JSE-listed chemicals group AECI will dispose of its wholly-owned water and process solutions subsidiary ImproChem Public Water business to a South African majority black-owned special purpose vehicle, with water treatment speciality chemicals business Nsukutech as the controlling shareholder and Junaco, incorporated in Tanzania, as the minority shareholder.

It has also successfully concluded the divestment of Much Asphalt. This disposal closed in line with the previously guided purchase consideration of R1.1-billion. The purchase consideration has been transferred to AECI and will be used in line with AECI's capital allocation framework, it says.

The Public Water Business is a separate division of ImproChem's water business and includes the manufacture and supply of water treatment chemicals for engineered water treatment solutions, and supplying other complementary products to the public water sector.

The Public Water Business will continue to supply its direct clients and distributor network in anticipation of a smooth transition of assets, capacity and contractual opportunities to the buyer and will ensure continuity of service and supply into the public water market, once the proposed transaction is concluded, AECI says.

“Divesting our Public Water Division delivers on our strategy to dispose of noncore assets, streamline operations and optimise our portfolio. It will support our capital allocation strategy and position AECI for sustainable growth and to focus on improving the performance of our core business,” says AECI Group CEO Holger Riemensperger.

Nsukutech specialises in the manufacture of speciality chemicals for water treatment, mineral processing and other applications. Junaco is a Tanzania-based supplier of water treatment chemicals and equipment across Eastern and Southern Africa.

Junaco has played a key role in the export of AECI's water treatment chemicals across Africa, with a partnership that has spanned over 15 years, AECI says.

Meanwhile, the disposal of Much Asphalt aligns with AECI's strategy of optimising its portfolio and creates a platform for growth.

AECI is focusing on its core businesses, namely AECI Mining and AECI Chemicals, while divesting from managed businesses that offer limited synergies with the chosen core businesses.

This strategic shift aims to streamline operations, enhance efficiency, and leverage in-house expertise by concentrating efforts on areas where AECI has a competitive advantage and strong market potential, the company says.