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Indian conglomerate Carborundum Universal (Cumi)) is set to acquire RHI Isithebe, a supplier of critical input material to the steel industry, for an undisclosed amount.
RHI Isithebe’s more than 120 workers based at its plant at Isithebe industrial area on the KZN North Coast have been assured of employment continuity.
Carborundum Universal said the transaction needed to be viewed as pivotal for local employment and for the supply of key material to the local steel industry, which remained under acute pressure.
RHI Isithebe is the largest fused mineral manufacturing facility in SA and can deliver up to 28 000 tons a year. Fused minerals are natural minerals that are fused to create materials used in the steel, cement, glass, non-ferrous metals and abrasives industries. RHI Isithebe is one of the largest used mineral plants on the continent.
The acquisition involves CIL, a subsidiary of Carborundum Universal, based in India, entering a binding agreement with RHI AG, based in Austria, for the purchase of all the equity in RHI’s SA subsidiary, RHI Isithebe (Pty) Ltd.
The deal includes the refractory manufacturing facilities of RHI Refractories Africa, in SA.
Founded in 1945, Carborundum Universal is part of the $4.4 billion (R36.3bn) Murugappa Group.
The transaction was facilitated by professional services firm Deloitte, which brought in the global investor. Deloitte was advisor to RHI, the parent company of RHI Isithebe, and was tasked with running a global sale process to identify the most appropriate investor who also placed an acceptable value on RHI Isithebe.
“The transaction is critical to the communities around Isithebe, an hour’s drive north of Durban. This was one of the original industrial development zones created in the previous era and has in recent times seen many firms leave or close down,” Deloitte said.
RHI Isithebe, the leading employer of experienced and skilled labour in the area, now operates in a plant previously used by Scaw Metals.
“The acquisition of the Isithebe operations by Cumi will ensure continuity of business, jobs for employees and quality products. Cumi will also introduce its own technologists to enhance the electromineral operations and extend the ready-use-product range. Cumi is one of the few global companies that is not only involved in fused minerals and refractories, but also has operations in South Africa,” Deloitte said.
Cumi is an integrated abrasives, electro-minerals, ceramics and refractory company with operations in Australia, Canada, China, India, West Asia, Russia, SA, Thailand and the US.
Deloitte said Cumi would bring to the Isithebe business, along with capital and technologists, its brands, market access, application engineering expertise and global management practices.
“This will enable the Isithebe plant – to be renamed as Thugela Refractories, Isithebe (TRI) – to grow its electro-mineral and refractory business,” it said.
The change in ownership was expected to continue providing benefits to TRI’s customers, employees and the local community.
The deal will be formally concluded after the necessary clearances have been obtained and all conditions met.