“This is a significant expansion of the infrastructure in large parts of southern Africa,” said Jørgen Bech Madsen, CEO of Fibertex Industrial Nonwovens. “Large road and bridge construction projects have been launched and more are under way. Geotextiles are essential elements to such projects and this is where we come in, with our high-tech production at competitive prices.”
Fibertex believes that local production on a state-of-the-art line combined with low production costs and the extensive expertise of Fibertex Industrial Nonwovens in the area will make it an attractive supplier and business partner.
The automotive industry is also experiencing strong growth in southern Africa and this offers the company good opportunities to supply products with limited local availability at present.
For Fibertex, which is owned by the industrial conglomerate Schouw & Co., this is a strategic initiative. After the factory has been run in and the markets have been penetrated, Jørgen Bech Madsen sees a huge future potential in the South African campaign:
“We have competent employees with industry experience to run the factory so we will not be tying up key management resources in the project,” he said. “The factory will have a high-tech, state-of-the-art and competitive production system and we will supply a total Fibertex concept, which means technology and know-how – both in relation to production and administration.”
The factory will have around 40 employees and its annual turnover expected to reach €8-10 million, with decent profit margins, in coming years. From a long-term strategic perspective, the project fserves as a bridgehead – not only to southern Africa, but eventually also to other markets in the Southern Hemisphere such as Australasia, India, the Middle East and South America.
“We see a vast potential in this initiative which both internationalises Fibertex and makes Fibertex Industrial Nonwovens a local and regional player able to compete with the other nonwovens manufacturers in this part of the world,” said Jens Bjerg Sørensen, president of Schouw & Co.
The South African company is jointly owned by Fibertex, the Danish Industrialisation Fund for Developing Countries (IFU) and the South African company Safyr, which is owned partly by local industry specialists and partly by Industrial Development Corporation (IDC) – South Africa’s equivalent to the Danish State investment fund Vækstfonden. Fibertex will invest approximately €3.3 million in the company, acquiring a 26% ownership share. IFU has previously participated in a similar Fibertex project in Malaysia, and the company has the option of acquiring IFU’s 25.8% share in the future.