Johannesburg - Metair, the listed automotive component manufacturer and distributor, has set itself the goal of becoming a global leader in its field and increasing the number of batteries it produces annually from 7.2 million to 50 million within the next five years.
Brand Pretorius, the chairman of Metair, said last week that this was an audacious goal.
Metair managing director Theo Loock previously said the group’s aim was to be a global manufacturer by having a presence on each of the major continents.
Pretorius said achieving the 50 million batteries annual production goal would necessitate acquisitions or global consolidations, but the realisation of this vision would depend on many factors including what happened in the world economy, whether suitable acquisition opportunities arose and if rationalisation and consolidation took place in the industry.
“There are many variables but we are on the lookout because it’s a very real ambition that we have. But we know for that vision to materialise we need to become fully global and we’re not at that point yet,” he said. “There are some potential growth opportunities on the horizon and each opportunity is being carefully analysed in terms of the strategic fit, alignment, technology and affordability.”
Acquisitions
Metair in 2013 acquired Akü, the leading lead-acid battery manufacturer and distributor in Turkey and the Middle East for R2.9 billion to transform the group into a key player in the Europe, Middle East and Africa region.
The acquisition came 18 months after Metair acquired Rombat, the leading lead-acid battery business in Romania.
Metair’s energy storage segment manufactures batteries for automotive, telecoms, utility, mining, retail and materials/products handling sectors and has been expanded as part of a focused strategy to reduce the group’s reliance on the automotive components business.
Pretorius said in the group’s latest annual report that Metair continued to assess opportunities globally and in the rest of Africa to exploit growth opportunities, mitigate South African country risk and ensure an effective earnings hedge against the ongoing depreciation of the rand.
Metair said with the growth in the African automotive market, countries were starting to protect their local automotive manufacturers.
Where original equipment manufacturers set up production facilities in other African countries as a result of these regulatory changes, there was an opportunity for Metair to supply those markets or partner with a local component manufacturer, it said.
But Metair stressed its strategy was to partner with local companies in these countries to leverage local knowledge and structures, “rather than establishing greenfield operations”. The company added that while there were “a number of intriguing opportunities under investigation”, it preferred to take a conservative approach before committing.
Loock told Business Report last year that Metair was investigating 11 expansion project opportunities, including two joint ventures in Africa.
Pretorius confirmed on Friday that Metair had become more cautious about opportunities and prospects in Africa. “We are also facing up to the reality that economic growth in many African countries has slowed down significantly and vehicle sales are rather depressed.”
Shares rose 5.58 percent on Friday to close at R20.80.
BUSINESS REPORT