PIONEER FOOD GROUP LIMITED - Pre-Close trading update for the eleven months to 31 August 2012

Pre-Close trading update for the eleven months to 31 August 2012

Pioneer Food Group Limited
Incorporated in the Republic of South Africa
Registration number: 1996/017676/06
Share code: PFG
ISIN code: ZAE000118279
(“Pioneer Foods” or “the Group”)

PRE-CLOSE TRADING UPDATE FOR THE ELEVEN MONTHS TO 31 AUGUST
2012

Pioneer Foods provides this trading update based on         the
results for the eleven months to 31 August 2012, ahead of   the
Group`s closed period from 15 September 2012 to             the
publication of the annual results for the 12 months to       30
September 2012 on or about 26 November 2012.

Revenue for the eleven months increased by 10.5% to R16.7
billion with volumes contracting by between 2% and 4% on
average in the Group`s product basket as consumer spend
remains constrained. Price inflation on the Group`s basket of
products is estimated at c.13.5% for the period under review.

Substantial increases in operating costs continued,       most
notably in electricity, payroll and transport costs.

Grain prices have been volatile and are trending upwards
again. Maize prices are back at historical highs following
lower than anticipated crop estimates caused by severe drought
conditions in the USA.

SASKO

Volumes in wheat, maize and bread products have improved from
June 2012 through lower average selling prices and judicious
price point management in the respective categories.

Pasta volumes remained stable at constant prices in the face
of continued imports of lower priced products and stiff local
competition.

Growing price differentials between premium Thai rice and
Indian rice allowed for stable price management and volume
growth in the premium category of c.10%, capturing some market
share. Price discounting in the non-premium products lead to
volume increases of c.5%.
Consistent increases in raw material costs have necessitated
price increases of c.10% in wheat and maize products with
effect from September 2012. Further price increases between 8
to 12% will be implemented in October 2012 in bread, maize and
wheaten products.

AGRI

Feeds volumes were stable with price increases recovering the
higher raw material cost.

The broiler industry is experiencing unprecedented price and
volume pressure. Measures to contain operating cost increases
and improve efficiencies could not protect margin at lower
sales volumes.

Good on-farm egg performance led to volume growth. Sales
prices remained flat despite raw material cost increases
placing pressure on margins.

BOKOMO FOODS

Breakfast cereals performed well with good volume growth at
constant selling prices.

Volumes in Moir`s biscuits responded well     to   lower   price
points and are performing to expectation.

Better than anticipated international raisin prices and
favourable currency hedges, have mitigated the impact on
earnings of the smaller raisin crop in the current financial
year.

THE CERES BEVERAGE COMPANY

Volumes are under pressure in the ready-to-drink beverage
categories due to constrained consumer spend, the colder than
average winter season as well as cost increases of fruit
concentrates. As a result, sales prices of fruit juices
increased by c.12% from July 2012.

Continued fierce competitor activity in the carbonated soft
drink category had a negative effect on margins and led to
lower than expected volume growth in the lower single digits.
Volumes in the fruit concentrate mixtures category continued
to grow by double digits as consumers supported these products
as more affordable alternatives to ready-to-drink products.

The Wadeville fruit     juice   capacity   is   installed   and   in
operation as planned.

The information provided in this trading update has not been
reviewed or reported on by the Group’s independent auditors.

Paarl
4 September 2012

Sponsor
PSG Capital

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