Theo Loock, chief executive of Metair, said on Thursday that it would like to effect its globalisation strategy over the next five to six years, but it was a two-step approach.
Loock said the highest priority in the next two to three years would be to settle its battery manufacturing business in Eastern Europe and Russia at 11 million units a year, sell the spare capacity and then expand to 15 million batteries a year.
Metair currently manufactures 8 million batteries a year, but has the capacity to produce 12 million.
Loock confirmed this expansion could involve investment in some greenfields developments and acquisitions. At the end of five to six years, Metair would be ready for a merger and a bigger step as part of its globalisation strategy, he said.
The group manufactures, assembles, distributes, exports and retails energy storage products and automotive components in Africa, Europe, Turkey, the Middle East and Russia.
Metair also supplies batteries to all major original equipment manufacturers (OEMs) in South Africa, EU, Romania, Turkey and Russia through subsidiaries in Romania (Rombat), Turkey (Mutlu Akü) and South Africa (First National Batteries).
Loock said its future expansion might be more into the Middle East and European markets, but this would be dependent on the trade positioning and opportunities.
Metair last year acquired 25percent of Associated Battery Manufacturers East Africa in Kenya as part of its planned expansion into Africa. Loock stressed Metair approach was to learn from its partners before expanding further.
“We’re at the crawling stage, have fantastic partners and the business is heading for record volumes and turnover and strong after market growth,” he said.
Loock said the Africa expansion would involve the Chloride Exide brand. Abmeal’s primary business is the manufacture of batteries under the Chloride Exide brand, which Metair owns in South Africa.
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Loock confirmed Metair was also positioning the company to be a supplier to OEMs based in South Africa that were expanding their operations by establishing semi knocked down assembly operations in some African countries.
“It’s always been our strategy to be ahead of the curve. Our overseas competitors have always been more adventurous than us and got the business.
“We want to already be in those markets with a known aftermarket product and ready to be able to support them, mostly with our energy storage products, but then we also have the aftermarket business. Advanced teams have gone in to establish ourselves in that market,” he said.
Metair’s financial performance in the year to December was impacted by new model launches, the final settling down of overseas acquisitions and several geopolitical and security issues, including an attempted coup in Turkey and the subsequent devaluation of the Turkish lira.
Headline earnings a share dropped by 8 percent to 229 cents from 248c.
Revenue rose 16 percent to R8.95 billion from R7.73 billion.
Operating profit declined by 7 percent to R731.4 million from R789.6 million. A dividend of 70c a share was declared.
Loock said that while the positive effect of the devaluation of the Turkish lira was an increase in the competitiveness of its products in the local and export markets, the negative effect would only crystallise this year if the Turkish lira settled at lower levels, possibly reducing Mutlu Akü’s contribution to group earnings when converted into rand.
Shares in Metair remained unchanged on the JSE to close at 24.50.