Christo Wiese’s Invicta Holdings has established an engineering start-up in the US as part of a drive to generate 50% of the company’s earnings outside SA within the next year.
The group has again pinned its hopes on geographical diversification after a tough financial year, in which SA’s unstable power supply and regulatory hurdles weighed on its results.
“In SA, structural challenges, such as unreliable energy supply, infrastructure deficits and regulatory inefficiencies remained pressing,” Wiese said in the group’s latest annual report.
According to Wiese, the proposed VAT hike controversy, which resulted in a fallout between members of SA’s coalition government and saw the national budget being delayed twice, further weighed on investor sentiment, making offshore investments even more attractive.
“The government of national unity (GNU) was tested through the national budget process, which created market and investor uncertainty and currency volatility,” said Wiese.
The start-up, called KSP, was established through Invicta’s Kian Ann joint venture, and is intended to grow the company’s presence in the US by expanding its distribution of undercarriage machinery alongside the existing KTSU America business.
The past financial year also saw Invicta broadening its international footprint through the acquisition of the UK’s Nationwide Bearing Company, which provides bearings and oil-seals to the agricultural and earth-moving machinery aftermarkets.
“Geographic diversification and the pursuit of sustainable earnings remain core pillars of our long-term strategy. Our business is inherently defensive in nature as the distribution and supply of parts, components and consumables is necessary for economic activity,” said Wiese.
The company aims to generate 50% of its net income from outside SA in the next financial year. It operates in 17 countries, with manufacturing facilities in China and distribution platforms in Europe, North Ameria, Southeast Asia and Southern Africa.
Against this backdrop, Invicta CEO Steven Joffe said the company had earmarked several inorganic growth opportunities as it aims to expand into new markets and grow its presence outside SA.
The government of national unity was tested through the national budget process, which created market and investor uncertainty and currency volatility.
— Christo Wiese
However, the company would wait for more stability in the global economy and financial markets, with trade wars, geopolitical uncertainty and war in Russia and the Middle East creating a muted deal-making environment.
“With the implementation of tariff wars globally, future economic outlooks remain tough to gauge as reciprocal tariffs fluctuate.
“The latest developments in the Israel—Iran war will significantly impact global logistics. The conflict has raised fears of security concerns in the Strait of Hormuz. Any disruption here could sharply increase freight costs, delay shipping times and cause fuel prices to surge,” said Joffe.
“We are evaluating several opportunities on the acquisitions front, and should these global headwinds subside, and we can identify suitable targets that align with our strategy, we will certainly continue to acquire businesses,” he said.
Joffe said the formation of the GNU had led to an improvement in market confidence, with a noticeable uptick in activity driving a stronger performance in the second half of the year to end-March.
In the long term, however, political and labour instability and the deindustrialisation of SA were listed as major strategic risks for the holding firm.
“Major steelmaking operations shut down in 2025, bringing the risk that government interventions to protect local industries could lead to greater production inefficiencies hampering SA’s ability to compete,” said the company.
Discussions on SA’s industrial policy, particularly around steel trade, have been heightened since earlier this year, when steel major ArcelorMittal announced the closure of its longs business, putting 3,500 jobs on the line.
In April, the government embarked on its most extensive review of steel tariffs in more than 20 years, as officials explored a more protectionist policy framework to shelter SA’s steel industry from cheap imports flooding the market.
Another long-term risk was political instability, reflecting fears about the stability of SA’s coalition government.
“The GNU is managed on a collaborative basis, which is reflected in the postponement of the budget presentation”, resulting in an ongoing threat of “sustained labour unrest and/or civil unrest in the context of high unemployment and high wage expectations,” said the group.
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