At this time of crisis in the Middle East, the supply chain strength of South Africa’s Omnia is of major relevance from mining and agriculture perspectives.

The Johannesburg Stock Exchange-listed Omnia has a strong grasp of ammonia-based emulsion and explosives inputs as well as key detonator capability, which adds value to mines by providing appropriate fragmentation and ensures that mines have the inputs to blast when they need them, which is so relevant amid what is being faced today – Middle East supply chain disruption.

On the agriculture front, Omnia is the largest producer of ammonia-based fertilisers in the Southern African Development Community (SADC).

“Our teams are very busy moving things around due to the situation in the Middle East, to make sure that our farmers and our mines have strong supply chains to allow them to plant and to blast,” Omnia CEO Seelan Gobalsamy highlighted in an interview with Engineering News & Mining Weekly in Johannesburg on Wednesday, March 25.

From an explosives and mining perspective, Omnia expresses the strong belief that it has one of the most robust and reliable supply chains of ammonia-based emulsion and explosives inputs and that its advanced detonator capability and technology add significant value through appropriate fragmentation, and enable mines to blast and have the inputs to blast when needed – “and that’s so relevant in what the world is facing today, with the crisis in the Middle East”.

Omnia, which is strongly rooted in South Africa, has 200 of its own ammonia rail tankers that transport as well as an ammonia storage capability.

It is a 70-year-old business that began in agriculture, and over the years gradually diversified into explosives, and chemicals, and today finds itself making a profound and meaningful difference in both the mining and agriculture markets.

Over the last five years, Omnia’s mining explosives business has grown significantly – by 40% plus – to the point where last year it overtook the agriculture business in overall contribution and performance.

Omnia is a strong and reliable provider of food security and a deeply embedded provider of mining explosives across the African continent and globally, with established operations in 23 countries around the world.

“Our North Star is to be a very strong explosives provider across the world, not just in South Africa, and that’s why we’re investing in detonator plants, emulsion plants across the world, with partners. Our strong underpin is a business with values and a business with strategies and products that are doing what is right for the environment, not just for our generation, so that when our kids, when our grandkids, when their kids and grandkids walk the earth, it can be a better place than what it was when we walked the earth. Food can be healthier, there can be fewer chemicals being used, less water being used, and overall, the environment and the earth being better,” Gobalsamy projected.

The company has a market capitalisation of just under R15-billion, zero debt and has been able to expand and recruit.

“We invest in a lot of young people. We hire 1% of our workforce a year as young graduates. We give them a job for a year, and then we expect them to find something in Omnia or elsewhere.

“A few years ago, we also decided to give everyone in our company shares. Everybody, no matter how senior or junior, got 300 shares, and we redid that programme a year later.

“Our belief is, if you do good, if you run a good business, the profit should follow. We’ve got a very noble purpose in enhancing life, and we believe everyone must share in that gain,” Gobalsamy opined.

“Omnia was started by two very entrepreneurial individuals. They started, initially trading lime, and eventually moved into fertiliser.

“If I walk through the generations, in 1980 the company listed on the Johannesburg Stock Exchange. Since then, the company has continued to build large plants and if I talk through some of those milestones, we have the largest nitric acid plants in the SADC, the most modern plants.

“We’ve got fertiliser granulation plants, the only ones in SADC, and we’ve got an incredible nitro phosphate plant, which takes phosphate rock and produces phos acid. It also produces calcium nitrate, which we use in the explosives industry.

“We’ve got about 70 rugby fields of these incredible plants that have been built in Sasolburg, thanks to our predecessors who invested and did that. We continue to do that.

“If I take it a bit further, we then bought BME, which is the mining business, and then Protea Chemicals, and then businesses across the world and made investments in businesses across the world.

“We’ve got a joint venture in Canada, a joint venture in Indonesia. We’ve got a great agri business in Brazil, a partnership in India, from an agri perspective, and our humates business in Australia. If we step a little bit further, we continue to expand on the African continent and today we can proudly say that we are a strong provider of food security and a deep, embedded provider of mining explosives across the African continent and in certain countries around the world.

“As we saw disruption and change happening, Omnia continued to invest in rail tankers. We have our own rail tankers that move ammonia around – 200 of them. We are one of the few companies in the country that does that. We also have storage capability, and we have the strongest supply chain in this region. That has kept us out of a situation of having to declare force majeure, even during the initial Russia/Ukraine issues, the issues with the Suez Canal, and now our teams are very busy moving things around due to the Middle East, to make sure that our farmers and our mines have strong, strong supply chains to allow them to plant and to blast.

“There were also some difficult times in 2018/19, the company had expanded a little bit faster than it should have, potentially, and we needed to do a rights issue. The balance sheet was stressed. We’ve made some changes. We changed capital allocation, and since then, the market cap has grown from circa R2-billion to just under R15-billion. We’ve been able to pay R35-billion worth of dividends back to shareholders. At half-year, the company had no debt,” Gobalsamy outlined to Engineering News & Mining Weekly.