In a significant move poised to reshape South Africa’s electrical and energy sector, ACTOM has announced its acquisition of SGB-Smit Power Matla (SSPM), a leading manufacturer of transformers and related products. This acquisition, structured as an asset transaction along with the transfer of staff, aligns with ACTOM’s long-term growth strategy to enhance the company’s transformer manufacturing capabilities, including class 3 units up to 500MVA and 500kv. At the same time, it increases production capacity and strengthens its focus on the energy sector to support regional industrial growth across Africa.
SGB-Smit Power Matla History
SGB-Smit Power Matla was a leading transformer manufacturing company in South Africa, recognised for its specialised products and solutions in the electrical engineering sector.
Over the years, SSPM has gained a reputation for high-quality transformer design and manufacturing, serving industries such as mining, water supply, and energy generation, transmission, and distribution. The company emphasises innovation and technological progress, continuously enhancing its production processes and products to meet the changing demands of the electrical market.
SSPM has concentrated on sustainability and environmental responsibility, aligning itself with global trends in energy efficiency and eco-friendly practices. The company was also dedicated to local content and development, contributing to the South African economy by creating jobs and supporting local suppliers.
SSPM entered business rescue in September 2023 due to significant financial challenges, including those caused by a fire that damaged its Pretoria factory capacity. Other contributing factors likely included the impacts of the COVID-19 pandemic, global supply chain disruptions, and issues related to finance, quality, and upskilling that the company was addressing. The business rescue process ultimately led to the acquisition of its assets by ACTOM.
A Bold Strategic Move
ACTOM, a well-established player in South Africa’s engineering sector, has consistently aimed to expand its portfolio to better serve its clients and respond to market demands. The acquisition of SSPM, recognised for its technological expertise, facilities, and capacity in transformer manufacturing, marks a strategic step forward for ACTOM. This merger not only increases ACTOM’s production capacity but also integrates SSPM’s world-class facilities and skilled workforce into its operations. “We are excited about this acquisition, which positions us to enhance our offering in the market,” said ACTOM Group CEO Mervyn Naidoo.
Strengthening Local Economies
The acquisition takes place at a strategic point, aligned with South Africa’s Transmission Development Plan (TDP) and Independent Transmission Projects (ITP), which anticipate significant network expansion in the coming decade. This development will demand new high-voltage substations and transmission corridors, increasing the need for large power transformers. The acquisition will also create employment opportunities, improve local skills, and establish domestic manufacturing capabilities to decrease reliance on imports and stimulate economic growth. “By strengthening our workforce, we are not only enhancing our business capabilities but also committing to our countries’ socio-economic development,” said Naidoo, and added, “The key issue from a national perspective is that South Africa’s economy is stagnant. By localising, we employ local individuals, thereby increasing the economically active population in the country. These individuals pay taxes, and our company also contributes to tax revenues, thereby reducing the social burden on the state. From a socio-economic standpoint, this acquisition is strategically important for the nation. We need to leverage our infrastructure spending as a stimulus to reindustrialise our economy, as they are crucial for addressing the current social and economic crises we face.”
The renewable energy sector also presents a vital business opportunity for ACTOM. The self-build strategies of Concentrated Solar Power (CSP), wind, and Photovoltaic (PV) solar project developers require them to build power generation facilities and transmission substations that connect to the electrical grid. ACTOM is well-positioned to supply the heavy-duty transformers, High Voltage Equipment, and infrastructure needed to facilitate these connections.
SSPM’s Pretoria and Cape Town manufacturing facilities will underpin this growth initiative. The Pretoria plant, which has been largely inactive since October 2024 due to funding issues and fire damage, will undergo restoration and upgrades. Once completed, the Pretoria factory will operate as the main centre for class 2 and 3 transformer production, making ACTOM the largest transformer manufacturer across Africa.
Geographic expansion is a crucial strategic aim for ACTOM. Although large transformer plants involve significant operational costs, expanding across Africa allows for better cost management, enhances manufacturing efficiency, and fosters broader industrial growth and electricity infrastructure development across the continent.
Naidoo emphasises that ACTOM aims to establish itself as an authentic African Original Equipment Manufacturer (OEM) by developing local manufacturing centres that will provide support services across the continent. “Our vision is ‘in Africa, for Africa, by Africa’, thereby fostering sustainable growth, skills development, and industry resilience on our continent.”
“SGB-Smit Power Matla is pleased that, together with ACTOM, a strong and experienced South African partner has been found who can provide both the assets and the employees of SGB-Smit Power Matla with a sustainable and positive future. We are confident that ACTOM, as a leading local manufacturer, will continue to build on the company’s strengths and further strengthen its position in the South African market.
SSPM will actively support ACTOM throughout the transition period to ensure a smooth and seamless handover,” says Holger Ketterer, CEO of the SGB-SMIT Group.
Moving forward, ACTOM intends to surpass pre-fire production levels in Pretoria, establish more manufacturing facilities, and further enhance its role as a regional centre.
ACTOM Power Transformers
ACTOM Power Transformers (APT) plays a significant role in the SGB-Smit Power Matla acquisition by complementing existing capabilities and enhancing the overall market offering. With the SSPM acquisition, APT will now increase its capacity fourfold.
The APT Wadeville factory, which Pedro Adams will now lead as the Divisional CEO, will continue producing the Class 1 Transformer, up to 160MBA 132KV transformers, while the Pretoria-West facility, renamed to ACTOM Power Transformers Pretoria and headed by Steve Jordaan as Divisional CEO, will manufacture the Class 2 and 3 transformers to serve both the South African and international markets.
Industry Reactions
Industry analysts and stakeholders have broadly welcomed the acquisition, emphasising the potential for increased competition and technological progress in the sector. “This merger is a positive indication of ACTOM’s commitment to growth and innovation in South Africa’s energy market,” said Chris Yelland, Energy Expert, a prominent figure in the industry. “It shows a proactive approach to addressing current challenges while preparing for future demands.”
Innovative Solutions for a Sustainable Future
SSPM’s expertise in manufacturing high-quality transformers perfectly aligns with ACTOM’s vision of delivering innovative and sustainable energy solutions. This acquisition will allow ACTOM to broaden its product portfolio to meet the rising demand for greener, more efficient energy solutions in South Africa, especially as the country shifts towards renewable energy sources.
Through this acquisition, ACTOM aims to focus on research and development to create advanced, environmentally friendly technologies. The merger supports global trends where companies are prioritising sustainability as a key part of their business models.
Conclusion
As ACTOM embarks on this new chapter with the acquisition of SGB-Smit Power Matla, it is positioned to leverage the strengths of both companies to advance South Africa’s energy and infrastructure sectors.
The move not only promises enhanced service offerings but also demonstrates a commitment to supporting local economies and promoting a sustainable future.
As the market evolves, ACTOM’s strategic acquisitions position it as a resilient leader prepared to face the challenges and opportunities ahead.