While the COVID-19 pandemic and subsequent lockdown restrictions in South Africa posed challenges for minerals processing solutions provider Weir Minerals Africa, the organisation still managed to conclude an important empowerment transaction in May.
Its newly established South African operation, Weir Minerals South Africa – is a remarkable achievement that showcases the company’s true commitment to transformation in the country, writes LAURA CORNISH.
The newly incorporated Weir Minerals South Africa, whose assets include sales branches across the country, an assembly facility in Alrode, Gauteng, and a distributor network, is now 25.1%-owned by black empowerment partner Medu Capital, while the remaining 74.9% ownership remains under the Weir Minerals African umbrella.
“This long and fruitful journey began three years ago and was a process necessary to truly ensure the correct partnership and alignment between two businesses to deliver on all of our strategic objectives,” says Weir Minerals Africa regional MD, Gavin Dyer. The deal was finalised in Johannesburg in May 2020.
“We have, over the years, made significant progress in terms of our employment equity, skills development, preferential procurement and socio-economic development,” Dyer continues.
“And we now have an organisational ownership structure that is more representative of the demographics of South Africa.”
Choosing the right black economic empowerment partner is an incredibly important process – and one that requires complete confidence in knowing that both businesses can contribute meaningfully.
Dyer has every confidence that the 100% black-owned Medu Capital, an investment and private equity focused business established in 2003, will deliver on this front.
“This is an investment management company that specialises in private equity, with a focus on establishing entrepreneurs to grow and develop businesses, by providing long-term capital and skills.
“The company has a proud record of investing in 30 businesses in diverse sectors including healthcare, retail, engineering services, steel, manufacturing, mining, and financial services, and has an owner managed structure with a motivated and committed management team,” he outlines.
With a flat corporate structure which enables quick decision making, Medu Capital’s experienced management team will provide robust board participation as well as good strategic input and involvement, particularly in financial aspects.
“The Weir Minerals business brings a lot of value add to Medu Capital as well,” Medu Capital co-founder and director, Ernest January continues.
“Through this investment we are given the opportunity to invest alongside an established and internationally supported business, the Weir PLC holding company, which was established in 1871 and today employs over 15 000 people globally.”
Part of the global Weir Group PLC, Weir Minerals Africa serves primarily the mining sector around Africa and the Middle East. It also manufactures world-class mineral processing equipment for export to international group destinations. Listed on the London Stock Exchange, the Weir Group’s engineering heritage dates back almost 150 years.
“With its extensive local investment in skills, service capability and manufacturing capacity in South Africa, the Weir Group has always been supportive of our empowerment drive,” Dyer says.
“This strengthens our position as a local technology leader serving global markets.”
“The high-quality products and brands of Warman and Envirotech are highly regarded and established brands in the industries in which they operate,” January continues.
“We also believe in the company’s operating model, which is to partner with their customers over the lifespan of operations, providing services and spares to sustain their mines.
“The company’s design, engineering and technical capabilities, combined with its high-quality standards and global reach, have led to impressive long-term customer relationships and a strong track record,” January further points out.
“Ultimately, Weir Minerals Africa met Medu Capital’s investment criteria (our investment rate is one out of 40 transactions reviewed) – evidence of its sound business model and good management,” January highlights.
The deal further ensures that Weir Minerals Africa, through its South African subsidiary, continues to enhance its value proposition to its customers in the mining industry.
“Our locally focused company is now in a position to fully support the imperatives of Mining Charter III,” Dyer notes. This is becoming increasingly important to the South African mining industry and enables Weir Minerals South Africa to cater to their regulatory needs.
The road ahead
“This deal unequivocally demonstrates our commitment to the South African market, which we continue to believe holds significant business upside for the Weir Minerals Africa and the Weir Group PLC,” Dyer reiterates.
“With an alignment of strategic priorities with our new partner, we have positioned this business to retain a market leading position. Weir Minerals South Africa looks forward to seeing Medu Capital quickly becoming an active partner in guiding and fostering its future success.”
Concludes January: “We are proud to be associated with Weir Minerals and support the company’s aim to achieve and maintain a competitive B-BBEE rating. We look forward to working with the management team to complement its value proposition to customers and are excited to participate in the company’s growth.”