Afrimat CEO, Andries van Heerden, has criticised the delays in the approval of his company’s acquisition of Lafarge South Africa in a letter to shareholders.
The Competition Tribunal approved Afrimat’s US$6m purchase of Lafarge South Africa and its subsidiaries in April 2024, exactly a year after the deal was first announced.
But Van Heerden says that while the group has successfully integrated Lafarge into its operations, delays in the deal’s approval has led to challenges that could have been avoided.
"Because the Competition Tribunal took an unusually long time to rule on the Competition Commission’s recommendations, by the time Afrimat took over the cement operations they were in significant disrepair and the cash available at the acquisition date had diminished," Van Heerden said.
"Approximately R185m was spent in the current financial year to return the kilns to steady production. Though cement losses are steadily decreasing, this has resulted in a significant loss for this financial year," he said.
The Lafarge acquisition included quarries, RMC batching plants, fly-ash operations, an integrated cement operation and grinding plant. Afrimat is also obliged to sell five quarries and four ready-mix concrete operations as part of the Competition Tribunal's conditions for approving the deal.
"Through our extensive industry experience, we knew exactly what had to be done to improve these operations. The new quarries underwent almost immediate efficiency improvements, ensuring they produced measurable results by year-end while also focusing on long-term sustainability," Van Heerden said.
