J&J CEO Jayendra Naidoo explained to Brainstorm the strategy behind the move.

When J&J Group bought 30 percent of JSE-listed Faritec Holdings in April 2003, Faritec had just come off a tough six-month trading period, incurring an interim headline loss of 1c a share and a R1.85 million operating loss. While the acquisition may have appeared at the time to be an act of faith on the part of J&J, it seems the investment is paying off for both companies, to the extent that J&J recently increased its stake by more than five percent and has increased a willingness to acquire even more.

Faritec is to report its latest full-year results later this month, and the company has indicated in a trading update that the results will show that it has continued the turnaround reflected in its figures for the six months to December 2004. That turnaround is partly the result of decreasing its reliance on product sales, with services becoming a greater contributor to the company`s fortunes.