OMNIA HOLDINGS ANNUAL REPORT 2011

Investment case

Bringing balance to life

Omnia is a diversified, specialist chemical and chemical services provider with business interests balanced across chemical, mining and agricultural markets. In a world of finite resources and compounding growth in the use of these resources, the Group is well positioned to provide high value, customised solutions to the producers of energy and commodities.

According to the US Census Bureau and the United Nations, the world population has almost doubled in the last 40 years from 3,6 billion in 1970, to just under 7 billion people in 2010. This acceleration has dramatically increased the demand placed on natural resources, and as these resources are finite, these levels of consumption are not sustainable.

The ever-increasing demand for resources is clearly illustrated by the change in the price structure of resources. Over a period of some 100 years, commodity prices have steadily declined but this changed dramatically in the past eight years, and we are now in a period of record commodity prices.

The Africa opportunity

The alternative energy opportunity

›	Long regarded as a developing continent beset by socio-economic and political challenges, Africa demonstrated resilience during the recent global recession. Many African economies continued to grow, offering attractive opportunities for long-term investment in the infrastructure, industrial and commercial sectors.

›	Underpinning this economic growth has been a commitment to legislative and regulatory reform and the implementation of investor-friendly policies to encourage direct foreign investment.

›	The continent continues to be a source of commodities and minerals required across the globe.

›	The preservation of water resources and their use in industry is becoming a focus of concern for African governments and business, who are cooperating in ventures to reduce pollution and wastage of this precious resource.

Omnia, with its expertise in mining and agriculture, is positioned to assist governments and producers in southern Africa to extract the opportunities and reap the benefits of nuclear energy and the promising field of biofuel production.

›	The search for alternative forms of energy continues, driven by a world whose over-reliance on crude oil has been tested by volatile economic conditions. This has led to volatile pricing for goods, services and transport.

›	Biofuels, producing energy from biomass waste, and renewed interest in the use of hydro, wind, solar, wave and nuclear power will inevitably come into their own as the world seeks sources for sustainable and renewable clean power.

The world today faces compounding problems associated with food security and insufficient global agricultural production, the dwindling availability of water resources and environmental change created by shifting global weather patterns. These problems are pitted against the need to drive global economic growth, particularly in developing countries. In an increasingly resource-strapped world, governments and businesses are focusing on finding sustainable solutions to these fundamental challenges.

Omnia is involved in food production through developing and marketing fertilizers and managing water resources through its chemicals business. Omnia is using its unrivalled expertise in Africa by implementing its business model focused on creating value for customers, positioning it as a strong partner in finding regional solutions for these pressing issues.

Omnia continues to enhance its core operations and make strategic acquisitions to strengthen its unique position in Africa in relation to these critical global challenges.

The mining opportunity

The agricultural opportunity

As a leading supplier of explosives and mining chemicals, Omnia is highly regarded for its expertise in assisting mines with locally developed solutions that enhance safety and productivity in recovering and processing essential commodities.

Strategically positioned as a leading supplier of fertilizer and agronomic expertise, Omnia’s holistic and specialist offerings contribute to sustainable food production through the intensification of agriculture, as well as reduced rural poverty and sound environmental practices in farming.

›	Africa has vast mineral resources, ranging from gold, platinum, coal and copper to nickel, iron ore and uranium. Unlocking this mineral wealth is vital to the continued prosperity of developed countries as well as the world’s emerging economic giants, China and India.

›	Despite recent volatility in the demand and prices for key commodities, the African mining industry will retain its importance as a regional and global supplier of mineral resources.

›	As nations work to meet spiralling demand for energy, the mining industry will continue to benefit from increasing global demand for coal. South Africa, with its massive resources of coal suitable for use in power generation and industrial furnaces, is well positioned to benefit.

›	The key role that nuclear energy will play in providing energy will favour southern Africa, which is a major source of uranium.

›	Less land available internationally for agriculture, increasing populations, dietary changes, increased urbanisation and changing weather patterns have resulted in global demand for cereal crops exceeding supply, resulting in rising prices and food inflation.

›	Against this background, increasing agricultural yields and the productive use of farmland has become an international focus.

›	Private Public Partnerships and the participation of non-governmental organisations in finding solutions to food security challenges and creating sustainable agricultural models will play an increasingly important role in reforming present farming practices and assisting emerging farmers in developing sustainable commercial farming enterprises.

As a Group, Omnia is balanced across the sectors that are essential to the sustainable use of the world’s finite resources. The Group has a key future role to play in South Africa and across the African continent. With our knowledge and expertise in the chemicals, mining and agriculture markets, we create customer wealth by leveraging our knowledge.