Global valve giant invests R100 million in local manufacturer.
A majority stake in South Africa’s Premier Valves Group (PVG) has been acquired by AVK, one of the world’s leading valve manufacturers. The R100 million investment will see AVK South Africa become compliant with the DTI’s new Designation Law, requiring State Owned Entities to buy locally manufactured products with a 70% local content.
PVG’s existing factory in Alrode Johannesburg will be upgraded with new machines, facilities and buildings, creating 80 new jobs. AVK will also set up a modern state-of-the-art resilient seal valve (RSV) manufacturing unit at the Alrode plant producing up to 80 000 RSV’s per year.
“This acquisition represents a substantial, confidence-boosting, inward investment by one of the world’s leading valve manufacturers. This attests to the efficacy of DTI policy aimed at re-industrialising South Africa to meet the requirements of its state owned enterprises and infrastructure spend by providing large volumes of world-class, competitively priced valves locally, defraying concerns over quality, capacity and delivery time,” said Tjaart van der Walt, Director, AVK Holding Southern Africa.
PVG is one of South Africa’s largest and longest established valve manufacturers. Whilst PVG supplied many of the valves in South Africa’s major power stations and water infrastructure projects, cheap imports from China prior to the DTI’s designation of valves for local content forced PVG to downsize and import valves to survive.
PVG is now in the process of re-building its productive capacity in support of the DTI’s policies. Selling a majority stake to AVK will provide PVG the finance and technical support to meet the needs of South Africa’s state owned enterprises for local content procurement.
AVK is one of the world’s leading valve manufacturers with manufacturing operations in nine countries. The company has a net turnover of approximately ZAR 6.4 billion and is present in 80 countries.
“AVK is committed to making a substantive phased investment in commencing local manufacture of its range of world-class valves and flow control fittings, and, at the same time, expanding the manufacturing capacity of PVG’s products,” said van der Walt.
AVK’s investment will fund the creation of a new international standard for local production capacity in support of the DTI’s designation policy, creating new employment opportunities through the value chain. The AVK investment will also introduce the latest international production technology and green processes to the South African industry. Knock-on benefits will include the acceleration of green technology as skills and high tech production and foundry capacity are made available to non-valve sub-suppliers and external customers.
Increased local production as a result of AVK’s investment is anticipated to have a, “sales value of up to R400 million per annum – being the value of import substitution plus additional exports delivered through AVK’s international sales network,” added van der Walt.
AVK is also considering the feasibility of establishing an advanced green foundry in South Africa. This offers the potential for a further R300 million investment in plant while introducing new skills to the industry and creating more jobs.
Peter Thomson, Managing Director of PVG for the past 10 years will remain as Managing Director of PVG. He will also be a Director of AVK Holding Southern Africa. PVG’s range of products will continue to be marketed under its own brand. Brian McGugen has been appointed as the new Managing Director of AVK Southern Africa, producing and marketing AVK branded products as AVK Valves Southern Africa. The two companies will work closely together to expand and strengthen the overall position of AVK in the Southern African market.
About AVK Group
The AVK Group is a privately owned industrial group that currently comprises 77 companies. AVK’s core business is the production of valves, hydrants and accessories for the water and gas distribution network, sewage treatment and fire protection. Furthermore, AVK has built up strong brands supplying valves and controls for water treatment, dams and reservoirs, HVAC, chemical processing, marine and other industrial sectors. AVK products are designed to international standards and are sold in more than 80 countries worldwide.
About Premier Valves Group
Premier Valves (Pty) Ltd is a privately owned company that has grown over a period of more than 50 years to become one of the largest manufacturers and suppliers of valves for the water industry in Southern Africa. Premier’s 22,000 square meter factory premises in Alrode, Johannesburg obtained its ISO 9001 Accreditation in 1996, and is well known for both the manufacture and repair of large bore valves of up to DN3000.
For further details contact Premier Valves on TEL: 011 908 3760 or visit www.premiervalves.com