by Mr G Norton, 16 April 1948
During the autumn of 1907, Mr Arthur Chamberlain, (brother of the famous Joe), Chairman of the above company, visited South Africa with a view to obtaining contracts with the South African mining houses for the supply of explosives from the company’s existing High Explosives Factories at Kynochtown, England, and Arklow, Ireland.
He learned, however, that the two South African factories already producing explosives could manufacture and sell at a much lower price than he could possibly land explosives in South Africa. Contracts were promised Kynoch Limited by certain South African mining interests, provided manufacture took place in South Africa and prices were competitive.
Mr Chamberlain decided that if manufacture took place near a port in South Africa, he would also be in a better position to supply India, Australia, etc. at a cheaper selling price than from his factories in the British Isles. He ruled out Cape Town as a site for manufacture, owing to the long railway journey to the mines. He also ruled out Port Elizabeth and East London, as neither place had good harbour facilities for landing the necessary raw materials, etc.
An attractive offer was made to him by the Natal Government of a site situate 14 miles from Durban, viz Umbogintwini. The Natal Government offered Mr Chamberlain 1600 acres of land free of cost, provided the firm:
- cleared the bush at their own expense
- erected a factory and plant costing jointly not less than £100 000, and
- undertook to employ local white labour, apart from a small number of experts who would have to be transferred from England or Ireland.
In addition to the free offer of land, the Natal Government also agreed to carry building material, machinery and bulk raw materials imported into Natal, from Maydon Wharf, Durban to the factory site at a flat rate of one shilling per ton.
The Board of Directors in Birmingham cabled agreement to a maximum expenditure of £200 000 for a factory and plant capable of producing 90 tons of explosives per week and Mr Chamberlain thereupon:
(a) accepted the offer and conditions of the Natal Government relating to the free gift of land.
(b) arranged five years’ contracts with various mining houses (particularly the Albu Group) for a continued supply of explosives, commencing June 1909, at prices somewhat less than those of the other explosives firms.
It was decided by the Board not to form a separate company but to treat the South African business as a branch of the English firm.
To finance the expenditure Kynoch Limited raised £250 000 by way of 5% First Mortgate Debenture Stock, which was secured on the whole of the assets of Kynoch Limited, Birmingham.
The bush was cleared and building commenced early in 1908, while the majority of the plant was erected by the end of that year. In addition, dwelling houses, together with a Staff House were erected for:
- the technical personnel due to arrive from England,
- the small number of highly experienced workmen transferred from the firm’s Irish factory.
Mr Cocking, one of the directors of the company, was made responsible for the efficient working of the factory and visited the factory yearly.
Manufacture started early in 1909 and by June of that year production was sufficient to meet deliveries promised to the mines by that date. Production gradually increased during the year and the factory was working three shifts and meeting full demands by the end of December 1909.
Unfortunately, Mr Chamberlain, when fixing the selling prices of explosives to be supplied to the mines, had based them on the price of glycerine fluctuating between £45 per ton (the price when contracts were made) and a peak price of £50 per ton.
Immediately on his return to England early in 1908 Mr Chamberlain attempted to obtain long-term contracts for the supply of glycerine at £47,10 per ton, but was unable to do so, in fact:
(a) the large soap manufacturing interests in England, who were antagonistic to Kynochs Limited because they also manufactured soap but sold at lower prices than the Soap Cartel, and
(b) Nobel Explosives Company, Glasgow, who did not welcome Kynoch Limited’s competition in South Africa, owing to their financial interests in British South African Explosives Co. Limited, successfully combined together to “corner” glycerine, raising the price to Kynoch Limited to £72. This was a serious blow to the Kynoch South African venture, as only very small supplies of glycerine could be obtained from the continent of Europe at approximately £55 per ton.
To solve the difficult position, the firm, on the advice of an expert, decided to erect a factory on the Indian Ocean side of the Bluff, near the Durban breakwater, for the purpose of extracting glycerine from whale oil. The expert, a man by the name of Bearpark, was engaged to manage the factory and quantities of glycerine were produced by this means. The residents of Durban, however, soon petitioned the Council for the removal of the factory owing to the objectionable odour wafted inland.
Soon after supplies of this particular glycerine had been used in the manufacture of explosives two serious explosions occurred at the Umbogintwini factory within a short time of one another, which the Inspector of Mines considered were traceable to the quality of the glycerine manufactured at the Bluff factory. This verdict caused the glycerine plant to be immediately dismantled and sold, the buildings being sold some years later. This particular adventure resulted in an additional loss of £65 000 and the interest on the first 5% Mortgage Debenture Stock had to be found by the Home factories instead of from the profits of the South African venture.
The glycerine situation eased considerably during 1911 and the price became normal in 1912, and remained so up to 1914. Contracts with the mining houses were due to renewal early in 1914 and new contracts were signed for a period of three years at prices which enabled the company to make a reasonable profit.
Soon after the outbreak of war, supplies of glycerine became very scarce and the mining houses became anxious in regard to the possibility of explosives firms supplying the large quantity of explosives required. The manager of the Umbogintwini factory, Mr J P Udal, together with the chemical staff (Mr G Firth in particular) experimented with and produced a substitute explosive called “Sengite”:
S = Substitute
E = Explosive
N = No
G = Glycerine
which contained no glycerine but collodion cotton and sodium nitrate. This new explosive, while not nearly so effective as the usual explosives used, was reasonably successful and was taken in quite large quantities by the various mining houses.
When the contracts became due for renewal in 1917 the Chamber of Mines decided that selling prices should be fixed on audited cost of production (excluding packing and maintenance charges), plus a fixed rate of profit, a fixed price per case for pacing and 1/6d per case to cover maintenance of buildings and plant.
During the first World War, 80 ton and 30 ton factories were erected to enable nitro cotton to be produced and shipped to England for HM Government. The Umbogintwini factory also developed, on a small scale, quite a number of new chemical productions which had previously been imported either from England or Australia. The factory returned £60 000 profit from these new ventures.
At that time also the Minister of Railways approached us with a request that we produce red paint and stated that he was prepared to place contracts with the firm for the whole of the paint required for their rolling stock. The case for the paint was the residue from burned pyrites, from which it was necessary to extract the small sulphur content remaining. The Board in Birmingham, however, decided against the provision of the necessary capital for this venture and the deal fell through.
During the 1914-1918 war the firm also had in mind the expenditure of a large amount of capital in Africa for the production of nitrogen from the air by means of the “Arc” process. An option was obtained on a colliery at Enyati and on the services of a Frenchman, by name Rouillard, and preparations went forward for the development of this business. The new parent company formed in London in 1918 and styled Explosives Trades decided not to proceed with this venture. During the same period negotiations took place with Safco Limited, Durban, with a view to a price agreement fro the sale of fertilizers, one of the new chemical products which the Umbogintwini factory had developed at that time. These negotiations led to a proposal from Mr May of Safco Limited to merge the interests of the two fertilizer companies. Later Mr May proposed the outright sale of his fertilizer business to Kynoch Limited. Many meetings took place and a provisional price was decided upon, subject to the agreement of the Board of Kynoch Limited in Birmingham. At this stage, however, negotiations were postponed pending the arrival of Mr Chamberlain in Africa. When Mr Chamberlain arrived in Durban Mr Udal had unfortunately left for the United States and Mr May of Safco Limited at his first meeting with Mr Chamberlain desired to start negotiations on a different basis, which would give him a price 50% higher than previously demanded, and negotiations came to an end. Mr May later approached Explosives Trades Limited, requiring a larger price than any previously suggested, but on investigation it was found that the price asked was not justified and negotiations finally ended.
The company was offered arsenic-free, gold-bearing pyrites from a property near Sabie. After the necessary investigation the company signed a contract to take all the pyrites mined, so long as they complied with specifications laid down at £1 per ton, (2) to expend capital to extract the gold from the pyrites, (3) to share the proceeds fro the sale of the gold on a 30/70% basis (Kynoch share 30%). (Pyrites were difficult to obtain at that time due to war conditions and shipments from abroad cost from £1.17.0 to £2.0.0 per ton f.o.b.)
A large tonnage was obtained from this property before the mine petered out sometime in 1922 but the firm made a profit on the gold extraction after writing off the cost of the special plant required.
The plant was subsequently used for the extraction of nicotine from tobacco.
The merging, early in 1918, of the Explosives, Cartridge, Fuse and Black Powder manufacturing firms in England, viz. Nobel Explosives Co Ltd., Glasgow; Kynoch Limited, Birmingham; Bickford & Co., Cornwall; Eley Bros., London; etc., etc., into one company styled “Explosives Trades Limited”, largely affected the Umbogintwini and Modderfontein factories. Early in 1919 Mr Arthur Chamberlain (son of the Mr Chamberlain who originally negotiated the factory site) visited South Africa with a gentleman named General Milman, with the intention of purchasing the Cape Explosives Works and the merging of the three explosives works into one South African company, the share capital to be held entirely by Explosives Trades Limited. These negotiations came to nought and, in turn, the De Beers interests sought to buy from Explosives Trades Limited the Modderfontein and Umbogintwini assets. In June 1919 it appeared that this latter deal had been crowned with success, Explosives Trades Limited having cabled agreement to the terms of the main heads of agreement. A few days after Mr Chamberlain had sailed for England, however, the deal was declared “off”, due to some misunderstanding between Sir George Albu and General Milman, who had been left by Mr Chamberlain in Africa to take charge of the two factories until such time as De Beers finally took over.
Immediately negotiations with De Beers ceased, all efforts were concentrated on the complete fusion of the Kynoch South African and the British South African Explosives interests. A decision was soon made to:
- concentrate manufacture of explosives for the South African mining houses at Modderfontein;
- to manufacture explosives at Umbogintwini for export;
- to develop fertilizers and extend the manufacture of chemical by-products at Umbogintwini.
From 1920 to 1924 other attempts to bring about a fusion between the De Beers interests and Explosives Trades interests, known as Nobel Industries, Limited, were made but failed. Meanwhile, the concentration of explosives at Modderfontein became an accomplished fact, while the Umbogintwini factory concentrated on the manufacture of fertilizers and chemical by-products.