Blowing Open The African Market

By Rodney Weidemann.

When your business is explosives, especially when you are among the top three producers in the world, focusing on the priorities of life and safety simply has to be core to everything you do. This is certainly the case for Enaex, a company that is dedicated to creating a safer and better industry for the future, by humanising mining.

Enaex Africa’s CEO Francisco Baudrand notes that apart from this life-affirming goal, the company has expanded into Africa to help drive long-term growth and new investment opportunities in the mining industry.

“South Africa was the beginning, and from here, there have been expansions into countries like Botswana and Zambia, which have allowed for local partnerships, job creation, training and upskilling, all while investing in new projects to expand the mining industry,” he says.

The South American connection

Baudrand says he joined Enaex in 2011 as a young manager, taking on the position of business development director. This led to him being placed in charge of business development and strategic planning at Enaex’s head office in Santiago, Chile.

“At the time, Enaex was only focused on the local Chilean mining sector, through the ammonia nitrate production and blasting services it provided to the industry – although we did have a small operation in Argentina as well.

“As a business development director for Enaex, my role included taking the lead in identifying and leveraging the capabilities that our explosives offered internationally for the mining industry as a whole. This gave me a strong appreciation of the potential international explosive market.”

He adds that appreciating the international market soon led to the launch of a business in Colombia, with Enaex investing in a business in Peru just two years later. He was also part of the team that participated in the acquisition of a Brazilian subsidiary, closely followed by a key game changer, notably the 2015 acquisition of Davey Bickford, a French subsidiary that produces electronic initiation systems.

“This particular acquisition was a very important one in our history, because at the time, Enaex didn’t have an electronic initiation solution. Moreover, while the new subsidiary significantly improved our product set, Davey Bickford was also already an international company, selling its products in the United States (US), Mexico, Latin America, and Australia. This really boosted our global footprint.”

In fact, notes Baudrand, Enaex used the footprint of Davey Bickford to help build its business in the US and Mexico.

“My most recent role was where I took the lead in driving forward a joint venture Enaex undertook with Sasol, which is ultimately how I became the CEO of Enaex Africa,” he says.

Gateway to Africa

Pointing out that the Sasol explosives business was identified as having substantial growth potential, something that could best be unlocked with the collaboration of an international partner, he adds that the company also saw South Africa as the gateway for an expansion into Africa.

“For example, we knew that Botswana, with its strong mining sector, was a place we could supply explosives to, directly from South Africa. Moreover, there was a previous history with Sasol in the region. Botswana is a country where we are seeing important foreign investments in new projects, which means the country will continue its mining growth, along with its increasing consumption of explosives – which is, of course, our core business.

“In June 2019, after a robust evaluation, Enaex was selected as the preferred strategic partner to create a world-class explosives business on the African continent through the acquisition of the Sasol explosives business. In July 2020, Enaex Africa commenced operations as the majority shareholder and controlling partner, with the current shareholding including Enaex (51%), Sasol South Africa (23%), and AFRIS, as a BBBEE partner,
with 26%.”

Enaex Africa is undoubtedly the most important direct Chilean investment in South Africa, notes Baudrand, and probably on the entire continent. The acquisition of Sasol’s explosives business was thus the first stage of expanding the company’s footprint across Africa.

“Of course, this first stage also involved substantial investments in South Africa. Firstly, we invested in our Secunda plant, to increase the capacity of our bulk emulsion production. We have managed to increase our capacity by 20%, along with growing the warehousing, for storage of bulk emulsion, by 50%,” he says.

“This was our first important investment, and was done in parallel to another project, namely the construction of a first out of Europe assembly plant for electronic initiation systems. This will allow us to increase our local procurement, employment opportunities and skills development for our youth, and in the long run [provide] a better quality of life for families.”

Enaex has also invested capex in order to increase its fleet of MMUs (mobile mixing units), which are the trucks used specifically in opencast mines. He explains that the company has also invested capex to increase the number of pumps that are used in underground mines, to pump bulk emulsion as well. Both are investments of growth, and form part of a long-term plan whose core focus is growth.

“I need to add that Africa is a very challenging continent, and we have faced difficulties especially within the supply chain. During October this year, we have been challenged, along with many other suppliers in this industry, to fulfil all our contracts. I believe it is very important that we are always honest and transparent when we are overcoming difficulties.”

The future is bright

Already, the move into the African market, via South Africa, is paying dividends. Enaex now has operations outside SA, with businesses in Namibia, Lesotho and Botswana. In addition, Baudrand states that the company has plans to move into the copper belt soon, mainly in Zambia.

“We believe Enaex Africa was born to become the leaders in mining explosives on the continent, and with these expansions, our goal is to partner with key local entities, where people have the intimate knowledge of the businesses, partners and people in the local mining sector.

“Local market knowledge is always critical, particularly in countries that continue to grow their mining industries. After all, such growth will obviously require foreign investments, but these are best directed using local understanding of the sector and markets.”

Baudrand suggests that as far as the future of Enaex and Enaex Africa is concerned, it certainly includes the expansion into green ammonia production for explosives. Enaex in Chile is already taking the lead with this, he adds, and has launched both its strategy and implementation. The company is now slowly beginning to produce green ammonia for ammonium nitrate production, the key raw material for explosives. Using green ammonia is beneficial, for example the protection of resources and the environment, and is well aligned with modern mining customers’ interests and focus.

“For us, the goal is all about building a safer future on the African continent regarding mining, through the importation of tele-operated devices and robotics, which will also allow for upskilling in the local communities, from which we hope to draw the employees who operate them.

“In fact, at Enaex Africa we value safety above all, and we put it first in everything that we do. We include this value when we expand our operations into different countries across the continent. This is because not only do we want to keep our employees safe, but we also want to enhance their skills and train them correctly. And our goal is to do all of this while establishing healthy, local partnerships that continue to build and grow the economies in which we choose to expand our footprint,” Baudrand says.