South Africa-based AECI Ltd acquires Clariant's water treatment unit for $36.7M

By Nicel Jane Avellana

Feb 11, 2014 09:23 AM EST

AECI Ltd will be acquiring Clariant's water treatment unit in Africa in a deal worth $36.7 million or ZAR 409 million, in a bid to grow in the region and leverage on the demand for industrial waste water treatment, Bloomberg reported.

AECI is the largest explosives and chemicals manufacturer in South Africa whose range of products include commercial explosives, industrial and specialty chemicals, polyvinyl chloride, low density polyethelene, synthetic fibers and fertilizers, Bloomberg Markets data showed. The information also revealed that Clariant is a developer, producer, marketer and seller of specialty chemical products. It also provides dyes and chemicals for the textile, leather and paper industries as well as pigments used in paints, printing inks, plastics and cosmetics, among others.

In a statement about the sale, Muttenz, Switzerland-based Clariant said the acquisition of the business which posted sales of $45 million in 2013 will be paid for by AECI in cash, the report said.

AECI will be using the business to improve on its ImproChem division. The division utilized its purchase of the chemical and monitoring solutions operations of General Electric Co in 2012 to help establish a water treatment sales platform in Africa and the Indian Ocean, the report said.

In a separate statement, AECI Chief Executive Officer Mark Dytor said, "This footprint will be enhanced since ImproChem's direct sales capability in many African countries will enable it to leverage Clariant's penetration of these markets."

From relying mainly on the mining industry in South Africa, AECI is making a shift to concentrate on products that provide higher profits. These include water treatment. The purchase of the unit will increase the firm's client base with more industrial and municipal water customers, the report said.

A 50% stake in Blendtech, the South African black economic partner of Clariant is also included in the deal, Bloomberg reported.

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