Metair seeks Russia deal in bid to move parts from Turkey
by Fifi Peters,
2016-03-18 06:16:49.0
METAIR is in talks with a leading battery manufacturer in Russia to help it distribute its automotive parts from Turkey that are barred from entering Moscow due to an ongoing political stand-off between the two nations.
The South African manufacturer of vehicle components, such as batteries, brake pads, and spark plugs, said it was seeking a 50% stake in this Russian company to bring a halt to sliding exports from its Turkish plant, Mutlu Akü.
The value of the acquisition would be between $3m and $10m, Metair CEO Theo Loock said on Thursday.
Mr Loock said he hoped to have the deal finalised within in the next 24-30 months.
Metair exports from Mutlu Akü, Turkey’s largest battery manufacturer and distributor, and exports fell 41% in the 12 months to December.
This contributed to a 12.2% drop in profit for the year, to R554.8m, and a decline in the operating profit margin to 10.2% from 11.4% in 2014.
Other factors that hit profits included the loss of recycling margins to lower lead prices at its Romanian business Rombat, increased spending on research and development, and the generally weak economy in SA.
The upcoming launch of Toyota’s new Hilux had cost the group about R37m, but this would largely be offset by the 10-year contract it had secured to renew all the vehicle’s parts.
Metair said it was also investigating opportunities in other geographies to expand its global footprint. These included ventures in China, Europe, the Middle East, North Africa, and East Africa. Metair derives 40% of its turnover and half of its operating profit from offshore.
Exposure to the volatile rand had mostly worked in the group’s favour during the year.
Kagiso Asset Management investment analyst Simon Anderssen on Thursday described Metair’s performance as "satisfactory." Asked about the group’s expansion plans, he said: "Management appears cautious about the short-term, but further out the group’s prospects remain attractive."
Picture: REUTERS
METAIR is in talks with a leading battery manufacturer in Russia to help it distribute its automotive parts from Turkey that are barred from entering Moscow due to an ongoing political stand-off between the two nations.
The South African manufacturer of vehicle components, such as batteries, brake pads, and spark plugs, said it was seeking a 50% stake in this Russian company to bring a halt to sliding exports from its Turkish plant, Mutlu Akü.
The value of the acquisition would be between $3m and $10m, Metair CEO Theo Loock said on Thursday.
Mr Loock said he hoped to have the deal finalised within in the next 24-30 months.
Metair exports from Mutlu Akü, Turkey’s largest battery manufacturer and distributor, and exports fell 41% in the 12 months to December.
This contributed to a 12.2% drop in profit for the year, to R554.8m, and a decline in the operating profit margin to 10.2% from 11.4% in 2014.
Other factors that hit profits included the loss of recycling margins to lower lead prices at its Romanian business Rombat, increased spending on research and development, and the generally weak economy in SA.
The upcoming launch of Toyota’s new Hilux had cost the group about R37m, but this would largely be offset by the 10-year contract it had secured to renew all the vehicle’s parts.
Metair said it was also investigating opportunities in other geographies to expand its global footprint. These included ventures in China, Europe, the Middle East, North Africa, and East Africa. Metair derives 40% of its turnover and half of its operating profit from offshore.
Exposure to the volatile rand had mostly worked in the group’s favour during the year.
Kagiso Asset Management investment analyst Simon Anderssen on Thursday described Metair’s performance as "satisfactory." Asked about the group’s expansion plans, he said: "Management appears cautious about the short-term, but further out the group’s prospects remain attractive."
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