Press Release

National Empowerment Fund announces progress on feasibility studies to commercialise the R40m Nkomazi Chemicals Technology

Leading empowerment agency, the National Empowerment Fund (NEF), has announced positive progress on the feasibility studies aimed at commercialising a locally-developed plastics chemical additive that will make rigid plastics less environmentally invasive. The NEF together with the Innovation Fund has already financed a two-phased study into the feasibility of scaling up an existing lab-scale plant at Nkomazi Chemicals in Midrand to a commercial scale plant to be built in Malelane, in the Mpumalanga Province. The plant will have an annual capacity to produce 400 tons of this new chemical additive, a heat stabiliser called hydrotalcite.

The deal, which is in line with the NEF’s mandate of fostering and supporting broad-based black economic empowerment (BB-BBE), is one of a series of recent investments aimed at rapidly increasing black participation in strategic industries and enterprises.

Nkomazi Chemicals (Pty) Ltd was established following the completion of a research and development project funded by the Department of Science and Technology through its investment arm, the Innovation Fund. Over the past five years, it has partnered with leading chemicals company, Chemserve, in order to conduct on-site trials aimed at standardising a chemical formulation that replaces the current imported heavy metal based hydrotalcites which are not environmentally friendly with South Africa’s developed environmentally friendly hydrotalcite. 

“Nkomazi’s Hydrotalcite, which will be marketed under the brand name Pyrosorb, represents a quantum leap forward in plastics manufacturing,” says Donovan Chimhandamba, Head of the NEF’s Strategic Projects Fund.

“It is a magnesium-based, lead-free chemical used in plastics manufacturing or PVC conversion industries, used as an efficient acid absorber that prevents the thermal decomposition of PVC during manufacturing of rigid plastics. When used in the manufacture of plastic pipes or products, it replaces the traditional heavy metals such as lead, barium and cadmium which is a major breakthrough when considering environmental hazards associated with the disposal of waste that contains these metals.  The trials to date have been successful and have proven that in terms of its performance as heat stabiliser, Pyrosorb will still be at par with the traditional heavy metal based hydrotalcites and superior as an environmentally friendly chemical. Other key properties it imparts to the PVC conversion process is that it also reinforces the fillers, reduces smog and acts as a flame retardant.

It is these unique qualities that will make plastic more environmentally friendly, and which are set to see the locally-developed chemical additives being taken up rapidly into markets around the world.

“Having started out by financing black-owned small and medium enterprises, and by supporting some of the country’s largest and most innovative empowerment share schemes, the NEF is now extending its focus to include facilitating BB-BEE ownership of and participation in strategic sector companies such as this one,” says Chimhandamba. “We see this as the way of the future, and the path to meaningful transformation and development of the South African economy.”

The new deal will, according to the NEF, have significant impact in a number of different areas.

“In the first instance, it will facilitate yet another development of new industrial and manufacturing capacity in South Africa, which is one of the key objectives that underscores all of our strategic projects,” says Chimhandamba.

“Secondly, the manufacturing plant will be built in rural areas neighbouring Malelane in the Nelspruit area and exemplifies NEF’s strategic intent of increasing investment into economically sidelined regions, and aims to stimulate the economic activity and independency of these poverty nodes,” says Chimhandamba.

“It will also see this new ‘green’ technology, which has been developed right here by South African scientists being used predominantly in the PVC and plastics manufacturing all over the world which will enhance the country’s reputation for innovation around green technologies.”

As far as the critical issue of job creation is concerned, the project will create up to 50 new skilled jobs, specifically for individuals from historically-disadvantaged communities. It will also generate important export revenue.

“South Africa is leading the way in many areas of scientific and technological innovation,” concludes Chimhandamba. “We are taking up our rightful place in advanced technology industries, and are proving to be a creative and energetic player.

“As importantly, we are building skills and knowledge capital amongst a growing pool of black professionals by facilitating transformation at all levels, right from ownership level through to management and the workforce. Together with other key investment objectives, this goal enjoys top priority, and has the enthusiastic support of shareholders and South African Government.”

“The NEF is proud to be involved in yet another extraordinary venture, which is being piloted by extraordinary people. We are looking forward to hydrotalcite transforming the way in which rigid plastics are manufactured and used worldwide,” concluded Mr Chimhandamba.

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