The mystery surrounding South Africa's missing condom factory has been solved.

condomi Africa, which was to have built the condom factory in the Eastern Cape as part of he offset programme in the arms deal, has had an unnamed party apply for its formal liquidation.

The liquidation application was said to be part of a restructuring plan by its parent company, condomi AG in Cologne, Germany. It is understood that condomi AG has decided, after a detailed analysis of its activities globally, not to pursue its strategy in South Africa as originally envisaged.

Rather, it had opted to manufacture in and export from Germany and to have a local marketing strategy.

German multinational Ferrostaal is to kick of talks this week with a new partner to operate the condom factory, following the application for the liquidation of condomi Africa, which until recently was Ferrostaal's German associate in its South African joint venture.

Ferrostaal is the commercial partner within, and acting on behalf of, the German Submarine Consortium, which is responsible for the implementation of the German Submarine Consortium's South African offset obligations, connected to the SA Navy's acquisition of three type U-209 submarines.

The boats are already under construction and the German Submarine Consortium has until final delivery to fulfil its industrial participation (offset) obligations.

Ferrostaal said potential new partners for the condom factory joint venture had been identified but "for reasons of commercial confidentiality" Ferrostaal would only make a further statement on the project when talks had been finalised.

The new South African-based condom manufacturing joint venture is to target domestic and export markets, including large-scale tenders by African governments within the parameter of their anti-HIV / Aids campaigns. The new company could use facilities already under construction for condomi Africa.

Based in Essen in Germany, Ferrostaal is a diversified trading and services house as well as a project developer and manager. Its activities include a big steel trading arm and a capital investment arm.

With acknowledgements to Vera von Lieres, Sapa and the Business Report.