Johannesburg — COLOUR pigments and dye manufacturer Rolfes Colour Pigments International has concluded a strategic alliance with UK-based Union Colours to manufacture locally high-value organic pigments used for printing on quality food packaging.

These would be sold at R220/kg compared with organic pigments that Rolfes was producing, which retail at R80/kg.

The deal gives Rolfes immediate access to the highly specialised skills required to produce the pigments while allowing it to earn additional revenue from exports to African and overseas markets.

The company would produce up to 200 tons a year at its plant, which has the capacity to double this output with some additional expenditure.

Rolfes is wholly owned by listed diversified manufacturing and technology group Rolfes Technology Holdings.

The group's CEO, Erhard van der Merwe, said this week the company would use its excess manufacturing capacity and other facilities such as laboratories and skilled staff to manufacture the pigments.

Union Colours would second experts to transfer technology to local staff, and also promote and sell the products under its brand in overseas markets. Rolfes would focus on the African markets.

So far it had earned more than R37m from exports of its own pigments to markets in Africa, Asia and Europe, Van der Merwe said.

He did not expect immediate capital expenditure to support the new venture because the company had extra production capacity, but "once certain volumes are exceeded we will spend up to R500000 on ancillary equipment".

The project was expected to contribute to the group's annual revenue, which last year exceeded R224m.