ILLOVO SUGAR LIMITED ANNUAL GENERAL MEETING - CHAIRMAN'S STATEMENT

ILLOVO SUGAR LIMITED
ANNUAL GENERAL MEETING
CHAIRMAN'S ADDRESS - ROBBIE WILLIAMS

I WELCOME THE OPPORTUNITY PROVIDED BY THIS SHAREHOLDER'S MEETING TO GIVE YOU AN
UPDATE ON THE GROUP'S OPERATIONS.

IN SOUTH AFRICA THE CURRENT 1999/2000 SEASON'S PRODUCTION OF 1 169 000 TONS OF
SUGAR WAS IN LINE WITH FORECASTS AND REPRESENTS THE SECOND HIGHEST SEASONAL
OUTPUT EVER ACHIEVED BY ILLOVO.  THE FACTORIES OPERATED STEADILY DURING THE
SEASON WITH ENCOURAGING IMPROVEMENTS IN MILL PERFORMANCE BEING ACHIEVED.  THE
MAJORITY OF THE OPERATIONS RECORDED IMPROVED SUGAR RECOVERIES AND TIME
EFFICIENCIES.  AT BOTH PONGOLA AND UMFOLOZI RECORD PRODUCTION LEVELS WERE
ACHIEVED.  THE FURFURAL AND DIACETYL PLANTS CONTINUED TO PERFORM WELL WITH THE
FURFURAL PLANT ACHIEVING A 7% IMPROVEMENT IN AVERAGE WEEKLY PRODUCTION OUTPUT
OVER LAST SEASON.  THE LACTULOSE PLANT AT MEREBANK AND THE GLENDALE DISTILLERY
BOTH CONTINUE TO PERFORM WELL AND OUTPUT IS AHEAD OF FORECASTS.  THE MEREBANK
DISTILLERY, FOLLOWING THE RECENT CAPACITY EXPANSION, IS NOT YET ACHIEVING
DESIGN OBJECTIVES.

THE SUMMER RAINS ARRIVED LATE BUT SINCE THEN WE HAVE RECEIVED EXCELLENT FALLS
CONSIDERABLY BETTER THAN THE LONG TERM MEAN, AND NEXT SEASON'S SUGAR PRODUCTION
IS PREDICTED TO BE SIMILAR TO THAT ACHIEVED IN THE CURRENT YEAR.

WORLD SUGAR AND FURFURAL PRICES HAVE CONTINUED TO BE AT LOW LEVELS WITH THE
WORLD RAW SUGAR PRICE CURRENTLY AT US$120 PER TON.  THE ACTIVITIES OF BRAZIL
AND THAILAND ON THE SUPPLY SIDE AND RUSSIA AND CHINA ON THE DEMAND SIDE ARE
BEING WATCHED CLOSELY AS THE WORLD SUGAR PRICE IS UNLIKELY TO RECOVER

SIGNIFICANTLY UNTIL A BETTER MARKET EQUILIBRIUM IS ACHIEVED.

IN MALAWI EFFORTS TO EXTEND THE MILLING SEASON TO OFFSET THE LATE START WERE
THWARTED BY THE ONSET OF HEAVY SUMMER RAINS, WHICH BEGAN TO FALL IN MID
DECEMBER.  AS A RESULT, APPROXIMATELY 200 000 TONS OF CANE WILL BE CARRIED OVER
TO NEXT SEASON AND SUGAR PRODUCTION OF 187 000 TONS WAS 20 000 TONS LESS THAN
FORECAST.  DOMESTIC SUGAR DEMAND HAS BEEN WEAK, IN LINE WITH LOCAL ECONOMIC
CONDITIONS, AND INCENTIVE PROMOTIONS HAVE REDUCED MARGINS.  OUR CANE SUPPLY
AREAS HAVE ENJOYED FAVOURABLE GROWING CONDITIONS AND WE EXPECT A BUMPER CROP
NEXT YEAR.  THE FACTORY EXPANSION AT NCHALO IS PROGRESSING WELL AND IS PLANNED
TO BE COMMISSIONED IN TIME FOR THE NEW SEASON.  NEXT SEASON'S SUGAR PRODUCTION
IN MALAWI IS FORECAST TO BE 240 000 TONS WHICH REPRESENTS A TWELVE AND A HALF
PERCENT INCREASE OVER THE PREVIOUS RECORD.

THE UBOMBO MILL IN SWAZILAND HAS PERFORMED VERY WELL DURING THE CURRENT YEAR
FOLLOWING THE COMPLETION OF AN EXPANSION PROGRAMME.  SUGAR PRODUCTION FOR THE
1999/2000 SEASON OF 208 500 TONS IS 24 500 TONS GREATER THAN PREVIOUSLY
ACHIEVED WHILST CANE PRODUCTION INCREASED BY 95 000 TONS.  GOOD SUMMER RAINS,
HOWEVER, DID CAUSE DISRUPTIONS TO FACTORY AND FIELD OPERATIONS AND EXTENDED THE
SEASON.  THE SWAZILAND SUGAR INDUSTRY SHIPPED A QUANTITY OF SUGAR INTO THE
WORLD MARKET WHICH HAS IMPACTED ON THE AVERAGE PRICE RECEIVED.  PRODUCTION NEXT
SEASON IS EXPECTED TO INCREASE TO 225 000 TONS.

FOLLOWING LAST SEASON'S MAJOR DROUGHT, CURRENT GROWING CONDITIONS IN MAURITIUS
HAVE BEEN FAR BETTER WITH RAINFALL CLOSER TO NORMAL.  THE GOOD RAINS RECEIVED
DURING THE PAST FEW DAYS AS A RESULT OF CYCLONE CONNIE  PASSING CLOSE TO THE
ISLAND WERE MOST WELCOME.  PRESENT PREDICTIONS ARE THAT THE INDUSTRY CROP WILL
BE AROUND 90% OF NORMAL OUTPUT.  COMPANY PRODUCTION WAS 55 900 TONS IN
1999/2000 WHILST THE FORECAST FOR THE COMING SEASON IS 90 000 TONS.  THE TWO
HOTELS HAVE CONTINUED THEIR GOOD PERFORMANCE WITH INCREASED ROOM OCCUPANCIES
AND ROOM RATES.

THE RE-DEVELOPMENT OF FIELD AND FACTORY OPERATIONS AND INFRASTRUCTURE AT
KILOMBERO IN TANZANIA CONTINUES TO MAKE GOOD PROGRESS.  SUGAR PRODUCTION FOR
THE CURRENT SEASON IS STILL EXPECTED TO REACH 50 000 TONS WITH OUTPUT NEXT
SEASON RISING TO 63 000 TONS.

THE MARAGRA MILL IN MOZAMBIQUE HAS EXPERIENCED GOOD GROWING CONDITIONS AND WITH
THE CONTINUED RE-DEVELOPMENT OF THE FIELDS BY BOTH OUT-GROWERS AND THE COMPANY,
SUGAR PRODUCTION IS FORECAST TO REACH 30 000 TONS IN THE COMING SEASON,
SIGNIFICANTLY UP ON THIS SEASON'S ACHIEVEMENT OF 6 000 TONS.  THE COMPANY HAS
TAKEN OVER MANAGEMENT OF THE CORE ESTATE.

AT MONITOR IN THE UNITED STATES THE SUGAR CAMPAIGN COMMENCED AT THE END OF
OCTOBER WHICH WAS LATER THAN PLANNED FOLLOWING DAMAGE TO THE PLANT ARISING FROM
A MOLASSES TANK RUPTURE.  THE COMPANY HAD ADEQUATE PLANT AND BUSINESS

INTERRUPTION INSURANCE COVER FOR THE MISHAP.  THE PLANT IS PERFORMING WELL AND
THE NEW DESUGARISATION OPERATION IS EXCEEDING EXPECTATIONS.  SUGAR PRODUCTION
IS EXPECTED TO BE 168 000 TONS COMPARED TO 98 000 TONS IN 1999.  SUGAR PRICES
IN THE UNITED STATES ARE CURRENTLY HOVERING AT AN 18-YEAR LOW AND THIS IS
IMPACTING NEGATIVELY ON MARGINS.  PRICES FOR DOWNSTREAM PRODUCTS (BEET PULP,
CONCENTRATED MOLASSES SOLIDS AND BETAINE) ARE HOWEVER HIGHER THAN FORECAST.
OVERALL GROUP SUGAR PRODUCTION FOR NEXT SEASON IS EXPECTED TO EXCEED 2 MILLION
TONS WHICH IS AN IMPROVEMENT OF MORE THAN 150 000 TONS COMPARED TO THE CURRENT
YEAR.

THE FACTORY AND FIELD OFFCROP OPERATIONS ARE PROCEEDING ON SCHEDULE IN ALL
COUNTRIES AND MILL START-UPS FOR THE NEW SEASON ARE PLANNED TO COMMENCE AS
NORMAL FROM THE END OF MARCH ONWARDS.

THE RECENT DECLINE IN THE RAND COMPARED TO THE US$ WILL BENEFIT BOTH REVENUE
FROM OUR SOUTH AFRICAN EXPORTS OF SUGAR AND DOWNSTREAM PRODUCTS, AND THE
CONVERSION OF OUR OFF-SHORE PROFITS.

THE FINANCIAL YEAR END OF THE COMPANY HAS BEEN 30 SEPTEMBER WHICH IS IN LINE
WITH THAT OF ITS PARENT COMPANY CG SMITH.  FOLLOWING THE PROPOSED UNBUNDLING OF
CG SMITH, ILLOVO WILL CHANGE ITS FINANCIAL YEAR TO COINCIDE WITH THE SUGAR
SEASONS OF ITS OPERATIONS WHICH END IN MARCH OF EACH YEAR.  CONSEQUENTLY, THE
CURRENT FINANCIAL YEAR END OF THE COMPANY WILL BE FOR A SHORTENED PERIOD,
COVERING THE SIX MONTHS ENDING 31 MARCH 2000.  THE OPERATIONS IN SWAZILAND,
MALAWI AND MAURITIUS ALREADY HAVE MARCH YEAR ENDS AND WILL BE UNAFFECTED BY THE
CHANGE.

HEADLINE EARNINGS FOR THE 12 MONTH PERIOD ENDING 31 MARCH 2000 AS COMPARED TO
THE PREVIOUS YEAR ARE EXPECTED TO SHOW REAL GROWTH.  HOWEVER, GROWTH IN
HEADLINE EARNINGS PER SHARE WILL BE AFFECTED BY THE INCREASE IN THE AVERAGE
NUMBER OF SHARES IN ISSUE FOLLOWING THE ACQUISITION OF MONITOR SUGAR IN JULY
1999, BUT IS STILL EXPECTED TO BE POSITIVE.