Conclusion

The Group remains well placed for future growth as a leading supplier of specialty products and services, mainly to the mining and manufacturing sectors. Although 2007 was a challenging year in several respects, the significant capital investment projects in progress bear testimony to the confidence that management has in its core businesses. These projects, representing about R1.4 billion in investment over two years, will begin making a significant contribution to the Group's fortunes in 2009.

In 2007 the Dulux business, not aligned with AECI's long-term strategy, was sold. Non-sustainable businesses in SANS Fibres were closed and new owners are being sought for the balance. These transactions are in line with AECI's focus on strengthening its position in its chosen markets and exploiting this for expansion in South Africa, Africa and in countries where the Group has not operated in the past.

AECI is fortunate in having a substantial land holding in its portfolio. Shareholder value from realising this asset has been evident in recent years and the benefits from these activities will continue to accrue over the next 10 to 15 years.

After five years as chief executive of AECI, I will retire from this position on 1 March 2008. I look forward to continuing my participation in the Group's future in my new role as a non-executive director. I thank my fellow directors, management and all of the Group's employees for the support that I have always received from them.

Schalk Engelbrecht
Chief executive

Sandton, 25 February 2008