Ahead of AECI’s 100th anniversary, the South Africa-based company has announced that it aims to double the profitability of its core mining and chemicals business by 2026 and to become a global top three integrated mining explosives and chemicals solutions provider by 2030.
These ambitions were laid out at a recent Capital Market Day, where AECI Chief Executive, Holger Riemensperger, announced the company’s revised strategy, which aims to extract value from its underlying operations.
Riemensperger said: “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 within the portfolio have no synergies. Those underperforming units will be better served under different ownership. The changes we are making take into consideration several factors, including the external environment. They are aimed at ensuring that as AECI reaches its centennial anniversary in 2024, it is better positioned to navigate the changing environment and positioned for strong growth in the future.”
AECI’s strategic update follows a comprehensive review of the business’ operations in which the board and management identified the business units that are central to the sustainable and profitable growth of AECI, the company said. The strategy is premised on building on the group’s solid foundation and ensuring that it is structured in a manner that enables it to unlock value in the near term.
A core driving force of the strategy is to deliver operational and executional excellence through focusing on AECI’s core businesses and existing strengths while ensuring a disciplined approach to capital allocation and execution.
The AECI of the future, the company says, will see the group focus on its core mining and chemicals capability and divest out of non-core businesses.
AECI Mining will remain the group’s main growth focus. The business will look towards growth in Asia-Pacific, South America and North America as it drives its ambition to be top three on a global scale by 2030. AECI Chemicals will be re-organised and repositioned to enhance its cash generation capabilities through prioritising high-margin products and services and ultimately support the growth of AECI’s Mining division. The remaining businesses – Much Asphalt, Animal Health, Schrim, Sans Fibers and Beverage – which are not core to the identified growth levers will be exited out of in an orderly manner and over a period of time, the company said.
The group management structure has also been adjusted to reflect the changes in the business and to drive empowerment, accountability and quick decision making.
Riemensperger concluded: “At AECI, we stand together with a shared vision of a better world. 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 that the changes that we are making will be net positive for the business and the unwavering focus on operational and functional excellence will act as a catalyst for further innovation and profitable growth, and will unlock value for all of AECI’s stakeholders.”