Indian conglomerate Carborundum Universal Limited (CUMI) is to acquire RHI Isithebe‚ a supplier of critical input material to the hard-pressed steel industry for an undisclosed amount.
The transaction is viewed as pivotal for local employment and for the supply of key material to the South African steel industry‚ which remains under acute pressure.
In addition‚ more than 120 industrial workers in the Isithebe industrial zone north of Durban have been assured of employment continuity following the announcement of the transaction.
RHI Isithebe is the largest fused mineral manufacturing facility in South Africa and can deliver up to 28 000 tons of 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 also one of the only fused mineral plants on the continent.
The acquisition involves CIL‚ a subsidiary of Carborundum Universal Limited (CUMI)‚ based in India‚ entering a binding agreement with RHI AG‚ Austria‚ for the purchase of 100 percent of the equity of RHI’s South African subsidiary‚ RHI Isithebe (Pty) Ltd. This includes the refractory manufacturing facilities of RHI Refractories Africa (Pty) Ltd‚ in South Africa. Founded in 1945‚ Carborundum Universal is part of $4.4-billion Murugappa Group.
The transaction was facilitated by Deloitte‚ the professional services firm‚ 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 that also placed an acceptable value on RHI Isithebe.
The transaction is critical to the local 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 with operations there leave or close down.
RHI Isithebe‚ the leading employer of experienced and skilled labour in the area‚ now operates in a plant once used by Scaw Metals.
The acquisition of the Isithebe operations by CUMI will ensure continuity of business‚ jobs for employees and quality products for customers. CUMI would also introduce its own technologists to enhance the electromineral operations and to 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 existing operations in South Africa.
CUMI is an integrated abrasives‚ electro-minerals‚ ceramics and refractory company with operations in Australia‚ Canada‚ China‚ India‚ West Asia‚ Russia‚ South Africa‚ Thailand and the US.
CUMI brings 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‚" the company said.
The change in ownership is expected to continue providing benefits to TRI's customers‚ employees and the local community. The deal will be formally concluded as soon as the necessary clearances are obtained and all conditions precedent are met.