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PRIVATISATION BID
CHAIRMAN'S ADDRESS AT THE 83RD ANNUAL GENERAL MEETING OF SHAREHOLDERS OF THE
YORK TIMBER ORGANISATION LTD HELD AT YORKCOR PARK, VAL DE GRACE, PRETORIA ON 17
APRIL 1998.
SALIENT FEATURES:
- YORKCOR'S BUSINESS GOALS FOR 1998 WERE TO BEAT LAST YEAR'S EXCELLENT RESULTS
DESPITE THE TIMBER INDUSTRY'S SLOW START IN THE NEW YEAR.
- IN THE LAST FINANCIAL YEAR, YORKCOR POSTED A RL2 MILLION BOTTOM LINE
TURNAROUND. HEADLINE EARNINGS WERE 28.2 CENTS PER SHARE FROM A NEGATIVE 47.2 IN
1996. DIVIDENDS DECLARED WERE 15 CENTS PER SHARE (1996: NIL), WITH BONUS SHARE
OPTIONS AGAIN.
- YORKCOR/MADIBA MILLS-LED CONSORTIUM ASSEMBLED TO PREPARE A BID FOR SAFCOL'S
PRIVATISATION.
- IN LATEST ACTION TO PROTECT THE GROUP'S FOREST RESOURCE ENTITLEMENTS, THE
HIGH COURT GAVE JUDGMENT ON THURSDAY, 16 APRIL, IN FAVOUR OF YORKCOR, ORDERING
GOVERNMENT TO MAKE A QUANTIFIED OFFER FOR LOG SUPPLIES TO YORKCOR UNDER THE
LONG-TERM CONTRACT AND TO PAY THE COSTS OF THE ACTION.
YORKCOR CHAIRMAN SOLLY TUCKER TOLD SHAREHOLDERS AT THE COMPANY'S 83RD ANNUAL
GENERAL MEETING ON FRIDAY, 17 APRIL, THAT THE EXCELLENT RESULTS FOR THE YEAR TO
31 DECEMBER 1997 WOULD BE HARD TO BEAT. MANAGEMENT WAS COMMITTED TO MAINTAINING
THE POSITIVE TREND IN THE GROUP'S PERFORMANCE LAST YEAR IN THE FACE OF AN
UNEXPECTEDLY SLOW START TO THE NEW YEAR IN GENERAL CONDITIONS
FOR THE TIMBER INDUSTRY. ACTIVITY IN THE CONSTRUCTION AND FURNITURE
SECTORS OF THE ECONOMY WAS PEDESTRIAN IN THE FIRST QUARTER OF 1998.
"ONLY THE ATHLETIC WERE DOING BETTER BUSINESS THAN LAST YEAR. THE WINNING
PERFORMANCE OF 1997 WOULD BE A HARD ACT TO FOLLOW," SAID TUCKER.
YORKCOR'S ROBUST TURNAROUND
"YORKCOR POSTS A ROBUST TURNAROUND OF R12 MILLION IN THE ACCOUNTS TABLED AT
TODAY'S MEETING," TUCKER DECLARED. A 30% INCREASE IN TURNOVER TO R57,3 MILLION
HAD BOOSTED BOTTOM LINE PROFITS TO R4,7 MILLION, FROM A LOSS IN THE PREVIOUS
YEAR OF R7,2 MILLION. HEADLINE EARNINGS WERE 28,2 CENTS PER SHARE FROM A
NEGATIVE 47,2 CENTS PER SHARE. DIVIDENDS FOR 1997 (WITH A BONUS SHARE
ALTERNATIVE) AMOUNTED TO 15 CENTS PER SHARE (1996: NIL).
MANAGEMENT WAS COMMITTED TO BUSINESS GOALS FOR 1998 WHICH AMOUNTED TO A 50%
IMPROVEMENT IN HEADLINE EARNINGS TO 42 CENTS PER SHARE, WITH DIVIDENDS UP 33.3%
FROM 15 CENTS TO 20 CENTS PER SHARE.
"THESE TARGETS REPRESENT TOUGH CHALLENGES. THE MELT-DOWN IN THE PACIFIC RIM HAS
IMPACTED SIGNIFICANTLY ON OUR EXPORTS AND WE HAVE HAD TO REDIRECT OUR EXPORT
THRUST TO OTHER MARKETS WHICH, THOUGH PROMISING, WILL TAKE TIME TO DEVELOP.
"I LEAVE NEXT WEEK ON AN EXTENSIVE OVERSEAS MISSION TO GINGER UP OUR PROGRESS
IN SEVERAL OVERSEAS MARKETS," TUCKER TOLD SHAREHOLDERS.
"IN THE DOMESTIC MARKET, WE WERE RELYING ON A MUCH BRISKER PACE OF HOUSING
STARTS - A NATIONAL PRIORITY LONG IN PROMISES BUT GRIEVOUSLY SHORT IN DELIVERY.
PUBLISHED STATISTICS PROVIDE SOME ENCOURAGEMENT, BUT THERE IS A LONG WAY TO GO
AND THE HOUR GLASS IS RUNNING OUT OF SAND," SAID TUCKER.
CONSORTIUM TO BID FOR SAFCOL
PROGRESS HAS BEEN MADE IN THE INITIATIVE TO SECURE A PARTICIPATION FOR YORKCOR
IN THE PRIVATISATION OF SAFCOL. A CONSORTIUM IS BEING ASSEMBLED IN WHICH
YORKCOR'S STRATEGIC ALLY, MADIBA MILLS, WILL PLAY A LEADING ROLE. MADIBA MILLS
WAS LAUNCHED BY YORKCOR TWO YEARS AGO AND OPERATES A SAWMILL NEAR WHITE RIVER,
MPUMALANGA. IT IS THE ONLY BLACK EMPOWERMENT ENTERPRISE IN THE FORMAL
SAWMILLING INDUSTRY.
"MY MISSION OVERSEAS OVER THE NEXT FEW WEEKS WILL INCLUDE TALKS TO ENGAGE
GLOBAL FOREST PRODUCTS CORPORATIONS AS PARTICIPANTS IN THE SAFCOL OPPORTUNITY,"
REVEALED TUCKER.
"BESIDE FOREIGN RISK CAPITAL, THE SUCCESSFUL BIDDERS FOR THE SUBSTANTIAL ASSETS
OF SAFCOL (MUCH OF THE VALUE OF WHICH IS MADE UP OF WORLD CLASS TIMBER
RESOURCE) WOULD HAVE TO BRING SPECIAL INDUCEMENTS TO THE TABLE," HE SAID.
ESSENTIAL, TOO, WILL BE A CONVINCING ABILITY TO TRANSFER STATE-OF-THE-ART
TECHNOLOGY, FRESH TIMBER PRODUCTS AND NEW MARKETS."
THE YORKCOR/MADIBA BID INITIATIVE WILL EMBRACE PLANS TO INCLUDE SAFCOL
MANAGEMENT AND STAFF (IN TUCKER'S WORDS, "A PRECIOUS RESERVOIR OF EXPERTISE AND
EXPERIENCE") AS WELL AS TRADE UNION INTERESTS.
COURT JUDGMENT IN FAVOUR OF YORKCOR
"THE HIGH COURT'S JUDGMENT YESTERDAY IN YORKCOR'S FAVOUR, REPRESENTS A MAJOR
STEP FORWARD IN CONSOLIDATING YORKCOR'S SECURITY OF TIMBER SUPPLY," SAID
TUCKER. "ASSURED ACCESS TO FOREST RESOURCES GOES TO THE ROOT OF ANY SAWMILLING
INDUSTRY.
THE COURT ORDERED THE GOVERNMENT TO MAKE A FIRM OFFER FORTHWITH, QUANTIFIED IN
CUBIC METRES, TO YORK TIMBERS LIMITED OF THE ENTIRE AVAILABLE VOLUME OF
SOFTWOOD SAWLOGS ARISING FROM NORMAL SILVICULTURAL OPERATIONS IN THREE PINE
PLANTATIONS, STIPULATED IN A LONG-TERM AGREEMENT CONCLUDED WITH THE ERSTWHILE
HOMELAND GOVERNMENT OF LEBOWA.
THIS IS THE THIRD CASE IN WHICH THE GOVERNMENT AND YORKCOR HAVE TESTED THE
VALIDITY AND INTERPRETATION OF THE LONG-TERM SAWLOG CONTRACT IN COURT. THERE
WAS A SIMILAR COURT ORDER IN FAVOUR OF YORKCOR TWO YEARS AGO IN WHICH THE
"EVERGREEN" ENFORCEABILITY OF ITS CONTRACT WITH SAFCOL WAS PUT TO THE TEST.
YORKCOR'S POSITION IN THAT ACTION ALSO PASSED MUSTER.
"PLEASED AS WE ARE WITH THE SUCCESSFUL OUTCOME OF THIS LITIGATION, WE AT
YORKCOR ARE MINDFUL OF OUR WIDER RESPONSIBILITY THAN JUST TO OUR SHAREHOLDERS.
WE HAVE DIVERSE STAKEHOLDERS WHO HAVE AN INTEREST, DIRECT AND INDIRECT, IN OUR
OPERATIONS AND WE HAVE TO LIVE UP TO THEIR EXPECTATIONS,
APART FROM OUR CORE DUTY TO MAKE PROFITS AND DISTRIBUTE DIVIDENDS.
"YORKCOR HAS BECOME A VISIBLE AND APPRECIATED FORCE FOR GOOD AMONGST
NEIGHBOURING COMMUNITIES NEAR OUR SAWMILLS," TUCKER TOLD SHAREHOLDERS.
"WE LAUNCHED OUR SOCIO-ECONOMIC INITIATIVES IN THE REMOTE AREAS WHERE WE
OPERATE SEVERAL YEARS AGO. THE POSITIVE IMPACT WE ARE MAKING AMONGST OUR
NEIGHBOURS IS BEGINNING TO TELL IN OUR FAVOUR. "
DIRECTORS
"TWO NON-EXECUTIVE DIRECTORS WITH A RECORD OF DISTINGUISHED SERVICE TO YORKCOR
RETIRE FROM THE BOARD TODAY - RICHARD WILKINSON, A RENOWNED AUTHORITY ON
CORPORATE GOVERNANCE, AND PROFESSOR MOHALE MAHANYELE, A PIONEER IN THE
ADVANCEMENT OF BLACK EMPOWERMENT IN BUSINESS. BOTH HAVE BEEN ASSOCIATED WITH
THE COMPANY FOR MORE THAN TWO THREE-YEAR CYCLES OF SERVICE. WE SALUTE THEM FOR
THEIR SERVICE AND WILL MISS THEM".
"WE EXPECT TO BE ABLE TO ANNOUNCE NEW INCUMBENTS TO TAKE UP THE VACANCIES THAT
ARISE IN OUR BOARD AND GOVERNANCE COMMITTEES AS SOON AS WE ARE SO ENABLED BY
THE PROGRESS IN OUR NEGOTIATIONS FOR THE ASSEMBLY OF A CONSORTIUM FOR THE
SAFCOL, PRIVATISATION BID," TUCKER CONCLUDED.
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