Metair looks to grow African manufacturing footprint

METAIR Investments is investigating 11 expansion project opportunities, including two joint ventures in Africa.

Theo Loock, the chief executive of the listed automotive component manufacturer and distributor, confirmed yesterday that the group was exploring a vehicle battery manufacturing and distribution joint venture in Kenya and a battery distribution joint venture in north Africa that would cover Algeria, Morocco, Egypt and the Middle East.

Loock declined to put any time frame on when any decision would be taken by Metair on either of these projects.

“They will happen in their own time,” he said.

Loock added that Metair was “trying to touch the whole of Africa” but was for now steering clear of west Africa.

This follows the decision of several manufacturers, including Nissan and Ford, to start assembling vehicles on a semi knocked down basis in Nigeria.

Loock said these projects in Africa were among 11 opportunities the group was looking at.

Other projects it was exploring included a joint venture manufacturing project in China, a joint venture lead recycling project in Russia, a joint venture battery distribution project in Europe and setting up of a wholly-owned battery distribution operation in the UK.

Loock said the group was also seeking a major interna- tional battery company partner.

Metair, which intends to set up a manufacturing footprint in Africa before pushing ahead with its strategy to transform itself into a global manufacturer, has battery manufacturing and distribution facilities and operations in South Africa, Romania and Turkey.

Loock said the group had delivered encouraging financial results in the six months to June, which were supported by an excellent performance in Turkey under very challenging market conditions and improved aftermarket demand in South Africa and Romania.

Metair yesterday reported a 9 percent growth in revenue to R3.54 billion in the six months to June from R3.23bn in the previous corresponding period.

Operating profit improved by 8 percent to R345.8m.

Profit after tax attributable to equity holders declined by 6 percent to R220m because of a normalisation of the group’s tax rate and increased interest charges following the group restructuring in the previous period to secure the long-term debt structure required for the acquisition of the shareholding in Mutlu Akü in Turkey.

The tax charge increased by 54 percent to R90.2m and net interest expenses by 23.5 percent to R51.4m.

Metair’s headline earnings a share fell by 7.5 percent to 111c.

Loock said several key operational milestones were reached during the period, including the successful launch of the Metair International Battery brand.

Metair shares fell by 12.87 percent to close at R32.03 on the JSE yesterday.