Strategic Positioning of operations and activities

INTERNATIONAL FOOTPRINT AND AECI’S MODEL

VISION

AECI’s vision is to be the supplier of choice for customers in its chosen markets. The Group aims to be Africa’s leading supplier of explosives and mining services and specialty chemicals, mainly to the mining and manufacturing sectors across the continent and in key emerging markets around the world.

The broad spectrum of industries served is illustrated in the Company Profile graphs.

The map (above) illustrates the Group’s geographic reach and aspirations.

FRAMEWORK

The Company’s vision is underpinned by four strategic pillars pertaining to a globally competitive cost base, world-class technology, value-adding customer-centric service, and excellence and professionalism in all areas of activity. Growth is achieved organically and via acquisitions. These pillars in turn reflect AECI’s foundational principles of being Bold and Innovative in the creation of value, of Going Green and of being Engaged and Responsible.

The model in place for AECI is summarised as “Freedom supported by a Framework”, with the framework established by the parent company complementing the businesses’ pursuit of their own innovative product and service excellence. The model is represented schematically above.

As detailed in the Chief Executive’s Report , restructuring and other initiatives to ensure the best possible cost base have been undertaken and the Group is now set for the next phase of its growth programme, namely that of regional expansion.

GROWTH STRATEGY

Regional expansion will leverage AEL’s already extensive footprint in Africa, South East Asia and South America. AEL aims to expand further in these territories.

In the specialty chemicals cluster, regional growth is being pursued in Africa in key markets that include the mining chemicals, water, oil, gas and energy sectors. Businesses will expand their areas of influence by partnering their customers as they grow and by maximising the benefit of technology alliances. In this regard ImproChem’s new distribution agreement with GE Betz is a noteworthy example which is discussed in more detail in the Operational Review.

The specialty chemicals cluster already has a joint venture business in Brazil. Further acquisitions that are in line with the Group’s risk/reward appetite will be pursued in that and other geographies.

Early in 2012 AECI’s Executive Committee was restructured to ensure that adequate resources are in place at the highest level to enable the achievement of the growth strategy. More detail is given in the Chief Executive’s Report.