IM TO BRING THE COMPANY~S SUGAR PRODUCTION UP TO 100 000 TONS PER ANNUM BY

2001.

DON MACLEOD, MANAGING DIRECTOR OF ILLOVO SUGAR, ADVISED THAT THEY HAVE RECEIVED
OFFICIAL CONFIRMATION OF THEIR SUCCESSFUL BID FROM THE TANZANIAN GOVERNMENT
WHICH HAS DESCRIBED THE ILLOVO SUGAR / ED & F MAN PARTNERSHIP AS A "STRATEGIC
INVESTOR WITH APPROPRIATE TECHNOLOGY, STRONG MANAGEMENT, AND EXPERIENCE IN
OPERATING LARGE SUGAR ESTATES."

KILOMBERO SUGAR COMPANY CONSISTS OF TWO SUGAR ESTATES AND FACTORIES LOCATED 375
KILOMETRES SOUTH WEST OF DAR ES SALAAM WITH THE COMBINED PRODUCTION CAPACITY OF
100 000 TONS OF SUGAR PER ANNUM.  CURRENTLY PRODUCTION IS ABOUT 30 000 TONS.
THE ESTATES COMPRISE 6 400 HECTARES OF IRRIGATED SUGARCANE (A FURTHER 3 800
HECTARES ARE CULTIVATED BY OUTGROWERS) WITH CONSIDERABLE POTENTIAL FOR
EXPANSION.  THERE ARE GOOD SOILS, RELIABLE WATER SUPPLIES FOR IRRIGATION AND
GOOD CLIMATIC CONDITIONS CONDUCIVE TO SUGARCANE AGRICULTURE.

THE TANZANIAN SUGAR INDUSTRY IS UNDERGOING A PROCESS OF PRIVATISATION AND OF
THE FOUR SUGAR COMPANIES CURRENTLY OPERATING IN THE COUNTRY, THREE (INCL.
KILOMBERO) HAVE BEEN EARMARKED FOR PRIVATISATION.  WITH CURRENT TOTAL
PRODUCTION OF ABOUT 110 000 TONS PER ANNUM, SUGAR CONTRIBUTES 35% TO GROSS
OUTPUT OF THE FOOD SECTOR AND EMPLOYS ABOUT 15 000 PEOPLE.

THE INDUSTRY HAS A PREFERENTIALLY PRICED QUOTA UNDER THE EUROPEAN SUGAR
PROTOCOL OF 10 500 TONS AND AN ALLOCATION UNDER THE SPECIAL PREFERENTIAL SUGAR
QUOTA OF 3 700 TONS.

DOMESTIC DEMAND FOR SUGAR (BOTH DIRECT AND INDUSTRIAL) STANDS AT ABOUT 300 000
TONS, MOST OF WHICH HAS TO BE IMPORTED.  IT IS THE HOPE OF THE TANZANIAN
AUTHORITIES THAT BY PRIVATISING THE INDUSTRY, DOMESTIC CONSUMPTION COULD
EVENTUALLY BE SATISFIED BY THE COUNTRY~S OWN PRODUCERS, WHICH WILL RESULT IN
SUBSTANTIAL EMPLOYMENT CREATION AND ECONOMIC DEVELOPMENT OF THE COUNTRY.
DON MACLEOD SAYS THAT ILLOVO WILL HOLD 55% OF THE SHARES WHILST ITS PARTNER, ED
& F MAN WILL HOLD 20%.  THE REMAINING 25% ARE TO BE RETAINED BY THE GOVERNMENT
FOR EVENTUAL FLOTATION IN LINE WITH THE GOVERNMENT~S POLICY TO ENSURE
PARTICIPATION OF TANZANIANS IN ALL LARGE SCALE PRIVATISATION.

"ONCE THE PAPER WORK HAS BEEN COMPLETED, WE WILL BE TAKING OVER THE MANAGEMENT
AND INSTALLING OUR TECHNICAL EXPERTISE ON SITE AS SOON AS POSSIBLE.  THIS
ACQUISITION FITS INTO OUR STRATEGIC PLANS FOR GEOGRAPHIC DIVERSIFICATION AND
EXPANSION IN AFRICA WHERE WE HAVE SIGNIFICANT EXPERTISE AND COMPETENCE.
"WE ARE PLEASED TO HAVE ED & F MAN SUGAR AS A PARTNER AS THEY HAVE EXTENSIVE
EXPERIENCE IN AFRICAN SUGAR MARKETING, PARTICULARLY IN TANZANIA WHERE THEY HAVE
BUILT UP A NETWORK OF OPERATING CHANNELS FOR THE NATIONAL DISTRIBUTION OF SUGAR
IN TANZANIA," SAYS DON MACLEOD.

ED & F MAN SUGAR LIMITED IS PART OF THE ED & F MAN GROUP WHICH OPERATES IN 60
COUNTRIES WITH TWO PRINCIPAL BUSINESSES - THE SUPPLY OF AGRICULTURAL PRODUCTS
AND THE PROVISION OF FINANCIAL SERVICES.
ENDS