How we are structured to do business

The Linde Group (owns 50.47% of Afrox)

The Linde Group is a global company, focused on gases, engineering and technology solutions.

Afrox

Afrox operates in South Africa and in seven other African countries, permanently employing 2 092 people across sub-Saharan Africa. We operate and report according to four business segments.

Atmospheric Gases

Products and services: Atmospheric Gases are gaseous oxygen, nitrogen and argon supplied from various feed gas providers and our air separation units (ASUs). CO2 is obtained via a limited pool of local feed gas suppliers. Refinement of CO2 through a purification process is required to bring the grade of the product to an acceptable level of quality for use by customers.

Distribution channels: For Atmospheric Gases and CO2, we use bulk liquid tanker distribution or dispatch cylinders via road freight to merchant consumers. We also use our Gas & Gear outlets for direct sales to the end user. Linked pipelines are often used to service larger industrial customers.

Our Merchant and Packaged Gases (MPG) business manages our supply chain, warehousing and distribution needs for Hard Goods, sale of LPG and the regional sales infrastructure. LPG and filling plants are managed within the MPG structure.

Markets served: Industrial, medical, hospitality and specialty.

Revenue
R2 283 million (2016: R2 319 million)

GPADE margin
34% (2016: 37.4%)
GPADE: R777 million
(2016: R868 million)

Liquefied Petroleum Gas

Product and services: Packaged LPG, branded as ‘Handigas’, is supplied in smaller cylinders for lower volumes. Higher volume demand is met through larger cylinders or direct delivery to bulk end users.

Distribution channels: Our cylinder gas is obtained from local refineries or imported directly and transported by cylinder or in bulk. Distribution is managed by our logistics department.

Markets served: Our smaller LPG cylinders have many industrial and domestic applications, including heating and cooking, making them versatile and useful in all major sectors of the South African economy. Our larger bulk options are primarily used in manufacturing, larger commercial activities, retail and hospitality.

Revenue
R1 994 million (2016: R1 797 million)

GPADE margin
21.3% (2016: 20.5%)
GPADE: R425 million (2016: R369 million)

Hard Goods

Product and services: Arc equipment, gas equipment, welding consumables and a range of other products. Includes strong brands such as Vitemax® and Saffire®.

Distribution channels: Manufactured and imported products are sold through direct and indirect Afrox sales infrastructure to normal and bulk customers. Products are exported throughout Emerging Africa via our network of partners and direct selling through Afrox facilities in‑country. Our Gas & Gear outlets further ensure direct access for customers.

Markets served: Any industry where welding or component products are used. This includes light industry, manufacturing, mining, power generation and construction.

Revenue
R660 million (2016: R666 million)

GPADE margin
36.7% (2016: 34.8%)
GPADE: R242 million (2016: R232 million)

Emerging Africa

Products and services: Emerging Africa provides the full range of Afrox products and services to Emerging Africa, with the more significant products being LPG, CO2, Atmospheric Gases, Medical Gases and Hard Goods components.

Distribution channels: Afrox subsidiaries and Linde-owned, Afrox-managed businesses outside of South Africa report to a centralised management structure for Emerging Africa. Products are distributed via the most appropriate methods based on product and customer preference, be it cylinder or bulk.

Markets served: Industrial markets, including manufacturing, mining, medical, food and beverage, hospitality, retail and various other commercial activities in domestic markets.

Afrox’s Emerging Africa subsidiaries and ownership levels are: Botswana (100%); Malawi (79%); Mozambique (100%); Namibia (100%); and Zambia (70%).

Revenue
R756 million (2016: R755 million)

GPADE margin
43.1% (2016: 40.3%)
GPADE: R326 million (2016: R306 million)

Corporate and enabling functions

Our business segments are supported by the enabling functions of finance, SHEQ, information systems, communications, procurement and human resources.

Further support is provided by the South African-based support services, channels to market (marketing, sales and distribution), customer services, strategy and risk, and performance transformation.