Tongaat Hulett Limited · JSE:TON
Tongaat Hulett — Non-Deal Roadshow (January 2011)
24 slides from Tongaat Hulett's roadshow presentation, January 2011
Slide 1: January 2011
JANUARY 2011 6 = =e ~_ S S > 3 ie Bho ae” ine Cr iene) WP othe Se Agee totals ak eee |
Slide 2: An integrated Agriculture and Agri-processing Business
An integrated Agriculture and Agri-processing Business • > 42 000 Employees • Operations in 6 countries in SADC F&I Harare • Sugar - 14 operations ZIMBABWE M Mafambisse O NAMIBIA ZA Triangle Beira • M Maize/corn - 6 operations CSI Hippo Valley B IQ BOTSWANA U E • Market Capitalisation - R11 billion
Slide 3: Profit from Tongaat Hulett Operations
Profit from Tongaat Hulett Operations R million - 12 Months 1500 1132 838 726 550 323 150 2003 2004 2005 2006 2007 2008 2010 December March (12 months) Interim Results Profit from Operations Headline Earnings Half-year ended 30 September Half-year ended 30 September 2010 2009 2010 2009 R million 963
Slide 4: Grow Sugar Production Using Existing Milling Capacity
Grow Sugar Production Using Existing Milling Capacity Additional 1 Million Tons Sugar Indicative Minimum Revenue Gap > R3,3 billion p.a. “Mills Full” Sugar Production Previously at Capacity Achieved (Year) South Africa 1 000 000 969 000 (2001) Zimbabwe 600 000 580 000 (2002) Mozambique 327 000 - Rep
Slide 5: Efficient Electricity Generation
Efficient Electricity Generation From Fibre in Sugar Cane All Tongaat Hulett Mills - Full Generating capacity (MW) 350 Additional Revenue - Electricity 2,7 (Rand billion) Investment (Rand billion) 8,9 Annual running costs (Rand million) 161 5
Slide 6: Ethanol From Sugar Cane
Ethanol From Sugar Cane Working towards • SADC introducing a workable ethanol regime as a CO2 mitigation strategy 10% ethanol blend • Equivalent to 2,2 million tons raw sugar • Current South African sugar market is 1,7* million tons • Existing Northern SADC sugar capacity is 2,2 million tons * Inclu
Slide 7: Value Extraction from Land under Sugar Cane
Value Extraction from Land under Sugar Cane Last 12 Years: 2 600 hectares Developable Hectares: 8 763 in SA Converted to Development Net Cash Inflow (including overheads) • Cornubia • R700 000 per developable hectare • Bulk deal for low cost housing • Ridgeside development • R9,9 million per develop
Slide 8: Interchangeability of maize/corn and sugar cane
Tongaat Hulett Interchangeability of maize/corn and sugar cane • Tongaat Hulett processes 600 000 tons of maize per annum - starch and glucose • Turnover from animal feeds - R1,1 billion per annum • Huletts consistently rated as the leading sugar brand in South Africa 8
Slide 9: Zimbabwe and Mozambique - Sugar Production
Zimbabwe and Mozambique - Sugar Production 2009/10 2010/11 Actual 2011/12 2011/12 Milling Sugar production (tons) Actual (% Increase) Estimate Nov* Jan 2011 Estimate Capacity Zimbabwe 258 965 333 020 (29%) 380 000 - 400 000 360 000 - 380 000 > 600 000 Mozambique 133 802 165 744 (24%) 270 000 - 290 0
Slide 10: Hectares Supplying our Mills - Harvested
Hectares Supplying our Mills - Harvested 2010/2011 2011/2012 2010/2011 Indicative Target Actual Hectares Jan 2011 Estimate Estimate Nov # (Year) Harvested (% change) Mozambique Tongaat Hulett 18 330 17 904 20 380 (14%) 21 496 (2013/14) Outgrowers 3 890 3 809 4 305 (13%) 5 304 (2013/14) Total 22 220
Slide 11: Growing Cane Supply - Yields
Growing Cane Supply - Yields Harvested Cane Harvested Cane Hectares to be Tons Cane Indicative Target 2010/2011 2010/2011 harvested 2011/2012 per Hectare (Year) Estimate Nov ^ Actual Yields Jan 2011 Estimate Mozambique Tongaat Hulett 94# 88# 100# > 107# (2013/14) Outgrowers 86 86 93 > 107 (2013/14)
Slide 12: South Africa
South Africa • Sugar Industry Regulatory Framework COFIT/REFIT Price (SA Rands) cent/kWh • To change Return on Capital 55 • Indicative electricity price for cane Operating cost (indicative) 9 is imminent Fuel (bagasse) 110 • Integrated Resource Plan (IRP 2010) for electricity to be finalised by Marc
Slide 13: South Africa - Increasing Cane Supplies
South Africa - Increasing Cane Supplies Private Public Partnerships New Sugar Cane September 2010 - Planting March 2011 • 3 534 hectares over 3 years - government R51 million Small scale growers 3 216 • 17 000 gross hectares Commercial growers 691 • Tongaat Hulett identified as the strategic partner
Slide 14: Hectares Supplying our Mills
Hectares Supplying our Mills 2009/2010 835 000 Tons South Africa (564 000 tons) Sugar* Small scale growers 21 996 29 963 Commercial growers 94 688 97 704 Tongaat Hulett leased land 6 145 10 155 Tongaat Hulett owned land 7 765 7 725 Total hectares under cane 130 594 145 547 Total hectares harvested 1
Slide 15: Raw Sugar Flows - Tongaat Hulett
Raw Sugar Flows - Tongaat Hulett Indicative 2010/2011 Estimate 2 million tons ^ South Africa - effective sugar regime Local market 365 000 tons at 29 c/lb 500 000 # Exports - World market 81 000 tons at 19 c/lb - EU 500 000 - Ethanol - Mozambique and Zimbabwe Regional market 295 000 tons 433 000 Exp
Slide 16: Reducing the Unit Cost of Sugar Production
Reducing the Unit Cost of Sugar Production • Milling and indirect overheads • > 92% of costs fixed (not related to volume) • Harvesting and delivery of cane to the mill • Average cost based on 15 km haul - 2,3 USc/lb • Farming (input costs per hectare) • Fertiliser/chemicals, manpower, equipment and
Slide 17: Cane Land in KZN Targeted for Property Development
Cane Land in KZN Targeted for Property Development Total of 13 807 ha (8 763 developable ha) • eThekwini growth corridor s km 7 420 gross ha (4 333 developable ha) 16 • Coastal corridor / outside eThekwini 6 387 gross ha (4 430 developable ha) Value benchmarks: Net cash inflow (including overheads)
Slide 18: Zinkwazi / Thukela and Tinley Manor
Zinkwazi / Thukela • Gross hectares - 2 352 • Developable heactares - 1 459 Tinley Manor • Gross hectares - 1 042 • Developable heactares - 882 18
Slide 19: Industrial Land Ethekwini / Ballito In Short Supply
Imbonini Industrial Land Mid 2011 Compensation Flats Early 2012 320 35 Ethekwini / Ballito Inyaninga In Short Supply Mid 2012 280 90 uShukela – mid 2012 Canelands 105 DTP 5 Cornubia End 2011 86 250 ? Cato Ridge 65 RiverHorse Hammarsdale 70 Mahogany 15 Pinetown Ridge Umgeni River Node DEVELOPED AREAS
Slide 20: Inyaninga R1 Airport Inner Ring
Airport cities - “Even in today’s rocky economic times, airports and their immediate environments Airport Inner Ring are becoming 21st century commercial anchors, Tongaat Hulett Landholding taking on many features of destination retail 2 515 Gross hectares and urban centers.” Existing rail 1 517 Dev
Slide 21: Inyaninga: Bulk Land Sale / TH Development / Partnership
Inyaninga: Bulk Land Sale / TH Development / Partnership Gross hectares : 707 Developable hectares : 550 Yes? R6,3 million per developable hectare R3,465 billion Maybe? R4,4 million per developable hectare R2,420 billion No? 21
Slide 22: Cornubia
Cornubia CORNUBIA Cornubia South Boundary NORTH Cornubia North Tongaat Hulett landholdings CORNUBIA Land already purchased by eTM SOUTH SIBAYA 517 ha Gross - 253 Developable ha R725 000/Developable ha Land Purchased by eTM - Oct 2010 34,6 ha Gross - 25 ha Developable R725 000/Developable ha IZINGA M
Slide 23: Maize/Corn Production in SADC Poised for Growth
Maize/Corn Production in SADC Poised for Growth • Products from cane or maize • Ethanol • Sweeteners • Fermentation products (beer) • Tongaat Hulett only maize wet miller in Southern Africa • World maize price • Last 15 years US$80 - US$100 / ton • Recent price: US$220 - US$250 per ton • Starch and
Slide 24: Tongaat Hulett is one of the few agricultural and agri-businesses in sub Saharan Africa
Tongaat Hulett is one of the few agricultural and agri-businesses in sub Saharan Africa that has the capability, capacity and track record to make it happen 24