Banele Ginindza
AUTOMOTIVE component manufacturer and distributor Metair’s full acquisition of Turkish subsidiary Mutlu Akü has given it a strong foothold in the European markets of Germany, France and the UK, along with a sizable portion of the North African market.
It secured an agreement to supply Renault’s manufacturing business in Turkey with 50 percent of the battery supplies, translating to about a year.
Metair chief executive Theo Loock said yesterday that the group was happy to have brought a good result despite the political tensions and with some factories closing down.
“In Romania there is a bit of competition from Ukrainian battery manufacturers that is sort of dissipating at the moment, because there are three battery manufacturers in the Ukraine and four out of Russia, and their products came into the European market and in the meantime have been closed down and the pressure is easing,” he said.
On a standalone basis Mutlu Akü increased its earnings Ebitda (excluding foreign exchange gains and losses) by 17 percent compared to the previous year, primarily through the intense focus on manufacturing efficiencies and operational expense control.
“It is a nice margin, after we maintained our market share in the Turkish environment and despite of trying conditions in the Middle East, especially with the Russian market and stuff, we experienced a 7 percent decline in volumes, and even with that decline we still managed to bring a good performance and that’s purely because of our focus on cost control,” Loock said.
The JSE-listed group reported an increase in operating profit of 86 percent for the year ended December 31, compared with the year before, to R829.3 million. Revenue had jumped 39 percent, to R7.3 billion. Cash generated from operations was up 44 percent to R847 million.
The board declared an 80c a share dividend.
The Turkish opportunity also boosted Metair’s trading volumes in the exposure to another geographical region.
“We have gone from participating from 500 000 vehicles being manufactured to 3.3 million vehicles. We moved into Romania, Turkey and Eastern Europe markets where more than 1.3 million vehicles are manufactured, which is substantially above the SA manufacturing volumes, that’s part of our redesign,” Loock said.
On the local front, Loock said competition, mainly from Chinese and Korean imports, had compelled the company to approach the Trade Administration Commission of South Africa for anti-dumping protection and investigations were ongoing.
“There are 800 to a million batteries being imported in an uncompetitive basis to this market, and obviously if the government should deem it necessary to act on it it will offer opportunity for local battery manufacturers,” he said.
Loock said the erratic power supply by Eskom had its setbacks, particularly the impact on its downstream suppliers, but it also presented an opportunity for the company’s energy storage business.
“From a production point of view it does affect us if our customers produce less vehicles, but as well the disruptions in the market bring opportunity for us because we deal in storage solutions,” he said.
Of plans for the rest of the African continent, Loock said Metair had a very strong African footprint and would be looking to cover all the regions, particularly with Turkey providing a platform for the Northern African region in countries like Algeria and Morocco.