| Mon 17 May 2004, 10:41 | | ILLOVO INTRODUCES LANDMARK BROAD-BASED EMPOWERMENT |
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ILLOVO SUGAR LIMITED - PRESS RELEASE: ILLOVO INTRODUCES LANDMARK BROAD-BASED
EMPOWERMENT IN SUGAR MILLING AND GROWING OPERATION
Illovo Sugar Limited
(Incorporated in the Republic of South Africa)
Company registration number 1906/000622/06
JSE Share Code: ILV
ISIN: ZAE000003547
("Illovo Sugar" or "the Group")
ILLOVO INTRODUCES LANDMARK BROAD-BASED EMPOWERMENT IN SUGAR MILLING AND GROWING
OPERATION
* Gledhow sugar mill and cane growing estates sold for R335 million in
cash to Grand Bridge Trading 40 (Pty Ltd ("Grand Bridge")
* First sale of a sugar mill in South Africa to a BEE grouping
* The major shareholders of Grand Bridge include the Sokhela Family
Trust and Gledhow employees, in addition to historically disadvantaged
community-based associations, businesses and individuals
* Large part of the Gledhow estates will be on-sold to medium and / or
small-scale farmers, enhancing the broad-based nature of the
transaction
* Current management and staff retained; Illovo to provide management
support for five years
* Financial effects on earnings not considered material - proceeds to
strengthen balance sheet in preparation for future growth
* Acquisition finance for Grand Bridge has been provided by the Land and
Agricultural Bank of South Africa
* Effective date of sale 1 June 2004; subject to the approval of the
Competition Authority
Don MacLeod, Illovo Managing Director, commented:
"This is a ground breaking transaction. We are delighted to be introducing
direct and broad-based black economic empowerment into the sugar milling
industry in South Africa. We will work closely with Grand Bridge in promoting
the long-term sustainability of the business."
"The proceeds from the sale will be used to strengthen the balance sheet in
preparation for future growth in new and existing areas within Africa."
Dr Patrick Sokhela, Grand Bridge Chairman, commented:
"We are proud to have reached agreement in this exciting transaction. It will
allow for the participation of a wide range of local communities in the future
business potential at Gledhow, as well as its employees and other regional
groupings. We look forward to partnering Illovo through the next five years to
ensure the highest standards of operational excellence are maintained."
"We have been negotiating with Illovo in respect of putting a BEE deal on the
table since 2000 and I commend Don MacLeod and his team for the patience and
support we have received from everyone at Illovo."
17 May 2004
Enquiries:
ILLOVO SUGAR
031 508 4300
Don MacLeod
John Russell
Chris Fitz-Gerald
GRAND BRIDGE
Patrick Sokhela
083 627-9068
COLLEGE HILL
011 447 3030
Nicholas Williams
083 607 0761
Angela Parr
083 578 3885
NOTES TO EDITORS
Illovo Sugar
Illovo Sugar is a leading, global, low-cost sugar producer and a significant
manufacturer of high-value downstream products. The group has extensive
agricultural and manufacturing operations in six African countries and also
operates a beet sugar manufacturing plant in the United States.
Excellent climatic and soil conditions found in the group"s African countries of
operation, accompanied by irrigation from secure water sources, are ideal for
the cultivation of high-yielding and excellent quality sugar cane. Annual cane
production of approximately 5.8 million tons is produced on agricultural estates
in South Africa, Malawi, Zambia, Swaziland, Tanzania and Mozambique. Group
sugar production amounts to approximately 2.3 million tons.
A recently completed independent survey of international sugar production costs
revealed that Malawi, Zambia, South Africa and Swaziland were ranked among the
world"s ten lowest-cost cane sugar producers. The production costs of the
group"s US beet sugar factory are in line with other world beet sugar producers.
Commitment to Black Economic Empowerment
Illovo has adopted an integrated approach to BEE in South Africa, encompassing
meaningful and sustainable participation of Black people at all levels of the
operations of the company. Significant resources are invested in various aspects
of human resource development and skills upliftment programmes. The company has
specific targets for achieving employment equity targets.
BEE initiatives to promote broad-based Black opportunity within the communities
in which it operates have been ongoing and include Illovo"s medium-scale farm
development programme that was launched in 1997 in order to giver further
impetus to established sugar industry programmes to promote the participation of
historically disadvantaged people and communities in the sugar cane business.
Farms sold to Black medium-scale farmers as a percentage of cane land owned by
the company amounted to 26.5% before this transaction. The agreement with Grand
Bridge brings this total to 53%. In addition, about 1670 employees, of whom 84%
are new home owners from designated groups, have been assisted to acquire
company-owned houses or to purchase houses in the open market.
Gledhow
(See SENS announcement)
Grand Bridge
The chairman of Grand Bridge is Dr Patrick Sokhela who has been involved in
South African sugar industry affairs for more than 20 years. Dr Sokhela"s
primary interest has been in the development of small-scale growers, mainly in
administration, organisational structures, training and support services. He
was the immediate past CEO of the Institute of Natural Resources and a previous
director of the SA Cane Growers" Association. Dr Sokhela remains a trustee of
the Small-Scale Growers Development Trust, an organisation he helped to
establish in the early 1990"s to assist in the development of small-scale
growers. He holds several key positions in a range of professional and
developmental organisations in KwaZulu-Natal and is currently chairman of the
KwaZulu-Natal Agricultural Development Trust. Mr Sokhela is a previous employee
of Illovo Sugar having held several agricultural positions before he joined the
SA Cane Growers" Association in 1992.
Date: 17/05/2004 10:01:04 AM Produced by the JSE SENS Department
