This report describes the current situation in the country, examines the increasingly competitive market and focuses on factors influencing the sector’s success. The report also profiles eleven companies, including Bulk Mining Explosives (BME) which is part of the Omnia Group, and the country’s leading explosives company, African Explosives Ltd (AEL) Mining Services, which held approximately 60% of the domestic market in 2013.
The Manufacture of Explosives and Pyrotechnics
This report focuses on the explosive and pyrotechnic manufacturing sector in South Africa, which has an estimated value of R5bn. Environmental and safety concerns as well as technological advancements are key drivers of innovation in this fiercely competitive industry.
A Challenging Market
Industrial action in the mining industry has had a negative impact on the explosives sector. During 2014 for example, market leader African Explosives Ltd (AEL) Mining Services reported that its explosives manufacturing business lost R170m as a result of strikes in that sector, with volumes of explosives and initiating systems sold to mining companies decreasing by 4% and 19% respectively. Another large consumer of explosives is the construction sector, also under pressure due to muted economic growth and the slow roll-out of government’s infrastructure plan, originally valued at R4-trillion over 15 years.
Looking at New Markets
In response to local market conditions companies have turned their attention to the mining and construction sectors in sub-Saharan Africa. Even though the International Monetary Fund’s Regional Economic Outlook downwardly revised its 2016 forecast for the region to 4.25%, growth in this region is still stronger than that in many other regions, and certainly that of South Africa where growth of 1.3% is forecast for 2016. A shift in company focus is also apparent, with the AECI group diversifying into higher-margin products such as water treatment chemicals and Omnia focusing more on its agricultural and chemical manufacturing divisions.
Table of Contents
|2.||DESCRIPTION OF INDUSTRY||1|
|2.1.||Industry Value Chain||2|
|3.||SIZE OF THE INDUSTRY||3|
|4.||STATE OF THE INDUSTRY||7|
|4.1.2.||Enterprise Development and Social Economic Development||10|
|5.2.||Mining and Construction Industries Activity||13|
|5.4.||Raw Material Security||15|
|5.5.||Uncertain Electricity Supply||15|
|5.8.||Research and Development (R&D) and Innovation||18|
|6.1.||Barriers to Entry||19|
|AEL HOLDCO LTD||23|
|DENEL SOC LTD||27|
|DETNET SOUTH AFRICA (PTY) LTD||33|
|LION MATCH PRODUCTS (PTY) LTD||35|
|MAXAM DANTEX SOUTH AFRICA (PTY) LTD||37|
|NXCO MINING TECHNOLOGIES (PTY) LTD||39|
|OMNIA GROUP (PTY) LTD||41|
|ORICA MINING SERVICES SOUTH AFRICA (PTY) LTD||44|
|SASOL DYNO NOBEL (PTY) LTD||46|
|SASOL SOUTH AFRICA (PTY) LTD||48|
|ZIMCO GROUP (PTY) LTD||53|