Lange said on Tuesday.

Omnia, which supplies to the agriculture, mining and chemicals industries, said on Tuesday the local mining industry was under pressure “due to policy uncertainty and the prospect of changes to the Mining Charter”.

This would weigh on investor sentiment “and the future viability of the mining industry in SA” until the issues were resolved.

De Lange said Omnia planned to grow Umongo Petroleum — 90% of whose shares the group acquired recently — into sub-Saharan Africa and possibly further.

The group was broadening its focus beyond Africa and had sights on the Americas, Australia and Europe. Most of its international revenue comes from Africa, Brazil and Australia.

It would avoid being overly concentrated in any one region and would ideally like to have local partners.

For instance, De Lange said the mining division intended to grow its electronic detonators business internationally, using Omnia’s experience with automated production lines.

Omnia was also evaluating merger and acquisition opportunities “and we’re hoping that we can progress that to the point that we can make an announcement quite soon”.

“For us it’s important to look at companies with growth prospects and we need supply chain — route to market — into the rest of the world. The only common thread in whatever we look at is chemicals, we’ve been quite open-minded in terms of where we look.”

Omnia said on Tuesday its revenue in the six months through September declined 3% to R7.7bn mostly because sales to the agriculture sector were delayed to the second half due to a late planting season.

But profit was up 27% at R285m, thanks to lower input costs, particularly ammonia, and improvements to downstream factories, De Lange said.

Electus equity analyst Mishal Emeran said Omnia “has the balance sheet to grow via acquisitions, but organic growth will be dependent on the mining commodity cycle”.