ILLOVO PRESS RELEASE - MARAGRA SUGAR MILL RE-OPENS FOR BUSINESS

11 OCTOBER 1999

ANOTHER STEP IN THE PROCESS OF ECONOMIC RECONSTRUCTION IN MOZAMBIQUE HAS BEEN
ACHIEVED WITH THE RE-OPENING OF THE MARAGRA SUGAR MILL FOLLOWING AN EXTENSIVE
TWO-YEAR REHABILITATION PROGRAMME CARRIED OUT IN BOTH THE SUGARCANE FIELDS AND
FACTORY.  THE MILL LAST OPERATED IN 1984 AND BEFORE THE REHABILITATION
PROGRAMME BEGAN IN JULY 1997, ITS EQUIPMENT HAD DETERIORATED INTO A STATE OF
SERIOUS DISREPAIR.

NOW OPERATING UNDER THE NAME OF MARAGRA ACUCAR SARL IN WHICH THE ILLOVO SUGAR
GROUP HAS AN EQUAL SHARE WITH ITS PARTNERS IN THE PROJECT - MARAGRA SARL, THE
MARAGRA MILL WAS RE-OPENED BY THE PRESIDENT OF MOZAMBIQUE, HIS EXCELLENCY
JOAQUIM ALBERTO CHISSANO, AT AN ON-SITE CEREMONY TODAY (11 OCTOBER 1999).  THE
COMMENCEMENT OF OPERATIONS AT THE MILL SIGNALS ANOTHER STEP FORWARD IN THE
RE-BIRTH OF THE ONCE-VIBRANT MOZAMBICAN SUGAR INDUSTRY AS WELL AS THE

SOCIO-ECONOMIC DEVELOPMENT OF THE MAPUTO PROVINCE AND OF THE COUNTRY'S ECONOMY
IN GENERAL.  WITH UPWARDS OF 700 PEOPLE CURRENTLY EMPLOYED AT THE MILL AND THE
SURROUNDING ESTATES, THERE HAS ALREADY BEEN SIGNIFICANT ECONOMIC BENEFIT
REALISED TO THE SURROUNDING LOCAL COMMUNITIES.

FOLLOWING THE SUCCESSFUL COMMISSIONING OF THE MILL EARLIER THIS YEAR AND THE
CONTINUED REHABILITATION OF THE SUGARCANE FIELDS, MARAGRA ACUCAR SARL WILL THIS
YEAR WILL PRODUCE 9 000 TONS OF RAW SUGAR WITH THE NEXT OBJECTIVE OF PRODUCING
70 000 TONS, AS MORE SUGARCANE BECOMES AVAILABLE, BY 2002.  THE LONGER TERM
GOAL IS TO OPTIMISE THE MILLING CAPACITY OF THE FACTORY TO PRODUCE 100 000 TONS
OF SUGAR PER ANNUM.

THE COST OF THE REHABILITATION OF THE FACTORY AND THE SUPPORTING STRUCTURE
(SUCH AS ROADS, BUILDINGS AND OFFICES) IS SET AT APPROXIMATELY US$25 MILLION TO
BE BORNE EQUALLY BY ILLOVO AND MARAGRA SARL.

A POSITIVE FACTOR IN THE REHABILITATION OF THE FACTORY WAS THE MOTHBALLING OF
KEY EQUIPMENT BY THE ORIGINAL FOUNDERS OF THE MILL, CO-ORDINATED BY JORGE
PETIZ, CHAIRMAN OF MARAGRA SARL, AND BY ITS PREVIOUS EMPLOYEES.  ALTHOUGH SOME
OF THIS EQUIPMENT AND MACHINERY IS IN OPERATION TODAY, THE FACTORY REQUIRED
EXTENSIVE REPAIR WORK EXTENDING THROUGH TO EVERY PART OF THE FACILITY.
ON THE FARMING SIDE, THE TOTAL COST OF THE REHABILITATION AND DEVELOPMENT OF 6
200 HECTARES OF SUGARCANE IS ESTIMATED AT APPROXIMATELY US$30 MILLION.  THIS
COST IS TO BE BORNE EQUALLY BY PRIVATE GROWERS WHO HAVE ESTABLISHED CANE
GROWING OPERATIONS ON HALF OF THIS LAND AND BY ILLOVO'S JOINT VENTURE PARTNER
IN THE PROJECT, MARAGRA COMERCIAL.  THE AGRICULTURAL OPERATIONS HAVE ALSO
REQUIRED EXTENSIVE REHABILITATION, INVOLVING THE UPGRADING OF ROADS, THE
RESTORATION OF ADEQUATE DRAINAGE (INCLUDING THE CLEARING OF ALL CANALS AND
REPAIR OF PUMP STATIONS), THE RE-ESTABLISHMENT OF IRRIGATION SYSTEMS AND THE
LAND PREPARATION REQUIRED FOR THE RE-ESTABLISHMENT OF SUGARCANE FIELDS.
DON MACLEOD, MANAGING DIRECTOR OF ILLOVO SUGAR AND CHAIRMAN OF MARAGRA ACUCAR
SARL SAID THE TRANSFORMATION FROM WHAT THE OPERATIONS WERE BEFORE TO WHAT THEY
HAD BECOME TODAY, WAS A MAGNIFICENT ACHIEVEMENT.

"DURING OUR FIRST EXPLORATORY VISITS TO THE MILL, WHEN ILLOVO WAS FIRST
APPROACHED BY JORGE PETIZ AS A POTENTIAL PARTICIPANT IN THE PROJECT, WE
REALISED THEN THE EXTENT OF THE REHABILITATION PROGRAMME WHICH WOULD HAVE TO
TAKE PLACE.  THERE WAS VERY LITTLE SIGN OF ANY AGRICULTURAL ACTIVITY IN THE
FIELDS WHICH WERE EITHER FLOODED BY MARSHLANDS OR TAKEN OVER BY UNCONTROLLED
VEGETATION, WHILE THE FACTORY WAS A MAIZE OF CORRODED PIPES, BROKEN PROCESS
VESSELS AND NON-FUNCTIONING EQUIPMENT.  HAPPILY, TWO YEARS LATER, THE

REHABILITATION HAS BEEN SUCCESSFULLY COMPLETED AND THE FINAL OPERATION OF THE
MILL IS A TRIBUTE TO THE EFFORTS OF THE MANAGEMENT AND STAFF OF MARAGRA ACUCAR
SARL," SAID MR MACLEOD.

HE SAID THAT THE MARAGRA OPERATION WAS ANOTHER STEP FORWARD IN THE GROUP'S
STRATEGIC INTENT TO BECOME A GLOBAL, LOW COST PRODUCER OF HIGH QUALITY PRODUCTS
JORGE PETIZ, CHAIRMAN OF MARAGRA SARL, SAID THAT THERE WERE MANY FACTORS WHICH
HAD ULTIMATELY RESULTED IN THE SUCCESSFUL REHABILITATION OF MARAGRA, THE MOST
IMPORTANT OF WHICH WAS THE GOVERNMENT'S INITIAL REALISATION OF THE NEED TO
RE-PRIVATISE THE SUGAR INDUSTRY IN MOZAMBIQUE.

ALSO, HE SAID, THE FOUNDING SHAREHOLDERS WERE EQUALLY AWARE OF THE DYNAMIC
CHANGES CURRENTLY TAKING PLACE IN THE WORLD OF SUGAR AND OF THE ABSOLUTE
NECESSITY TO ACHIEVE GLOBAL COMPETITIVENESS IN ANY SUGAR OPERATION.  THUS IT
WAS CRUCIAL THAT A MAJOR SUGAR OF GROUP OF ILLOVO'S INTERNATIONAL STATURE BE
INCORPORATED INTO THE REHABILITATION PLANS.

"SPEAKING ON BEHALF OF THE FOUNDER SHAREHOLDERS, WE ARE PROUD TO HAVE THE
INVOLVEMENT OF MR DON MACLEOD, MANAGING DIRECTOR OF ILLOVO SUGAR AND CHAIRMAN
OF MARAGRA ACUCAR SARL, AS HIS VISION AND COURAGE TO GET ILLOVO INVOLVED HAS
BROUGHT LIFE BACK TO MARAGRA AND ITS SURROUNDING COMMUNITIES," SAID MR PETIZ.
MARAGRA ACUCAR SARL HAS THE FOLLOWING STRATEGIC ATTRIBUTES:

-  EXCELLENT GROWING CONDITIONS AND WATER AVAILABILITY
-  MODERATE LABOUR COSTS
-  PROXIMITY TO A MAJOR HARBOUR

-  GOOD ROAD AND RAIL LINKS BETWEEN MARAGRA AND MAPUTO
-  GROWING LOCAL SUGAR CONSUMPTION LEVELS

-  THE MILL IS SITUATED IN THE MAPUTO DEVELOPMENT CORRIDOR
ENDS