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Briefcase: Business snippets from around South Australia

Business

In this week’s briefcase, the paint dries on the sale of Wattyl to a Dutch multinational, Codan’s expansion gobbles up another US company and the first Pacific Islanders arrive to help fill the state’s fruit picking shortage.

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Lithium miner achieves battery-grade purity

Adelaide-based mining company Core Lithium says it has produced battery-grade lithium from concentrate sourced from its Finniss Project near Darwin.

In a statement to the ASX last week, the company said it now believed Finniss lithium concentrate quality suitable for the high-end lithium battery, renewable energy and electric vehicle industries.

The concentrate testing work will be included in an updated Definitive Feasibility Study (DFS) for the project. The DFS is due in the first half of 2021 ahead of a Final Investment Decision (FID) and potential construction to begin before the end of the year.

The Finniss Lithium Project was last month given major project status by the federal government and aims to become Australia’s first lithium mine outside of WA.

Located only about 25km from the port of Darwin, the company says the Finniss project is one of the most capital-efficient lithium projects in Australia.

Core Lithium Managing Director Stephen Biggins said the latest test results would give Core and its customers confidence in utilising Finniss lithium concentrates in the global lithium battery supply chain.

“Together with the recent award of Major Project Status from the Federal Government, this program lays a foundation for Core to explore the potential of adding downstream processing infrastructure to our portfolio, incorporating the strong synergies with the infrastructure at the nearby Middle-Arm Industrial Precinct at Darwin Port and aligning with Australia’s national Modern Manufacturing Strategy and expansion of the global lithium battery supply chain,” he said in a statement to the ASX on Tuesday.

The mine is expected to produce 175,000 tonnes of lithium concentrate per annum for up to 10 years, generating more than $150 million in revenues a year.

Core already has a binding agreement with China’s Yahua for 75,000tpa and a non-binding MOU with Geneva-based Transamine Trading for a further 50,000tpa, which in total represents about 70 per cent of production.

According to the federal government, the Finniss Project will generate more than 360 jobs during construction and more than 250 ongoing jobs during operation.

Paint dries on Wattyl sale

The sale of Australian paint company Wattyl to a Danish multinational has been finalised.

Effective from April 1, Wattyl Australia and New Zealand is now officially part of world-leading coatings manufacturer Hempel as the global company aims to strengthen its footprint in Australia and New Zealand.

The move is part of Hempel’s bid to double revenue to $4.6 billion (3 billion euros) by 2025 and increase its presence in South East Asia.

InDaily reported the proposed sale of the 106-year-old company to Hempel Group in February, including its Kilburn manufacturing and distribution site.

Hempel purchased the Wattyl business from US paint giant Sherwin-Williams.

Founded in 1915, Wattyl is headquartered in Sydney and has manufacturing sites in Kilburn and the Melbourne suburb of Footscray.

It also has five distribution centres – four in Australia and one in New Zealand – nearly 100 company-owned stores, 750 employees and annual revenue of about $230 million.

About 50 staff work at the Kilburn site in Adelaide’s inner-north, which includes the factory, distribution centre and retail shop. Hempel says it has no immediate plans to close the Churchill Rd manufacturing site or reduce employment numbers there.

The Wattyl business became part of Sherwin-Williams through the 2017 acquisition of The Valspar Corporation.

Valspar bought the previously ASX-listed Wattyl in 2010.

Cleveland-based Sherwin-Williams is the world’s largest paint and coatings company and had been courting potential Wattyl buyers since mid-2020.

Codan buys another US company

Mawson Lakes company Codan has continued its growth strategy with the 100 per cent acquisition of American communications company Zetron for $59 million.

The sale is expected to be finalised on April 30 and follows Codan’s purchase of US-based Domo Tactical Communications from a private equity firm for more than $110 million in February.

The SA technology company with business pillars in communications, mining automation and metal detector manufacture has been on a steep trajectory in the past 12 months, reporting a record profit of $64 million in August for the 2020 financial year.

The result included record sales in its communications and metal detection divisions totalling $348 million and established Codan as one of the state’s fastest-growing companies according the InDaily‘s South Australian Business Index, culminating in its inclusion on the ASX200 in March.

The Zetron acquisition comprises an upfront cash payment of US$45 million (AU$59 million) funded through a combination of existing cash and a recently approved $100 million banking facility.

In a statement to the ASX this month, Codan said Zetron, which has more than 200 staff in the United States, United Kingdom and Australia, was expected to contribute about $67 million in sales under Codan’s ownership in FY22.

Zetron offers a suite of integrated emergency response technologies that are complementary to Codan’s existing products. These include voice dispatch, emergency call taking including Next Generation 911 (NG911), mapping, computer-aided dispatch and fire station alerting.

It will add to Codan’s existing North American presence, growing our current employee base from 140 to 320 as a result of this acquisition.

Codan chief executive Donald McGurk said the acquisition of Zetron was in line with Codan’s strategy to “transform our communications businesses from products to solutions”.

“This acquisition allows us to capitalise on Zetron’s extensive distribution network, brand strength and customer loyalty,” he said.

Tongan workers arrive to fill fruit picking shortages

The first of about 1200 seasonal workers from the Pacific Islands have arrived in South Australia to cover critical worker shortages and help support thousands of local jobs in the state’s agriculture and horticulture industries.

Just over 200 workers arrived on Friday from Tonga and were taken directly to the specially configured Paringa Resort in the Riverland to undertake two weeks quarantine before beginning work.

The program is expected to cost up to $7 million which is being jointly funded by the state government and the agriculture sector with industry contributing $2,500 per worker.

The next batch of 200 workers will arrive in two weeks’ time, after the Riverland quarantine facility has undergone a deep clean.

If any individual tests positive for COVID-19 they will be transferred to the dedicated quarantine facility in Adelaide and managed according to the appropriate guidelines set out by SA Health.

More than 3000 Pacific Island workers have come into Australia since the outbreak of COVID-19, with just one worker from Papua New Guinea testing positive. South Australia will not be accepting any workers from Papua New Guinea under this program.

Minister for Primary Industries and Regional Development David Basham said the program offered a safe solution to fill seasonal worker shortages ahead of the citrus picking season.

“Our plan will be able to cater for up to 1,200 seasonal workers across three months and will help support thousands of local jobs across South Australia’s agricultural industries,” he said.

“If fruit doesn’t get picked it would have devastating impacts across the entire supply chain which is why these workers are needed now.

“The State Government has made a significant push to encourage unemployed locals to take up fruit picking this year, but unfortunately not enough people have answered the call.

“Pacific Island nations have seen very low case numbers of COVID-19 but it is crucial we keep South Australians safe and strong which is why we have been working closely with SA Health and SA Police to ensure the Paringa facility meets strict safety standards.”

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