AECI LIMITED
(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, Indonesia.
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
outlets.
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 core strategy.
Woodmead, Sandton
7 November 2012
Sponsor
RAND MERCHANT BANK (A division of
FirstRand Bank Limited)