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28 Nov 2007 12:00
AECI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number. 1924/002590/06)
Share code: AFEISIN: ZAE000000220CLOSURES AT SANS FIBRES
SANS Fibres (Pty) Limited (SANS) will be exiting from the nylon high decitex industrial (HDI), the polyester HDI and the polyester light decitex industrial (LDI) yarn manufacturing businesses by the end of December 2007.
The number of retrenchments, estimated to be about 850 people, as well as closure costs will be finalised once consultations have been concluded with all stakeholders including employees, customers and suppliers.
These SANS businesses have not been profitable for some time owing to several factors:
* over investment in polyester HDI and LDI yarn plants, mainly in the Far East, resulting in surplus capacity and very low prices; * the significantly lower cost base of manufacturers in the Far East; * the company's inability to recover increasing raw material costs, in full, from customers; * the decision by the company's predominant customer for nylon HDI to exit this business in South Africa; * the strength of the rand.
This highly competitive situation will not change as investment in capacity in the Far East is continuing.
It is in this context, and after failing to find a partner or owner which could add value to these components or to SANS's business as a whole, that the decisions on closures at Bellville were taken.
The nylon LDI and the PET plants will continue to operate normally whilst discussions with potential partners or purchasers for these businesses are pursued.
SANS is a wholly-owned subsidiary of AECI Limited.
Woodmead, Sandton28 November 2007Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
AECI LTD
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