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African Oxygen Limited - Afrox To Invest R750m In Sa Operations

Release Date: 22/11/2012 17:10:00      Code(s): AFX     
AFRICAN OXYGEN LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1927/000089/06)
JSE code: AFX
NSX code: AOX
ISIN: ZAE000067120
(?Afrox? or "the Company")


AFROX TO INVEST R750M IN SA OPERATIONS

Afrox is to invest R750-million on a new state-of-the-art commercial hub in KwaZulu-Natal
and on a new air separation unit (ASU) to service customers in the Eastern Cape, the
company announced today.

?This capital investment is the first tranche of a R1.5-billion programme to boost customer
service levels to support our growth strategy in South Africa and enabling us to capture our
fair share of business in the emerging markets of sub-Saharan Africa,? said Afrox Managing
Director, Brett Kimber.

Kimber confirmed that R500m of that will be the price tag to relocate its Durban operations
to a new centralised business campus to be developed at Tongaat Huletts? new Cornubia
Industrial and Business Estate (CIBE), near Umhlanga and the King Shaka International
Airport.

This 111,000 square metre site will be the single biggest project Afrox has ever undertaken
in South Africa and will be a benchmark for parent company, The Linde Group?s industrial
gases operations worldwide.

The new site will be the most advanced facility of its kind and will be Afrox?s largest single
filling site on the African continent, filling an average of 5,000 cylinders a day, with the
capacity to increase production by up to 40%.

?This is about meeting the needs of customers and recognising and applying market trends
to the best benefit of all stakeholders in using eco-friendly designs and technologies,? said
Kimber.

The new facility will accommodate Afrox?s existing industrial and medical gases filling
operations, currently located at Maydon Wharf, and two other operations presently based in
Pinetown and Seaview.

Added Kimber: ?A factor that influenced this investment is the imminent redevelopment of
the Port of Durban?s infrastructure, which includes major reconstruction activities at
Maydon Wharf, where we have been conducting our industrial and medical gas filling
activities for many years.?

A further R250m of the R1.5 billion investment programme has been earmarked for a 150
tons-per-day ASU to service customers in Port Elizabeth, and the surrounding region. The
stand-alone plant will be located on an established site within the Coega Industrial
Development Zone, South Africa?s foremost investment hotspot.
Said Kimber: ?Afrox has been planning this investment in the Eastern Cape for a while now,
considering the availability of supplies and the challenges posed by having to reliably trunk
product to customers by road.?

Currently, demand for industrial gases in the Eastern Cape can only be satisfied by trucking
in product by road tanker, sometimes over distances ranging from 400kms to more than
1,100kms, with all the associated risks around South Africa?s annual wage negotiations and
road safety issues.

?Afrox is a proudly South African company and we have made our intentions clear to
customers in the Eastern Cape that we will be investing in the future of their businesses and
this announcement is Afrox delivering on that promise, to the tune of R250-million,?
confirmed Kimber.

 ?We will be breaking ground next year and the plant will be in production by 2014, which
allows us to speedily ramp up our service to existing and new Afrox customers, reducing
cost-to-serve and ensuring security of supply for the region.?


Johannesburg
22 November 2012

Sponsor
One Capital

Date: 22/11/2012 05:10:00 Supplied by www.sharenet.co.za                     
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