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Bolton Footwear, Beier Safety Footwear take over KAP’s footwear and leather divisions

23rd Jun 2014 , S&V Footwear and Leather Goods

The long-anticipated takeover of KAP Manufacturing’s footwear and leather divisions by Bolton Footwear is to go ahead, subject to approval by the Competition Commission.

The unexpected news is that the deal also involves Beier Safety Footwear and India’s Rahman Group – negotiations which appear to have escaped notice until a joint announcement by all parties this week.

If accepted, the total package will mean the proposed Safety Footwear Group will own the country’s 3 major leather safety footwear manufacturers – Bagshaw, Beier and United Fram – and 1 of the 3 existing safety gumboot manufactures, Wayne Plastics. In terms of the agreement, Beier and Bolton are to jointly own the Safety Footwear Group.

On the fashion footwear side, Bolton will acquire Jordan Shoes. Along with Barker Footwear and Watson Shoes, it will own the Western Cape’s major men’s leather footwear manufacturers. Jordan also brings significant chain business and a fashion import division.

The tannery, Mossop Western Leathers, is to be jointly owned by Bolton Footwear, the Safety Footwear Group and the SKN Corporation, a member of the Rahman Group of India, which is active in safety footwear and tanning. Rahman would be the single biggest shareholder.

Bolton Footwear group MD Alan Fleetwood said the 2 new companies would “probably be close to” the pairage and value of Conshu, the former JSE-listed company which in the 1990s dominated local footwear manufacturing.

He said a JSE listing for either or both of the new companies was not an immediate consideration, but “would be a nice idea some time in the future”. He said the various divisions would continue to compete in the local market.

“They’ll co-operate where there are opportunities to grow through co-operation – for example, safety footwear exports.

“We don’t have any preconceived ideas about synergies between the various companies. We didn’t immediately implement synergies when we bought Barker, but since the takeover, many opportunities have presented themselves, and we expect the same now.”

He said there would be 1 person heading each group, who in turn would report to 1 person heading the overall structure. “Obviously we’ve given a lot of thought to who those people will be, but it would be premature to make an announcement before we have approval for the deal.”

He said the mergers were not expected to lead to job losses. “There would be no pruning of any kind because of this deal. KAP has already significantly streamlined United Fram, which is working entirely with imported uppers. On the management side, the industry is short of skills – we can’t afford to lose any more. There’s not a business in these 2 groups that’s an embarrassment, and that needs wholesale changes.”

He said the parties had “informal discussions with the DTI early on in the negotiations”.

“The DTI indicated that it did not have a problem with the mergers. However, it won’t get involved with Competition Commission process.”

Of the decision to involve Rahman in Mossop Western, he said it was possible the DTI’s mooted policy on the export of wet blue hides would give the tannery an assured source of affordable hides, “but even if that isn’t the case, Rahman is confident it will be able to find an international source. That’s Mossop Western’s biggest need.”

Although the Safety Footwear Group would be a shareholder in Mossop Western, he didn’t expect bovine leather to replace Indian buffalo as the safety footwear leather of choice “except perhaps for government tenders, which local components are also specified”.

The official announcement follows:

KAP Manufacturing (Pty) Ltd, Beier Safety Footwear (Pty) Ltd and Bolton Footwear (Pty) Ltd. are pleased to announce the formation of two significant footwear groups after the successful conclusion of multi-party negotiations. The one group will operate in the safety footwear industry, with the other operating in fashion and comfort footwear.

The implementation of the agreements is subject to normal regulatory processes and approval by the South African Competition Authorities.

The Safety Footwear group will be formed by the joining of Bagshaw Footwear, Beier Safety Footwear, United Fram Footwear and Wayne Plastics. This will bring the brands Bova, Bronx, Fuel, Frams, Lemaitre, Ndlovu, Inyati, Sisi, Shu! and Wayne together. This group will be focused on the local manufacture of safety footwear for the South African and export market.

In the Fashion and Comfort Footwear domain, Jordan Shoes will join Watson Shoes and Barker Footwear, all of which are well established South African manufacturers and wholesalers. This group’s brands will include Anton Fabi, Barker, Bronx, Crockett & Jones, Dr. Hart, Franco Gemelli, GH Bass & Co, Grasshoppers, Jordan, Olympic, Paulo Falcone, Renegade, Step-on-Airs and Watson. The shareholders in these groups are committed to the South African Footwear Manufacturing Industry.

The consolidation of resources will put these businesses in a stronger position to maximise the productivity improvement benefits offered by the Department of Trade and Industry under the Clothing & Textile Competitiveness Improvement Programme, thereby contributing to achieving the objectives of the Industrial Policy Action Plan through significantly increased export activity and further job creation expansion. The South African Footwear Industry has been under threat for many years, primarily as a result of imports, and the successful implementation of these agreements will contribute significantly to the survival, sustainability and growth of local footwear manufacturing and the industry as a whole.

The agreements involve the merging of Beier Safety Footwear with Bolton Footwear’s Bagshaw Footwear Division, to form a new Safety Footwear company. Furthermore, KAP Manufacturing will dispose of its Footwear Division comprising four businesses. To this end, the new Safety Footwear company will acquire United Fram Footwear and Wayne Plastics. Bolton Footwear will acquire Jordan Shoes, while Mossop-Western Leathers will be acquired jointly by the new Safety Footwear company, Bolton Footwear and SKN Corporation. SKN Corporation is a member of the Rahman Group of India, a significant international player in the safety footwear and tanning industries. The new groups reflect the faith of the respective Beier and Bolton families in South Africa as the place where their businesses, some established as far back as 1868, will continue to thrive. Management structures, the new Safety Footwear company’s name and other relevant information will follow approval from the Competition Commission.




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