Denmark-based valves manufacturer and supplier AVK Valves has acquired a majority stake for a consideration of R100-million in South African valves company Premier Valves, creating a new combined entity – AVK Valves Holdings Southern Africa.

“This acquisition, concluded on July 8, represents a substantial and confidence-boosting investment in the South African valves industry by one of the world’s leading valves manufacturers. The deal will go a long way in helping the country attain its goal of providing large volumes of world-class and competitively priced valves locally,” says AVK Holding Southern Africa director Tjaart van der Walt.

He tells Mining Weekly that Premier Valves and AVK will continue to market their brands separately and that Premier Valves’ existing factory in Alrode, Johannesburg, will be upgraded with new buildings and machinery to make space for the 80 new people to be employed at the factory. AVK will also establish a modern, state-of-the-art, resilient seal valves manufacturing unit capable of producing up to 80 000 valves a year.

AVK manufactures valves, hydrants and accessories for the mining, water and gas distribution, sewage treatment and fire protection industries. It also supplies valves and controls for water treatment facilities, dams and reservoirs, and the chemical processing and industrial marine sectors.

Van der Walt points out that AVK’s R100-million investment will enable AVK South Africa to comply with the Department of Trade and Industry’s (DTI’s) new designation law, which requires State-owned entities to buy locally manufactured products with a 70% local content.

With the help of its Danish parent company, which provides financial and technical support, AVK’s South African entity will be able to rebuild and strengthen its productive capacity in support of the DTI’s policies, enabling it to supply valves to State-owned entities.

In addition to its investment in Premier Valves, AVK will also be investing in South Africa through the manufacture of its range of flow control fittings, which sense and control the pressure and flow rate of transmitted fluid in industrial operations.

“AVK has manufacturing operations in several countries worldwide, including Denmark, the US, Saudi Arabia, the UK, the Netherlands, Poland, Australia, France, Kazakhstan and China,” he says, adding that AVK Valves has a net turnover of R6.4-billion, with a presence in 80 countries.

AVK will also introduce its proprietary production technology and green manufacturing processes into the South African valves industry. This will lead to the transfer of green technology skills to South African workers and the availability of advanced production methods to nonvalve suppliers, such as pipes companies.

“Further, increased local production as a result of AVK’s investment is expected to generate sales of up to R400-million a year – which is the value of import substitution plus additional exports delivered through AVK’s international sales network,” concludes Van der Walt.