SNPE and H&R WASAG intend to create leading explosives group
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The French chemical group, SNPE, and the German special chemicals producer, H&R WASAG, have entered a process aiming at merging their explosives activities. The move will create a leading company in Europe for civil explosives materials with considerable growth potential and high earning power. The merger is the joint answer to the opportunities and challenges presented by a market that has expanded to include 10 new countries and will radically impact the European explosives market.
In a letter of intent, SNPE and H&R WASAG have confirmed their intention of merging their activities in the production and distribution of civil explosives products in a Joint Venture. The merger is to be completed in 2004 and is still subject to regulatory approvals, including approval of the relevant anti-trust authorities. The new company will have a sales potential of approx. 150 m Euro p.a., and will enjoy a leading position in particular in France, Germany, Belgium and Hungary. In addition, the company will be sufficiently large to successfully exploit the opportunities in the future markets of Eastern Europe. Here the explosives markets are set to enjoy high growth in the coming years due to the investment needed in the local infrastructure.
The explosives activities of both companies complement each other in an ideal fashion. SNPE is represented in the civil explosives market in France through NEF 'Nobel Explosifs France', and in Belgium through NEB 'Nobel Explosifs Belgique'. H&R WASAG AG will contribute to the joint venture the Westspreng group, Wasagchemie Sythen and WANO. Together, both parties have a broad range of products in the field of civil explosives. The group has the technological lead in the area of modern emulsions through the use of its pump technology developed at Westspreng and through high energy packaged emulsions developed by NEF. The group also has a tight distribution network in Eastern Europe through Westspreng. The new company will therefore be well positioned in Europe, both in terms of its geographical presence and with regard to its product range and technical expertise.
However the merger will not only be immediately large enough to exploit the opportunities of the expanded European market in an efficient manner, it will also form the basis for further growth through the acquisition of other European suppliers and alliances with explosives companies operating worldwide.
This unique historical alliance therefore represents the starting signal for the much needed consolidation of the fragmented European market, which is characterised by many national companies. Due to the historically determined political fragmentation within the continent, most European countries have in the past laid a protective hand over their national explosives companies while in other regions and markets the globalisation desperately needed for economic reasons has indeed taken place. In order to exploit the opportunities of a growing European market larger business entities are required.
The joint venture between SNPE and H&R WASAG will not only play a decisive part in shaping this urgently needed consolidation in Europe, it will also enjoy a leading role in influencing and accelerating the imminent generational change in explosives technology. The use of dynamite in the mine and quarry industry (particularly also in the construction business) will be replaced in future by technologically more sophisticated products. In particular, this will include highly developed emulsion technology. Emulsions are characterised by a higher degree of safety in the production process, storage and transport as well as in their use. This merger will enable the internationally leading technological expertise of the new company to be profitably marketed and will enhance capabilities in further investing on security and safety programs which will remain a driver in this industry.
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