Afrox scores another deal

Afrox has secured yet another contract to supply products to a local company, this time signing up Sappi in a R80 million deal.

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Johannesburg - Afrox has secured yet another deal to supply products to a local company, this time signing up Sappi in a R80 million contract.

Under the contract, the chemicals company will provide Sappi with bulk Oxygen and Nitrogen to its Ngodwana Mill in Mpumalanga. Sappi has recently invested in the mill to service the dissolving wood pulp market.

The deal will kick off next April, Afrox said in a statement to shareholders.

MD Schalk Venter said the “long-term contract is aligned with our strategic intent to grow volumes and market share.

Earlier this month, Afrox said it had landed a R200 million liquid petroleum contract extension with a “major supplier to the South African retail industry in the Western Cape”.

The company said the deal is to supply the gas to its long-term customer until 2022.

This followed its retention of its deal with Massbuild to supply that retailer with LPG. That deal is worth R130 million and is valid until September 2020.

Massbuild operates several brands that supply the building industry with gas, including Builders Warehouse, Builders Express and Builders Trade Depot.

Afrox is the sole supplier of LPG to Massmart.

In August, Afrox noted it had kept its R57 million deal to supply industrial and medical gases, welding consumables and bulk LPG to De Beers for the next five years.

The De Beers deals followed its retention of a R70 million contract to supply Anglo American Platinum with its compressed gases requirements over the next five years.

Afrox reported revenue 6.5 percent lower in the six months to June, down to R2.7 billion, because of lower LPG prices.

However, its operating profit gained 10 percent or R46 million to R486 million.

IOL