African Chemicals has expanded from distributing industrial chemicals to becoming a significant manufacturer and supplier of caustic soda and liquid chlorine for leading international precious metals mining companies
The chemicals industry in South Africa dates back to the 19th century, a period that could be described as the country’s industrial revolution, necessitated by the mining sector providing opportunities presented by gold and diamond mining. The chemical sector’s contribution to GDP is 3.4% and contribution to manufacturing is 22.8%. South Africa produces around 600 types of chemicals. The chemicals value chain constitutes one of the largest contributors to manufacturing output in the country.
In 2015, entrepreneurs, Lesiba Gwangwa and Thabiso Manama sought to empower African industrial consumers with quality chemical products and services in a manner that reduces and optimizes their total costs. It was in the middle of a global economic crisis and a recession in South Africa that the pair launched African Chemicals as an industrial chemicals production and distribution company with a focus on the South African and Congolese markets.
CEO of African Chemicals, Lesiba Gwangwa, says in Africa there are only two countries that produce caustic soda: South Africa (240 dry metric tonnes per year) and Egypt. And the only companies which produce these chemicals in South Africa are NCP Chlorchem (a leading manufacturer of chlorine, caustic soda and chlor-alkali derivatives) and SASOL (an integrated energy and chemical company).
“The cost of constructing a caustic soda production plant in South Africa is approximately R2 billion and the most recent attempt to construct a plant in Port Elizabeth was cancelled due to volatile electricity supply and other factors. As a result, capacity increases are limited and additional demand (any demand beyond domestic production capacity) has to be satisfied by imports, which account for approximately 34% of total demand,” says Gwangwa, adding that the majority of chemical products in South Africa are used for pulp and paper followed by mineral processing.
South African prices are driven by both currency exchange rate, domestic output and domestic factory maintenance shutdowns,” says Gwangwa, a registered engineer with the Engineering Council of South Africa (ECSA) and a Professional Member of Project Management South Africa (PMSA).
He also holds a B-Tech degree in Construction Management from the University of Johannesburg and an International Diploma in Professional Project Management from University of Cambridge in the UK. With over twenty years of extensive work experience focussed on mining engineering, chemical manufacturing, civil and structural engineering and project management, his track record has more than prepared him to spearhead transformative projects in Africa and beyond.
The company’s Business Strategist, Thabiso Manama, is passionate about the company’s values, which he says, define their work ethic and commitment to intelligent innovation. “Our brand promise; impossible is potential, underpins everything we do at African Chemicals. We are guided by our values, which are passion, intelligence, respect and collaboration.”
“Collaboration for us means to work jointly on an activity to create or produce something. We believe that each individual and organisation has something of value to offer which is unique and special. We also believe in harmonising all contributions in the interest of achieving the ultimate goal of introducing innovation into markets,” he says.
Manama, a tried and tested executive who holds an MSc degree from the University of Witwatersrand, is a metallurgical engineer by profession. His journey began in the mining sector as a metallurgist for a JSE-listed company. Manama was also a research scientist in the steel fabrication environment for a short stint before becoming a process engineer for the second largest steel company in South Africa. His commercial experience began when he worked as a global commodity manager in a supply chain division for the largest mining company in South Africa for six years and after that for a French oil company for a year in the similar role. With both commercial and technical capabilities he later branched out into entrepreneurship and created several start-up companies.
Gwangwa says their complementary technical competencies and leadership capabilities enabled them to create a shared vision to expand the business and take significant risks.
“In order to take advantage of the growing demand which domestic producers are unable to satisfy, African Chemicals decided to build a dissolution plant which will produce caustic soda lye in Chloorkop at competitive pricing and several TCO benefits to its key customers. The project is part of a collaborative partnership wherein NCP Chlorchem has provided land and warehousing for the construction of the plant through a lease agreement for the plant. This is a significant milestone in our journey towards empowering African industrial consumers with quality chemical products and services in a manner that reduces and optimizes their total costs,” Gwangwa adds.
The company acknowledges the difficulties of operating amid a global pandemic. Says Gwangwa: “Covid-19 presents a tumultuous period across the board, with governments and companies pledging significant behavioural change. In the context of these challenges, there are opportunities. As African Chemicals, we saw a significant shift in driving strategic projects and delivering on our core purpose. Importantly, these significant milestones occur within a self-funded industrialisation project whose supply chain spans logistics companies, truck owners, engineering consultants, legal expertise, ICT, reputation management and brand specialists. To this end, we are cautiously optimistic about the year ahead, as we accelerate our efforts towards an integrated industrial chemical manufacturing and distribution brand in Africa.”
Manama accentuates that the company remains firmly focussed on its vision: “As a group of companies within Penuel Holdings, we continue to advance our journey towards supplying key chemicals in the industry to some of Africa’s listed entities.”
“As a brand founded by engineers, we understand various mining and industrial manufacturing processes which positions us to better add value to our customers in the form of optimization initiatives. These include the use of vendor managed stock, storage within proximity to the customer’s premises and world class strategic sourcing techniques. With our operating office in Johannesburg, we are able to deliver products to any location in South Africa or the SADC region through low cost and reliable transportation done by our third party partners.
“As a group, we empathize with various businesses and stakeholders who may have experienced loss of business or reduction in revenue due to Covid-19. We also wish to express our gratitude to all our clients, stakeholders and partners for your support in enabling us as a group to turn the crisis into an opportunity. We are resilient in rebuilding what has been broken and commit to fully support all our clients in achieving their strategic goals beyond 2021,” Manama concludes.