Investment Proposition

ADDING VALUE IN A CHANGING LANDSCAPE

The global economic landscape is undergoing fundamental changes. While the shifting dynamics present major challenges and risks for countries and companies around the world, there are also unprecedented opportunities.

Key dynamics include the shift in the balance of purchasing power from developed to emerging markets and, similarly, the footprint of manufacturing and supply. Other dynamics include the growing demand for metals and mineral commodities, spiralling oil prices, changing dietary patterns and escalating food prices, as well as the growth in biofuel production in reaction to climate change and related regulatory issues. Spurred by globalisation, there is an increasingly close interplay between many of these factors.

As a specialised chemicals services group operating in the burgeoning markets of chemicals, mining and agriculture, Omnia is uniquely positioned to benefit from the opportunities in this rapidly-changing landscape.

THE OPPORTUNITY IN ENERGY

Global energy security is uncertain. Record-high crude oil prices as well as political instability and changes in the world’s oil-rich regions have increased the focus on coal, nuclear energy and biofuels.

Global consumption of coal has grown 30% in the past six years, twice as much as any other energy source. This trend seems set to continue – while China has extensive coal reserves, demand is starting to outstrip supply.

Similarly, it is expected that uranium demand will more than double by 2030 as increasing numbers of countries turn to nuclear energy for their power requirements. While nuclear power is not considered renewable, there is no combustion involved and consequently there are zero carbon emissions. This makes it desirable in areas with limitations on greenhouse gas emissions. Mining industries in the southern African region are set to benefit from escalating local and global demand for uranium and coal.

Increasingly, biofuels are being viewed as a viable energy source, with an estimated 100 million tons of grain globally being redirected from food to fuel in 2007. Southern Africa is missing out on a golden opportunity to utilise plentiful arable land for biofuel crop production, without reducing food crop production.

THE OPPORTUNITY IN MINING

Yet another dynamic in the changing global landscape is the seemingly insatiable demand for commodities from India and China. In the six months to mid-March 2008, gold climbed 9,5% to over $1 000/oz, platinum surged 47% in the same period and copper hit a record high of $4/lb. These developments are highly positive for southern Africa, given South Africa’s extensive gold and platinum reserves and the fact that Zambia is Africa’s largest copper producer. Investment into these countries has risen, helping to sustain economic growth on the continent which the African Development Bank expects to reach 5,9% this year, exceeding 5% for the fifth consecutive year. Omnia is well placed to service this mining growth through its value added mining explosives and chemicals offerings.

THE OPPORTUNITY IN AGRICULTURE

World Bank data shows that overall food prices have risen 83% in three years. Since March 2006, the price of yellow maize used to feed livestock has nearly doubled. Wheat recently broke through the $400 a ton barrier. The price of rice, a major staple crop, recently increased to a record high of $760 a ton.

It is accepted that the spike in food prices has the most profound impact on the poor, many of whom spend more than half their income on food. The world’s development agencies agree that there is a real need to foster growth and development in poor countries and to assist in developing their agriculture supply base. A high-level UN task team has recommended a number of steps to boost food production including the provision of key inputs such as seeds and fertilizer.

Both the World Bank and UN agencies have pointed to the fact that, with sufficient help, Africa has the opportunity to become a significant contributor in addressing the global food crisis. Fertilizer use in Africa, at around eight kilograms per hectare, is currently the world’s lowest. Clearly, increased use of fertilizer together with Omnia’s applied agronomic expertise could help to promote food security and alleviate hunger and rural poverty.

OMNIA – POSITIONED FOR SUSTAINABLE GROWTH

Omnia is uniquely positioned to take advantage of the changing global landscape. With our expertise and experience in increasing crop yields, we can add value to the agricultural sector and create an enabling environment for sustainable growth and food security. With our mining explosives, blasting technologies and mining chemicals we can contribute to enhancing energy security and expanding the mining sector. With our broad chemical footprint and range of polymer products we can supply to the manufacturing and retail industries and help drive the infrastructural growth so important for economic development.

The ways in which we are driving sustainable growth and development in our markets are detailed in this annual report. We have attempted throughout to give our readers a broader perspective to contextualise our activities and future plans.

The changing landscape holds many opportunities and many challenges. Throughout our long history, Omnia has always welcomed new challenges.

We have the capacity and the determination – and most importantly – we have the people to add value to all our stakeholders in this changing global landscape.