Durban - The acquisition of Tongaat Textiles by Stefano Magni, the executive chairman of Aranda Textile Mills, would help boost Aranda's fledgling exports to between 20 percent and 25 percent of sales within three years, Magni said yesterday.
Last year Tongaat Textiles, Tongaat-Hulett's home textiles division known as David Whitehead, exported about R60 million of its R331 million revenue under the Whiteheads brand.
In the 12 months to last December Tongaat-Hulett generated R5,3 billion in revenue.
The value of the acquisition was not disclosed but Steven Saunders, the group executive director for Tongaat-Hulett, said the division's capital employed was less than 5 percent of the group's overall capital employed.
Aranda, a family-owned business which manufactures yarns, blankets and fabrics, has two other operations, Aranda Textiles in Randfontein and Associated Spinners in Isithebe.
The divisions, which operate independently under their own identities, each employ 500 workers.
Saunders said: "Magni's acquisition of Tongaat Textiles E will combine a group of companies able to draw on synergies to become an effective competitor domestically and to defend more robustly against international competition."
Magni said that while the local market remained important, the reality of globalisation meant future growth in the textile industry would have to come from exports.
"The Whiteheads brand will consequently be supported and enhanced and exports strengthened," he said.
The deal, which is subject to approval by the Competition Commission, is expected to get the thumbs up within 45 days, subject to certain pre-conditions, and to be effective from early next month.
Saunders said the disposal would give Tongaat-Hulett a sharper focus following the sale of Corobrik, its other remaining non-core business, to Scandinavian Building Systems.
All David Whitehead employees would initially be retained, but Magni said this was a bottom-line issue and "some restructuring" would have to take place.
Tongaat closed unchanged at R42,50 on the JSE Securities Exchange yesterday.