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AFE - AECI Limited - Closures At Sans Fibres

Release Date: 28/11/2007 14:00:02      Code(s): AFE
AFE - AECI Limited - Closures At Sans Fibres                                    
AECI LIMITED                                                                    
(Incorporated in the Republic of South Africa)                                  
(Registration number. 1924/002590/06)                                           
Share code:  AFE                                                                
ISIN: ZAE000000220                                                              
CLOSURES AT SANS FIBRES                                                         
SANS Fibres (Pty) Limited (SANS) will be exiting from the nylon high            
decitex industrial (HDI), the polyester HDI and the polyester light decitex     
industrial (LDI) yarn manufacturing businesses by the end of December 2007.     
The number of retrenchments, estimated to be about 850 people, as well as       
closure costs will be finalised once consultations have been concluded with     
all stakeholders including employees, customers and suppliers.                  
These SANS businesses have not been profitable for some time owing to           
several factors:                                                                
-    over investment in polyester HDI and LDI yarn plants, mainly in the        
    Far East, resulting in surplus capacity and very low prices;                
-    the significantly lower cost base of manufacturers in the Far East;        
-    the company`s inability to recover increasing raw material costs, in       
full, from customers;                                                       
-    the decision by the company`s predominant customer for nylon HDI to        
    exit -this business in South Africa;                                        
-    the strength of the rand.                                                  
This highly competitive situation will not change as investment in capacity     
in the Far East is continuing.                                                  
It is in this context, and after failing to find a partner or owner which       
could add value to these components or to SANS`s business as a whole, that      
the decisions on closures at Bellville were taken.                              
The nylon LDI and the PET plants will continue to operate normally whilst       
discussions with potential partners or purchasers for these businesses are      
SANS is a wholly-owned subsidiary of AECI Limited.                              
Woodmead, Sandton                                                               
28 November 2007                                                                
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Date: 28/11/2007 14:00:02 Supplied by www.sharenet.co.za                     
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