SHARE ANALYSIS: Afrimat
Establishing a firm foundation for growth
Back in 2007 Afrimat was a small quarrying, ready-mix concrete and concrete-block company with annual revenue of just R350m. Ten years on and with a broadly diversified portfolio of industrial minerals added, it has grown its revenue to R2.2bn (soon set to exceed R3bn). A big revenue boost of more than R900m will come from iron ore producer Diro, which the company acquired for R320m in June. Afrimat has gained control of Diro’s opencast iron ore mine near Kathu in the Northern Cape. It has a contract in place with Transnet to transport Diro’s output on the Sishen-Saldanha railway. At purchase, Diro’s proven reserves were 5.6Mt. These have since grown significantly. “Our own exploration shows proven reserves are 10Mt,” says Afrimat founder and CEO Andries van Heerden. “We believe further exploration can add another 20%.”
In Diro, Afrimat inherited a neglected mine. To get it up and running, the company pumped in capex of R50m, an amount included in the purchase price. Initial p...
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