JSE-listed AECI will acquire South African asphalt producer Much Asphalt for R2.27-billion.
“Much Asphalt has a market leading position with long-established customer relationships, a robust order book and project pipeline, and a highly-experienced management team,” AECI said in a statement on Monday.
Much Asphalt will operate as a standalone entity in the AECI group.
It has 17 static plants, four mobile asphalt plants, three static emulsion/modified binder facilities and a bitumen converter across South Africa.
It also has one static asphalt plant in Namibia and employs more than 500 people and its production capacity represents over 50% of South Africa’s installed asphalt capacity.
“Spend on roads in South Africa has increased by a compound annual growth rate of 12.7% over the past six years, evidence of government’s commitment to infrastructure development,” AECI CEO Mark Dytor said.
He added that, as set out in the 2017 budget review, government and State-owned companies plan to spend R327.7-billion on transport and logistics over the medium term.
“The development of road infrastructure on the continent is a prerequisite for economic growth. Given AECI’s extensive footprint, there is plenty of scope to build the business and the dream of a prosperous, thriving Africa,” he said.