MechChem Africa March 2017

MechChem Africa

•

March 2017

FE International remained focused

on its long-term strategy during

2016 in a stagnated South African

economy and a business climate

with little or no sign of an upturn on the

horizon.

This is according to Mehran Zarrebini,

CEO of the group of companies which in-

cludes Van Dyck Carpets, Easigrass, tyre

recyclers Mathe Group, polypropylene

staple fibre producer PFE Extrusion and

Envirobuild, manufacturers of eco-friendly

rubber flooring.

“Despite difficult trading conditions, our

companies performed well this year through

balancing operational riskwithfinancial risk,”

he said.

“Recent economic data and monthly in-

dicators point to expectations of little or no

significant recovery in2017. Growth remains

a particular concern for SouthAfrica coupled

with high levels of unemployment, political

turmoil and a lack of investor confidence.

Whilst the country managed to steer clear

of a ratings downgrade in 2016, it is still un-

certain whether the country can continue to

navigate through this headwind during the

course of this year.

“As a family-owned entity with a turnover

of more than R600-million, we are cost-and

risk-conscious.Wescrutiniseinvestmentsand

expansion plans whilst remaining committed

to South Africa and to further investment in

our diversified portfolio of companies. We

continuously aim tomanage and position the

group for the long term.”

Looking back on 2016, Zarrebini said that

PFE International performs well in tough economic conditions in 2016 and foresees

increased market share this year.

The Mathe Group’s new waste tyre processing

facility led to investment in new machinery at

Envirobuild for the manufacture of commercial

rubber flooring from rubber crumb.

Environmental sustainability

through resource recycling

load shedding had had a significant impact on

the group’s operations. “Our extrusion facili-

tieswere severely affecteddue tooperational

requirements with respect to heating. This

resulted in decreased output. Fortunately, as

the load shedding subsided, it was possible to

meet customer requirements,” he said.

Being an organisation that trades inter-

nationally, PFE was also at the mercy of ex-

change rate fluctuations. “Our focus is on the

production andmanufacture of rawmaterials

and products and not in hedging currencies.

Whilst various options are at our disposal

to mitigate currency risk, including forward

contracts and managing currency exposure

through business practices, our approach

has been one of prudence and risk minimisa-

tion. There is just too much uncertainty and

volatilitytosuccessfullyemployanyparticular

method,” Zarrebini said.

PFE invested in significant capital projects

during 2016 – in the installation and commis-

sioningof newmachinery aswell as inupgrad-

ing processes and improving efficiencies.

Mathe Group saw the largest invest-

ment – in a new tyre facility commissioned in

February,whichhasnowprocessedmorethan

100 000 truck tyres. “We expect increased

off take this year as we secure new clients in

different industries and look forward to be-

coming the leading processor of waste tyres

in South Africa,” Zarrebini said.

“The new waste tyre processing facil-

ity led to investment in new machinery at

Envirobuild for the manufacture of commer-

cial rubber flooring fromMathe Group’s rub-

ber crumb. Further investment is planned in

the use of rubber crumb for the manufacture

of novel and innovative new products.

“Because the industry is still in its infancy

in South Africa, our focus will then shift to-

wards activities suchas educatingprofession-

als and potential future consumers about the

benefits of using these products.”

Polypropylene staple fibre producer, PFE

Extrusion, also saw investment in new tech-

nology last year. “This was necessary to re-

maininternationallycompetitivewithastrong

emphasisonincorporatingresourceefficiency

and resource reduction into themanufacture

of the different products,” Zarrebini said.

“Over the past few years we have seen

supplies of rawmaterials become scarcer, and

thus more expensive. They are also subject

to price volatility. Our focus remains an op-

portunistic one as we continue our journey

to transform our operations and increase re-

source productivity and rethink our business

model to capture value residing in resource

ownership.”

Headdedthathebelievedtheminimisation

of resource usage would continue to unlock

significant value whilst establishing greater

operational stability throughout the group.

Zarrebini is very optimistic about the

group’s artificial grass brand, Easigrass, which

continues to growandexcel as drought, main-

tenance and environmental factors increase

preference for the installation of artificial

grass, both for landscaping and commercial

purposes.

“WithEasigrass,wehaveastrongemphasis

on lead generation through digital and social

mediaadvertising, whichour partner network

can leverage,” he explained. “This network is

expandingsteadilyandisexpectedtocontinue

throughout 2017 both locally in South Africa

and internationally in the SADC region.”

Zarrebini envisages further increases in

market share with various product catego-

ries. “The demand for recycled rubber paving

productsisexpectedtoincreaseasconsumers

andbusiness clients source productswith en-

hanced green credentials. We expect growth

to continue throughout the year as we add

further capacity to our production.”

In the flooring segment, he foresees in-

creased growth for their resilient and hard

flooring products this year, including luxury

vinyl tile (LVT) planks in different sizes and

colours, water-resistant laminate flooring

and “our more recently launched woven

vinyl tiles”.

“We have also expanded our range of

commercial and residential flooring options

and will launch new products later this year.

“We remain focused on being at the fore-

front of environmental sustainability inSouth

Africa in the industries in which we operate,”

he concluded.