South Africa-based blasting and explosive solutions specialist BME has taken another significant step in its globalisation strategy through the recent signing of a joint venture (JV) with a leading Indonesian player.
The mining subsidiary of Omnia Holdings, BME has signed a Conditional Sale and Purchase of Shares Agreement with PT Multi Nitrotama Kimia (MNK), an Indonesian market leader in the provision of explosives and blasting services. The JV – called PT Kemitraan MNK BME – combines BME’s innovative technology, products, and solutions with MNK’s local networks, experience, and resources. The JV creates an integrated offering with an expanded suite of products and services for both surface and underground mines.
According to Ralf Hennecke, Managing Director of BME, the JV marks a step change in BME’s international growth. It will allow a broadening of its business base to include MNK’s current contracts, which will be ceded to the JV in a phased manner.
“BME will have faster access to market, greater diversification and will be well positioned for the future as a major player in the growing Indonesian and Asian markets,” said Hennecke.
BME Business Manager in Indonesia, Agusman, highlighted that the synergies between BME and MNK positioned the companies well to grow market share together. BME’s innovations have included its AXXIS electronic initiation system and other digital blasting tools, its range of specialised emulsion explosives, and the incorporation of used oil as a fuel agent in its emulsions. For its part, MNK has strong relationships with the country’s major miners, and a track record of over 30 years as an established ammonium nitrate manufacturer.
“We have been actively supplying explosive products and accessories into Indonesia for more than a decade and began partnering with MNK in 2019 on a large mining project,” said Agusman. “This has been a very successful collaboration, leading to us commissioning our first mobile manufacturing units (MMUs) and emulsion plant outside of Africa.”
On this project, he noted, BME became the first multinational mining supplier to receive a good mining practice award (UTAMA) in the blasting services category by the Indonesian government. It was this kind of recognition that helped pave the way to the JV with MNK, he explained, and which showed the future potential of the venture.
“Bringing world class technology such as our Blast Alliance suite of digital solutions, as well as our MMUs, emulsion plant and other developments, we are looking forward to sharing knowledge and skills in Indonesia,” he said. The JV is expected to have a positive impact on local employment through job creation, with the partners focused on the highest standards of safety and operational excellence.
The joint venture is in line with the global expansion strategy of Omnia Holdings, said Seelan Gobalsamy, Group Chief Executive Officer of Omnia Holdings.
“This marks the further execution of our strategy to seek growth in new markets through acquisitions and partnerships,” said Gobalsamy.
According to President Director of MNK, Ratno Paskalis Hendrawan, MNK is in a strong position for growth as the leading provider of mining explosives and blasting services company in Indonesia.
“Culturally we are confident that both companies are a good fit, having developed a sound relationship during the establishment of contracted blasting services,” said Hendrawan. “We are excited to extend the partnership and expect that there will be a transfer of knowledge and technology, which in turn will enhance the capabilities of the blasting services team, to reach a wider customer base and increase value to all stakeholders.” Agusman said that Indonesia had a bright future as a mining country, creating an exciting platform for growth for the JV. Minerals which are likely to be in demand for several decades to come, as gold, copper, aluminium, nickel, tin, bauxite and coal, provide a good base for the venture.