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TWST: Can we begin with an introduction and historical overview of AVI Group (AVIJ.J)?

Mr. Band: AVI was part of a big South African conglomerate called Anglovaal. It was initially a mining company with a broadly based set of operations in gold, nickel, etc and went on to build up an industrial empire starting from about 1944, ultimately owning interest in virtually every sector of the industrial economy ranging from information technology to financial services to food. The group experienced some difficulties in the 1990’s with some ageing management, the opening up of the South African economy, and we hadn’t reinvested in all our facilities as we should have. A decision was therefore taken by the controlling shareholders to break Anglovaal into a separate mining company and an industrial company. Then, in 1999 the industrial company was split further into a construction and engineering company which is called Aveng. That was floated off separately in 1999 while the consumer businesses were left in AVI. We now comprise essentially a food business called National Brands, which is a grocery company including tea, coffee, biscuits and salty snacks. We also have National Brands cosmetics,, which manufactures and markets a range of mass market fragrances, color cosmetics and toiletries. We have a branded seafoods subsidiary called Irvin & Johnson, which is an integrated seafoods business from catching fish -- we have a fleet of about 33 trawlers -- through to marketing, primarily into Europe but increasingly also America and the Far East. We also own South Africa’s largest glass packaging business called Consol which has about 80% of the glass container market in South Africa and also a small plastics business. Then, lastly we have a frozen and chilled logistics business called Vector, which is the largest company of that nature in this country

TWST: From a corporate structure perspective, are these various business units operating autonomously or are there basic synergies that tie it all together?

Mr. Band: We run according to a very decentralized philosophy, so each of those businesses is completely autonomous. In recent years, we have started to look for back office synergies in particular in the area of IT. We have stripped out all of the IT service provision and established a central IT facility called A Vision which provides a group resource. Other than that, it is not our intention to look at centralizing back office. I think we would lose a lot more focus than we would actually save through cost reduction.

TWST: What is your overall strategy for the 12 to 24 months and what objectives will you need to accomplish for that to be a successful time period for AVI?

Mr. Band: Just to define the group as a whole, we see ourselves as a consumer products and services group with the core purpose to provide enjoyment to people through the supply of branded added value products and services. In our businesses in South Africa, we are market leaders in every category that we play in and therefore to some extent our growth domestically is limited to innovation, organic growth and GDP growth. The real thrust is an acquisitive strategy now. We are a strongly cash generative business. We are sitting with a completely ungeared balance sheet and we are looking to grow into the area of branded consumer products. We have recently made a small acquisition into beverages. We see that as a platform from which we can grow our beverage business and we would hope within that particular area to have within two to three years a R400 million to R500 million entry point into beverages. We are also looking to grow our whitefish business internationally. I have just mentioned the acquisition in Argentina. That’s something we would look to expand upon further. And we are looking to significant export growth in particular in our grocery products out of National Brands. In our glass business, which we haven’t touched on, we have seen very strong growth from indirect exports in the form particularly of wine from South Africa. That has been a very strong growth point for us over the last three years. Wine exports have been growing at about 40% and South Africa is increasing its presence in the European market off a small base and we think that will continue to offer Consol very good growth going forward. We also have a pretty unique situation in South Africa where a lot of beer and carbonated soft drinks are still sold in returnable bottles and there is a lot of replenishment of that returnable bottle float taking place, which is also giving us good growth. Therefore, we see good growth opportunities across each of our business units but we do need to find a material acquisition to really give us what I would call a defining transaction going forward.