SAFIC, the chemical division of the listed infrastructure company Accentuate, has signed a joint venture agreement with listed Ion Exchange of India to roll out various water treatment projects and supply chemical and resin products to the southern African region.
Accentuate’s chief executive Fred Platt said yesterday the shareholding of the joint venture was split 60/40, with Ion Exchange having control.
No disclosure was made about the investment by the joint venture parties.
Rajesh Sharma, the chairman and managing director of Ion Exchange, said the target was for the venture to achieve a market share of between 5 percent and 7 percent within the next two to three years. He estimated the southern African water treatment market, including both chemicals and equipment, was worth about R10 billion a year.
Sharma said the venture, trading as Ion Exchange-Safic, had no contracts but a lot of groundwork could be converted into contracts within the next three to six months.
Ion Exchange-Safic’s chief executive, Gourish Chakravorty, said it had already provided new technology to Illovo to solve a sugar colour problem. Sharma expected the venture to have about 30 employees in the next two years, most of them recruited locally.
He confirmed the possibility of a chemical manufacturing facility in South Africa, which would involve an investment of about $10bn (R82bn). It would create about 15 to 20 new jobs.
Ion Exchange India, which last year posted a turnover of $200 million, provides water installations for diverse industries in India and abroad, including nuclear thermal power stations, fertiliser factories, refineries, motor vehicle plants and textile industries.
Platt said the deal had enormous benefits for Safic and Accentuate in the longer term.
Sharma said South Africa was a semi-arid region and with a growing population and increasing industrialisation it would be seriously water-stressed in the next 20 years. “Other areas of interest… are the treatment of ground water and acid mine drainage.”
Accentuate stock rose 10.9 percent to 71c yesterday.