(Incorporated in the Republic of South Africa)
(Registration number 1924/002590/06)
Share code AFE ISIN No. ZAE000000220
("AECI" or "the Company")
NOTICE OF PROPERTY PRESENTATION AND M&A UPDATE
A presentation providing an update on the Company's strategy, business model
and valuation for its property portfolio is being given to institutional
shareholders today, Wednesday, 7 November 2012. The presentation will be
available on AECI's website www.aeci.co.za at or about 11:00 today.
The presentation also includes an update on the Company's M&A activity and
commentary pertaining to transactions not previously announced is as follows:
1. AECI has acquired a 42% shareholding in an equity partnership with PT Black
Bear Resources Indonesia ("BBRI") for a consideration of US$23 million. BBRI is
erecting a nitric acid plant and an ammonium nitrate solution plant in Bontang,
In line with its internationalisation strategy, AECI subsidiary AEL Mining
Services ("AEL") entered the Indonesian market in 2009. Significant sales
volumes were achieved and AEL rapidly became the second largest supplier of
explosives to that market. In-country access to a secure source of ammonium
nitrate will assist in sustaining AEL's growth trend in the region.
The BBRI partnership is the first phase of a potential future AECI investment
programme for the growing South East Asian mining services market.
2. AECI has acquired 80% of Afoodable Proprietary Limited ("Afoodable") and
this business will be merged into the Food Division of Lake International
Technologies ("Lake"). Afoodable's primary activity is the manufacture and
bottling of liquid marinades and sauces for leading retail and manufacturing
Lake represents international manufacturers and suppliers of specialty
ingredients for the food industry. The Afoodable acquisition provides Lake with
entry into the meat sauces industry and enhances the range of products and
services available to its customers in Southern Africa.
3. Resitec Industria Quimica Limitada ("Resitec") is based in Brazil and is a
manufacturer and supplier of emulsifiers for synthetic rubber production. AECI
and the MeadWestvaco Corporation ("MWV") of the USA have held a 50:50 joint
venture partnership interest in Resitec for the past four years. Agreement
between the two parties has been reached for MWV to acquire AECI's 50% interest
in the business.
Growth in Brazil remains an important component of AECI's strategy. The Company
has reviewed and refined the details of this strategy in terms of its preferred
target markets and business model. Whilst involvement in Resitec has been
invaluable for acquiring local knowledge and experience as a platform for
future expansion, AECI concluded that Resitec is not ideally aligned with its
7 November 2012
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
-0- Nov/07/2012 09:00 GMT
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