August 22, 2003

Yates Ltd announces that agreements have been signed today for the sale of its Yates Vegetable Seeds (YVS) business in Australia and New Zealand to a consortium of South Pacific Seeds Pty Ltd (SPS) and Enza Zaden B.V.

SPS is a privately owned, Australian based, vegetable seed company specialising in seed production and wholesale distribution.  Enza Zaden B.V. is a privately owned Netherlands based company that specialises in vegetable seed breeding.

The sale price includes a premium to the assets being purchased, and is conditional upon any regulatory approvals.  It is anticipated that the sale will be completed mid September 2003.  All staff currently employed in the YVS business will be offered positions with the ongoing businesses.  Proceeds from the sale will be used to retire debt.

Yates Ltd Managing Director, David Marginson, commented “the Board is pleased that YVS is being acquired by internationally recognised vegetable seed companies that will bring significant resources to the strong YVS team.” 

Phil Hancock, Managing Director of SPS said that “YVS as a strong recognised player in this market will complement SPS’s existing business.  SPS propose to operate the YVS business as a separate company with its own Board of directors in line with SPS’s philosophy of having each company as a stand alone entity competing in the market place.”

Roland Peerenboom, Commercial Director of Enza Zaden BV, commented that “YVS breeding programs would complement our existing programs and allow Enza Zaden to expand their southern hemisphere breeding capabilities.”

This sale is in line with Yates’ previously stated strategy.  It follows advice to the market that Yates has signed conditional sale agreements for the sale of the majority of its Forestry business and the sale of its consumer lawn and garden business to Scotts (Australia) Pty Ltd.

About Yates

Yates is the leading consumer gardening and commercial horticultural branded goods company in Australia and New Zealand.  It markets and distributes a range of branded horticultural products through its Yates Consumer and Yates Commercial divisions.  Established in 1883, Yates has one of the most highly recognised brands in Australia and is a respected leader in both the Australian and New Zealand gardening and horticultural markets.  Yates’s headquarters are in Sydney and it has operations throughout Australasia.

About SPS

SPS was founded in 1986 by a group of experienced vegetable seed specialists and has developed into a major supplier of vegetable seed to the industry in Australia and New Zealand.  Apart from seed distribution the company has focused on contract seed production, producing seed for the majority of the world’s leading vegetable breeding companies.

About Enza Zaden

Enza Zaden is an independent vegetable seed breeding company with its head office in Enkhuizen, The Netherlands.  Enza Zaden has breeding in more than 18 species, the main ones being tomato, cucumber, sweet pepper and leafy vegetables.  The company has research and development facilities in Holland, France, Germany, Spain, Italy, Turkey, the United States and through a joint venture in Indonesia. The company's commercial offices are in England, Holland, Germany, France, Spain, Italy, Poland, Bulgaria and the United States.  Enza Zaden is also involved in the development and marketing of organic vegetable seeds through their joint venture company Vitalis. Enza Zaden employs more than 500 employees worldwide.

Dear Customer

The Board of Yates Ltd announced on 22 August that they have agreed to the sale of Yates Vegetable Seeds (YVS) in Australia and New Zealand to a consortium of South Pacific Seeds Pty Ltd (SPS) and Enza Zaden BV (Enza Zaden).   This sale, which is subject to regulatory approvals, is anticipated to be effective from mid September 2003.  All the current YVS staff will be offered employment by the acquiring companies.

SPS has informed Yates that they will manage YVS as a separate company reporting to a separate Board of Directors.  Warrick Chudleigh will continue as the Manager of YVS and will sit on the Board.  SPS have indicated that they see YVS as being run distinctly separately to their existing businesses, which will remain competitors of SPS.

Separately Enza Zaden, as one of the world’s foremost breeding companies, will be acquiring the current vegetable breeding operations of YVS.  However, there will remain a strong link between Enza Zaden and YVS which will ensure that current and future YVS research breeding programs continue to be exclusively marketed by YVS for the Australasian markets. For our export markets all orders and deliveries will continue to be done as it is now by YVS. However the overall responsibility for the further development of the export markets of The YVS breeding programs will transfer to the export department of Enza Zaden in the Netherlands. In most cases our export customers already do business with Enza Zaden. We will be meeting with them in early September after which I will be able to update you further.

Advantages to customers

By transferring our existing breeding effort, with the same staff, to Enza Zaden we are significantly enhancing the resources and expertise to strengthen the YVS breeding programs. This in turn should increase your potential opportunities for these products in your market.

Next Steps

Following the sale in mid September we will continue trading under a new name and our managers will discuss with you any changes that may be necessary.   However, until you hear otherwise business remains the same at YVS.  I would like to also thank you for your support as YVS moves forward into its next exciting phase of growth and development.

Warrick Chudleigh
General Manager, YVS