MechChem Africa March 2017

PFE International performs well in tough economic conditions in 2016 and foresees increased market share this year. Environmental sustainability through resource recycling

P FE International remained focused on its long-term strategy during 2016 in a stagnated South African economy and a business climate with little or no sign of an upturn on the horizon. This is according to Mehran Zarrebini, CEO of the group of companies which in- cludes Van Dyck Carpets, Easigrass, tyre recyclers Mathe Group, polypropylene staple fibre producer PFE Extrusion and Envirobuild, manufacturers of eco-friendly rubber flooring. “Despite difficult trading conditions, our companies performed well this year through balancing operational riskwithfinancial risk,” he said. “Recent economic data and monthly in- dicators point to expectations of little or no significant recovery in2017. Growth remains a particular concern for SouthAfrica coupled with high levels of unemployment, political turmoil and a lack of investor confidence. Whilst the country managed to steer clear of a ratings downgrade in 2016, it is still un- certain whether the country can continue to navigate through this headwind during the course of this year. “As a family-owned entity with a turnover of more than R600-million, we are cost-and risk-conscious.Wescrutiniseinvestmentsand expansion plans whilst remaining committed to South Africa and to further investment in our diversified portfolio of companies. We continuously aim tomanage and position the group for the long term.” Looking back on 2016, Zarrebini said that

load shedding had had a significant impact on the group’s operations. “Our extrusion facili- tieswere severely affecteddue tooperational requirements with respect to heating. This resulted in decreased output. Fortunately, as the load shedding subsided, it was possible to meet customer requirements,” he said. Being an organisation that trades inter- nationally, PFE was also at the mercy of ex- change rate fluctuations. “Our focus is on the production andmanufacture of rawmaterials and products and not in hedging currencies. Whilst various options are at our disposal to mitigate currency risk, including forward contracts and managing currency exposure through business practices, our approach has been one of prudence and risk minimisa- tion. There is just too much uncertainty and volatilitytosuccessfullyemployanyparticular method,” Zarrebini said. PFE invested in significant capital projects during 2016 – in the installation and commis- sioningof newmachinery aswell as inupgrad- ing processes and improving efficiencies. Mathe Group saw the largest invest- ment – in a new tyre facility commissioned in February,whichhasnowprocessedmorethan 100 000 truck tyres. “We expect increased off take this year as we secure new clients in different industries and look forward to be- coming the leading processor of waste tyres in South Africa,” Zarrebini said. “The new waste tyre processing facil- ity led to investment in new machinery at Envirobuild for the manufacture of commer- cial rubber flooring fromMathe Group’s rub- ber crumb. Further investment is planned in the use of rubber crumb for the manufacture of novel and innovative new products. “Because the industry is still in its infancy in South Africa, our focus will then shift to- wards activities suchas educatingprofession- als and potential future consumers about the benefits of using these products.” Polypropylene staple fibre producer, PFE Extrusion, also saw investment in new tech- nology last year. “This was necessary to re- maininternationallycompetitivewithastrong emphasisonincorporatingresourceefficiency and resource reduction into themanufacture of the different products,” Zarrebini said. “Over the past few years we have seen supplies of rawmaterials become scarcer, and thus more expensive. They are also subject to price volatility. Our focus remains an op-

portunistic one as we continue our journey to transform our operations and increase re- source productivity and rethink our business model to capture value residing in resource ownership.” Headdedthathebelievedtheminimisation of resource usage would continue to unlock significant value whilst establishing greater operational stability throughout the group. Zarrebini is very optimistic about the group’s artificial grass brand, Easigrass, which continues to growandexcel as drought, main- tenance and environmental factors increase preference for the installation of artificial grass, both for landscaping and commercial purposes. “WithEasigrass,wehaveastrongemphasis on lead generation through digital and social mediaadvertising, whichour partner network can leverage,” he explained. “This network is expandingsteadilyandisexpectedtocontinue throughout 2017 both locally in South Africa and internationally in the SADC region.” Zarrebini envisages further increases in market share with various product catego- ries. “The demand for recycled rubber paving productsisexpectedtoincreaseasconsumers andbusiness clients source productswith en- hanced green credentials. We expect growth to continue throughout the year as we add further capacity to our production.” In the flooring segment, he foresees in- creased growth for their resilient and hard flooring products this year, including luxury vinyl tile (LVT) planks in different sizes and colours, water-resistant laminate flooring and “our more recently launched woven vinyl tiles”. “We have also expanded our range of commercial and residential flooring options and will launch new products later this year. “We remain focused on being at the fore- front of environmental sustainability inSouth Africa in the industries in which we operate,” he concluded. q

The Mathe Group’s new waste tyre processing facility led to investment in new machinery at Envirobuild for the manufacture of commercial rubber flooring from rubber crumb.

34 ¦ MechChem Africa • March 2017