KUMBA RESOURCES LIMITED - KUMBA ON COURSE TO ACHIEVE MINIMUM R800 MILLION
IMPROVEMENT IN NET OPERATING PROFIT
KUMBA RESOURCES LIMITED
Incorporated in the Republic of South Africa
(Registration Number: 2000/011076/06)
Share Code: KMB
ISIN Number: ZAE000034310
(`Kumba`)
7 October 2004
KUMBA ON COURSE TO ACHIEVE MINIMUM R800 MILLION IMPROVEMENT IN NET OPERATING
PROFIT
Diversified metals and mining company Kumba Resources Limited (Kumba) today
announced that a business improvement project running throughout the group is on
course to achieve a sustainable minimum R800 million improvement in net
operating profit by December 2005, the full impact of which is expected to be
realised in the group`s 2006 financial year.
The project was launched in February 2004 to counter certain threats to Kumba`s
businesses, including the strong Rand and declining and volatile commodity
prices that have impacted negatively on the group`s performance. It will reduce
costs, increase product throughput and revenue, and improve business processes.
The minimum R800 million target was set using a forecasted exchange rate of
R7/$. The project has identified value creating opportunities that will
contribute to the long-term survival of Kumba`s businesses.
`A detailed process has been followed to assess our position and the potential
for improvement in order to add value to all our stakeholders. We have now
reached the stage where we can accurately map the way forward to meet the
challenges posed by the external factors that impact on our performance,` said
Dr Con Fauconnier, Kumba`s chief executive.
`From February to date we analysed different alternatives to achieve the
improvements. We have now arrived at the stage where we unfortunately have to
contemplate potential job losses of approximately 400 employees. No final
decisions have been made on initiatives that may impact on employees and today
we notified our employees and recognised trade unions that we will engage with
them in a consultation process starting on 21 October 2004,` said Dr Fauconnier.
`As a responsible employer, we have a rigorous process to minimise potential job
losses. This includes limiting both external appointments and the appointment of
contractors, a suspension of the employment of temporary staff where possible,
voluntary retrenchment and early retirement packages, and the redeployment of
potentially affected employees. We value our employees and are managing the
situation with due care and consideration for the individuals who may be
affected,` added Dr Fauconnier.
Date: 07/10/2004 04:10:30 PM
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