AECI aims to double the profitability of its core mining and chemicals business by 2026 and become a global top three integrated mining explosives and chemicals solutions provider by 2030.
The ambitions were laid out at a recent capital market day, where AECI CE Holger Riemensperger announced a revised strategy, which aims to extract value from its underlying operations.
Businesses deemed non-core in the new strategy – Much Asphalt, Animal Health, Schrim, Sans Fibers and Beverage – would be exited over a period.
AECI is a diversified chemicals solutions company employing 7 168 people at more than 100 sites, with a presence in 22 countries.
“AECI is more than a business. It is a South African institution. At our core, we enable safe mining operations. While some synergies exist across our diversified industrial group, other business units in the portfolio have no synergies. Those under-performing units will be better served under different ownership,” he said in a statement.
“The changes we are making take into consideration several factors, including the external environment. They aim to ensure that as AECI reaches its centennial anniversary in 2024, it is better positioned to navigate the changing environment and positioned for strong growth,” Riemensperger said.
AECI’s strategic update followed a review of the operations in which the board and management identified the units that were central to the sustainable and profitable growth of the group.
The strategy was premised on building on the group’s foundation and ensuring it was structured in a manner that enabled it to unlock value in the near term.
There would be a disciplined approach to capital allocation and execution. Acquisitions were not central to the strategy in the next 18 months as the group focussed on optimising the base, he said.
The AECI of the future would see the group focus on its core mining and chemicals capability and divest out of non-core businesses.
AECI Mining would remain the main growth focus. It would seek growth in Asia- Pacific, South America and North America as it drove an ambition to be top three on a global scale by 2030.
AECI Chemicals would be repositioned to enhance cash generation through prioritising high-margin products and services and to support the growth of AECI’s Mining.
The group management structure had also been adjusted to drive empowerment, accountability and quick decision making.
“We recognise that to secure our place for the next 100 years, we must embrace change, progress our strategy to seize new opportunities, and navigate market shifts with agility and profitability. I believe the changes we are making will be net positive for the business and will act as a catalyst for innovation and profitable growth, and unlock value for stakeholders,” said Riemensperger.