ASTRAL FOODS LIMITED - Voluntary announcement

Voluntary announcement

ASTRAL FOODS LIMITED
“Astral Foods”
(Reg. No. 1978/003194/06)
(Incorporated in the Republic of South Africa)
Share Code: ARL
ISIN Code: ZAE000029757

VOLUNTARY ANNOUNCEMENT

Astral Foods has entered into a long term supply agreement with
Quantum Foods Proprietary Limited (Quantum), subject to certain
suspensive conditions that are required to be fulfilled by 15
May 2014.   Quantum, a company within the Pioneer Food Group,
will supply Astral Foods’ County Fair abattoir in the Western
Cape with approximately 550 000 broilers per week.

The tough market conditions over the past two to three years
have resulted in a tremendous margin squeeze on poultry
producers, which has led to numerous poultry business closures
and subsequent industry consolidation. Under these conditions,
exploratory talks between Astral Foods and Quantum commenced
and an opportunity to preserve primary poultry production,
processing and distribution in the Western Cape region was
identified.

The agreement will see Quantum maintaining their breeding
operations as well as the rearing of broilers, with Astral
Foods purchasing the broilers from Quantum for further
processing, distributing and marketing. Astral Foods will have
to increase capacity at its County Fair operation to
accommodate the additional broilers and, to this end, will
invest approximately R80 million in expanding its facilities
and will thereby be creating a significant number of new jobs
at County Fair.

The   agreement  will   be  fully  implemented   following  the
suspensive conditions being met, and the completion of the
expansion of the facilities at County Fair which is expected to
take approximately five months.    Astral Foods’ total broiler
processing capacity will increase to approximately 5 million
birds per week and it is expected that the project will deliver
good value to all stakeholders.
Pretoria
3 April 2014

Sponsor
JP Morgan Equities South Africa (Pty) Limited

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