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OMN - Omnia Holdings Limited - Omnia`s New Nitric Acid Complex on time and below

Release Date: 09/05/2012 12:00:03      Code(s): OMN
OMN - Omnia Holdings Limited - Omnia`s New Nitric Acid Complex on time and below
OMNIA HOLDINGS LIMITED                                                          
(Incorporated in the Republic of South Africa)                                  
(Registration number 1967/003680/06)                                            
JSE code: OMN                                                                   
ISIN: ZAE000005153                                                              
("Omnia" or "the Group")                                                        
Omnia is delighted to announce the successful completion of its world class     
Nitric Acid Complex in Sasolburg, which started operating towards the end of    
March 2012. This Complex is the first of its kind to be built in South Africa   
for many decades. The Complex represents a milestone investment in the          
development of South Africa to produce nitric acid and will alleviate the       
pressure Omnia experienced as a result of an increasing shortage of this        
critical raw material.                                                          
The Nitric Acid Complex is a much needed investment in the future of South      
Africa`s mining and agriculture sector.  Despite Omnia`s existing plant being   
operated at full capacity, the growth in Omnia`s markets has led to an          
increasing shortage of nitric acid which has in particular, restricted its use  
in its fertilizer business.  In 2010 Omnia announced that R1 billion was raised 
for the Complex, with a capital budget of R1.4 billion (excluding capitalised   
interest). Today, Omnia is pleased to announce that the expected cost for the   
Complex will be below budget.                                                   
Rod Humphris, Omnia Group Managing Director, said: "The capital cost at less    
than $200m compares favourably with international benchmarks for similar plants 
of $500m.  We are extremely pleased that the start-up was achieved in a record  
construction period of 21 months - a very tight time schedule for a capital     
project of this nature. The construction was managed by our own internal team." 
The completion of the Nitric Acid Complex is a great development for the Group  
and will enhance South Africa`s capacity to produce nitric acid and ammonium    
nitrate using world class technology. The Complex will have a positive impact on
the Group`s performance going forward and updated guidance in this regard will  
be provided when the Group`s results for the year ended 31 March 2012 are       
released on 26 June 2012. Ramp up to full capacity will take place in line with 
growth in the explosives and fertilizer markets.                                
The Complex comprises a nitric acid plant, an ammonium nitrate plant, a porous  
ammonium nitrate plant (PGAN), a fleet of 145 specialised ammonia rail tankers  
and other ancillary facilities. The nitric acid plant will produce 1 000 tons   
per day which is 40% more than the current plant. German engineering design     
company ThyssenKrupp Uhde, one of the world`s leading companies in the design   
and construction of chemical, refining and industrial plants, supplied the      
technology, licences and engineering design.                                    
The Complex is Omnia`s biggest investment to date and demonstrates the Group`s  
commitment to South Africa`s mining and agricultural sectors. Not only does it  
create a new growth path for the Group but it is also, together with the        
existing plant, a major step in ensuring security and continuity of supply for  
the Group`s explosives and fertilizer businesses.                               
Humphris noted: "These plants provide growth opportunities for our Omnia        
Fertilizer and BME operations, allowing us to take advantage of the increasing  
demand for fertilisers and explosives as a result of the significant growth in  
the agriculture and mining sectors in South and Southern Africa."               
Omnia uses international leading technology, EnviNOxRegistered of ThyssenKrupp  
Uhde, which is more than 98% efficient, to eliminate greenhouse gases at its new
and old nitric acid plants in Sasolburg. The new nitric acid plant is expected  
to generate up to 350,000 carbon credits annually at full load, in terms of the 
United Nations Framework Convention on Climate Change (UNFCCC) which recently   
approved a new mechanism for the abatement of greenhouse gas emissions arising  
from new nitric acid plants. In the first year of operation, the new nitric acid
plant is expected to achieve 60% of this total. One of the features of the new  
complex is that it will generate approximately 50% of the total electricity     
demand for the entire Sasolburg site from excess steam resulting from the       
exothermic nature of the reactions in the plant. This benefits the business in  
buffering the high inflationary electricity price increases and substantially   
reduces the Group`s carbon footprint even further.                              
Omnia recently became the first company in sub-Saharan Africa to be issued in   
excess of a million Certified Emission Reductions (CERs) by the Executive Board 
of the Clean Development Mechanism Protocol. Omnia has to date been issued with 
a total of 1 076 015 CERs, 42% of the total quantity issued in Southern Africa. 
Humphris concluded: "We chose this technology as we believe that the            
alternatives are not nearly as efficient and are therefore not in line with     
Omnia`s commitment to reducing its environmental impact and effect on climate   
change. The new Nitric Acid Complex establishes a new growth platform for the   
Group which will be of immense benefit to our customers in the growth of their  
Note to editors:                                                                
Background on the investment                                                    
In May 2010, the Omnia board approved a R1,4bn investment in a second nitric    
acid complex aimed at alleviating the growing shortage of raw materials,        
particularly in the mining division. The investment by Omnia was driven by      
growing demand in its explosives and fertilizer markets as a result of          
international demand and development trends in mining and agriculture which are 
set to continue.                                                                
Omnia`s need for Nitric Acid, and history of raw material supply                
Nitric acid (HNO3) is a core raw material for both fertilizer and explosives    
manufacturing. Omnia`s nitric acid plant in Sasolburg was commissioned in 1983  
with the main purpose of supplying the fertilizer market during the early years.
The growth in the explosives market has now eroded the industry`s spare         
capacity, and is expected to do so for the foreseeable future. There are also   
technical challenges inherent in importing nitrates which make this an          
increasingly unattractive raw material supply solution. BME, Omnia`s explosives 
business, has since developed a strong market presence, demanding an ever-      
increasing portion of the nitric acid plant capacity. The development of calcium
nitrate (used both as a fertilizer and in explosives manufacturing) has also    
added to the nitric acid demand within the Group.                               
The new plant logistics include investment in rail infrastructure, via state of 
the art rail tankers, to comply with best practice safety transportation        
About Omnia                                                                     
Omnia is a diversified, specialist chemical services provider with business     
interests balanced across chemical, mining and agricultural markets. The Group`s
business model, which leverages its intellectual capital and technology,        
differentiates it from commodity chemical companies.                            
The Group`s three businesses (chemical, mining and agriculture) continue to     
provide high value, customised solutions built on a continually expanding       
knowledge base. Omnia`s unique business model places it at the forefront of the 
chemical services industry and involves matching customer needs to product      
innovation and application expertise to add extraordinary value to its customers
Issued by Brunswick:                              011 502 7400                  
Taryn Wulfsohn                                    083 273 1301                  
For more information contact:                                                   
Rod Humphris, Omnia Group Managing Director            011 709 8850             
9 May 2012                                                                      
One Capital                                                                     
Date: 09/05/2012 12:00:03 Supplied by www.sharenet.co.za                     
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