Tongaat-Hulett Group head office not affected

The Tongaat-Hulett Group’s head office was not affected by the fire, which broke out in the North Coast town of Tongaat on Monday.

Part of a small agricultural personnel office complex belonging to the Tongaat-Hulett Sugar Division at Klipfontein, near the Group head office Amanzimyama, was damaged.

The fire damaged a large lecture room, the clinic, security office and storerooms.

Forensic investigations are underway and at this stage the cause of the fire is unknown. Early estimates of the damage costs are between R1 million and R2 million.

There were no injuries.

Appointment of CEO of the Tongaat-Hulett Group Limited and retirement of Mr. CML Savage from executive duties

APPOINTMENT OF CEO OF THE TONGAAT-HULETT GROUP LIMITED AND RETIREMENT OF MR CML SAVAGE FROM EXECUTIVE DUTIES

The Board of The Tongaat-Hulett Group Limited is pleased to announce that Mr;Peter;H;Staude, currently Managing Director of Hulett Aluminium (Pty) Limited, has been appointed Chief Executive Officer of The Tongaat-Hulett Group Limited with effect from 10;May;2002, the date of the forthcoming Annual General Meeting. He succeeds Mr;Cedric;ML;Savage, who will be retiring from executive duties on the same date.

Mr Staude has held various operational and managerial positions at Hulett Aluminium since 1978, including the position of Managing Director of Hulett Aluminium Rolled Products since 1990 and Managing Director of Hulett Aluminium since 1996.;He has served as a director of the Group Board since 1996 and has been a member of the Executive Committee of the Board since 1997. As additional duties, he was appointed a Director of the Sugar Division in January 2000 and non-executive Chairman of the Starch & Glucose division in May 2000.

Mr Staude will also become Chairman of Hulett Aluminium from 10 May 2002. This will result in some management changes within that company and a further announcement will be made in due course.

Mr Savage has served the company for 24 years, of which 21 years were as an Executive Director of the Group Board.;In the past two, years he has carried out the dual role of CEO and Chairman of the Board.

MA KENNEDY
Group Secretary

28 January 2002

Strike at Hulett Aluminium not good for future investment

Peter Staude, Managing Director of Hulett Aluminium says, “The longer term impact of what is happening at Hulett Aluminium could well be more serious than the short term consequences. Hulett Aluminium has made one of the few major investments in manufacturing in South Africa in recent times. The Company is actively involved in attracting local and foreign investment in downstream aluminium businesses, to be supplied from its R2.4 billion new facilities. A strike such as ours, which is not based on a rejection of the wage offer is not good news when one is busy encouraging future investment.”
Peter Staude is a board member of the recently established Trade and Investment KwaZulu-Natal.

Annual wage negotiations have been concluded with both NETU (National Employee Trade Union) and SAEWA (South African Electrical Workers Association). Improvements were made to a number of conditions of service with wage increases ranging from 8.1% to 9%. Total cost to company amounts to approximately 9.5%.

Numsa (National Union of Metalworkers of South Africa) have rejected Hulett Aluminium’s conditional offer, which has now been withdrawn. Numsa members, who make up approximately 28% of the total Company’s employees, have been on strike since midday on Monday August 13, 2001. The impact on the Company has thus far been minimal.

Tongaat-Hulett Group revenue rises on strong divisional export performance

In line with expectations, the Tongaat-Hulett Group saw revenue from continuing operations driven by strong export performance rise by 20 percent to R2,6 billion and earnings rise 23 percent to R311 million, in the six months ended June 30, 2001.

The Group’s three internationally competitive businesses – sugar, starch & glucose and aluminium- as well as its property division produced good results.

As forecast, headline earnings were down by 4 percent to R204 million. This was mainly as a result of the financing costs now being expensed for the R2,4 billion Hulett Aluminium plant commissioned in November last year.

“While the Group is on track to record solid growth and operating earnings, we are unlikely to escape entirely the effects of the slowing world economy, ” said Cedric Savage, Group executive chairman.

“On a divisional level all companies performed well. The sugar division turned in a 19 percent increase in operating income. It is pleasing to see that there was an increased contribution from our operations in Mozambique and Swaziland.”

Sugar production from the South African operations is expected to be about 865 000 tons. Although this estimate is down on last year’s record season because of lower rainfall, increased world sugar prices and a favourable exchange rate has offset the effect of the lower volume.

The Starch and Glucose division has sought out new international business opportunities which provided strong growth in exports of both value-added and commodity products. Sales of prime products into the domestic market improved by 2 percent and export volumes by 68 percent. Yields improved at all of the division’s mills and earnings before interest and tax, rose 81 percent to R58 million.

Hulett Aluminium continued its good progress following the commissioning of its expanded plant and increased sales by 40 percent with new records in turnover and operating profits.

The business is steadily entering a wide range of niche markets driven by the capability that is being developed on its new facilities. It has responded quickly to changing world markets and conditions, adjusting its product range and markets to optimise its competitive position. This strategy is proving to be particularly advantageous in the present local and international market circumstances, enabling the business to capitalise on some attractive market opportunities in spite of a disconcerting reduction in global demand.

Hulett Aluminium’s operating income before depreciation increased by 36 percent and after taking depreciation into account increased by 23 percent to R116 million before interest and tax of which the Group’s 50 percent share was R58 million.

Higher residential and commercial sales were achieved by Moreland Estates, the Group’s property division, improving revenue earned by 53 percent.

During the six months the Group disposed of two non-core operations – the sale of the Building Materials division was finalised at the end of May and the sale of the Textiles division is still subject to certain preconditions, including the approval of the Competition Commission.

An interim dividend of 62 cents a share was declared.

With regard to the year ending 2001, Mr Savage said “as indicated in our 2000 annual report, the higher financing costs will tend to offset increases in operational earnings, with headline earnings for the year slightly lower than those of last year. Thereafter as strong cash flows progressively drive down debt, operating growth should translate into real growth in earnings per share.”

Tongaat-Hulett Group sells its textiles division

As disclosed in the Executive Chairman’s review in the annual report for the year ended 31 December 2000, the Tongaat-Hulett Group has been engaged in a process of disposing of its two remaining non-core businesses, namely Corobrik and Tongaat Textiles. The sale of Corobrik became unconditional at the end of May 2001.

An agreement has now been reached on the sale of the Group’s Textiles interests to Stefano Magni, Executive Chairman of Aranda Textile Mills (Pty) Limited. Aranda is a vertically integrated manufacturer of yarns, blankets and fabrics established since 1951.

The agreement is subject to the fulfilment of certain preconditions which include Competition Commission approval.

Corobrik sens

The Tongaat-Hulett Group Limited and the Scandinavian Building Systems Company are pleased to advise that all conditions precedent relating to the sale by the Tongaat-Hulett Group of its Building Materials Division to Scandinavian Building Systems were met and the sale was concluded on 30 May 2001.

The sale of textiles division

The Tongaat-Hulett Group Limited is pleased to advise that all conditions precedent relating to the sale of its Textiles Division, David Whitehead & Sons (S.A.) (Pty) Limited, to a company represented by Stefano Magni have been fulfilled effective 30 September 2001.

Whiteheads will continue to focus on apparel and home textiles with a view to growing its domestic and export business.

S J SAUNDERS