Acquisition & Trading Update

Elementis PLC
22 April 2004


                                                                   22 April 2004

             
                          Elementis plc ('Elementis')

 Proposed acquisition of Sasol Servo B.V. ('Servo') and current trading update

Highlights

• Elementis, through a wholly owned subsidiary, has entered into an
  agreement with a wholly owned subsidiary of Sasol Limited to acquire, on a
  debt-free and cash-free basis, the entire issued share capital of Servo for a
  purchase price of approximately €48.5 million in cash.

• Elementis will also benefit from net proceeds of approximately  €4.25 million 
  due to Servo from the unwinding of an historical joint venture which will 
  occur at the same time as completion of the Acquisition.

• The Directors believe that the Acquisition should accelerate future
  revenue and earnings growth in Elementis Specialties and will be earnings
  enhancing for the Elementis Group from the date of Completion(1) before any
  benefit from synergies.

• The complementary nature of Servo's businesses with Elementis
  Specialties' existing rheology and surface chemical additives business will
  broaden the range and performance characteristics of Elementis Specialties'
  product offering and extend its innovation capabilities.

• The Acquisition will be funded in cash from Elementis' existing
  committed multi-currency revolving credit facility.

• For the year ended 30 June 2003, the Servo Group had turnover of
  €107.9 million (2002: €122.0 million) and EBITDA of €8.6 million 
  (2002: €6.6 million).

• Elementis currently anticipates that first half results for 2004 will
  show higher US dollar sales but that operating profit will be significantly
  impacted by volume and product mix pressures in Elementis Chromium and
  inflationary cost pressures and the effect of a weaker Euro against Sterling,
  across all businesses. Given current market trends it is anticipated that an
  improvement in operating profit performance is likely to be evident in the
  second half.

The Acquisition is conditional, amongst other things, on the approval of
Elementis' Ordinary Shareholders. A circular and notice convening an
extraordinary general meeting will be posted to Ordinary Shareholders shortly.

Geoff Gaywood, Chief Executive of Elementis, commented:

'Acquisition is a key element of our growth strategy for Elementis Specialties.
The acquisition of Servo will broaden the range of products offered to existing
markets, open access to new markets, expand manufacturing capabilities and
considerably extend the range of technologies available to accelerate
innovation. This is a deal with considerable upside potential for Elementis.'

Commenting on the sale, Pieter Cox, deputy chairman and chief executive of
Sasol, said:

'This transaction is consistent with our stated commitment to divest of any
non-core chemical assets at values that reflect the interests of our
shareholders. This disposal will assist Sasol in focusing on areas where we can
add the most value to our shareholders.'

Elementis is hosting an analyst and investor presentation via conference call to
discuss the Acquisition at 08:30 (British Summer Time) today. The dial in number
for the conference call is [phone]. The presentation will be
available on www.elementis.com.

(1) Ordinary Shareholders should not infer from this statement that earnings
will necessarily be greater for the Company in the current financial year than
during the last financial year.

Enquiries:

Elementis plc - 01784 227000
Geoff Gaywood (Group Chief Executive)
Brian Taylorson (Group Finance Director)
Hilary Reid Evans (Head of Investor Relations and Corporate Communications)

Deutsche Bank AG London - 020 7545 8000
Jeremy Lucas
Martin Copeland

Cazenove & Co. Ltd - 020 7588 2828
Malcolm Moir

Hoare Govett Limited - 020 7678 8000
Andrew Chapman

Brunswick Group LLP - 020 7404 5959
Andrew Fenwick
Wendel Carson


Deutsche Bank, which is regulated by the Financial Services Authority for the
conduct of designated investment business in the UK, is acting exclusively for
Elementis plc and for no one else in connection with the Acquisition and will
not be responsible to anyone other than Elementis plc for providing the
protections afforded to customers of Deutsche Bank or for providing advice in
relation to the Acquisition.

Cazenove & Co. Ltd and Hoare Govett Limited, which are regulated in the United
Kingdom by the Financial Services Authority are acting as brokers to Elementis
plc and no one else in connection with the Acquisition and will not be
responsible to anyone other than Elementis plc for providing the protections
afforded to clients of Cazenove & Co. Ltd and Hoare Govett Limited or for
providing advice in relation to the Acquisition.
This summary should be read in conjunction with the full text of the attached
press release.

                                                                   22 April 2004

                          Elementis plc ('Elementis')

 Proposed acquisition of Sasol Servo B.V. ('Servo') and current trading update

Introduction

The Directors of Elementis today announce that Elementis B.V., a wholly owned
subsidiary of Elementis, has entered into an agreement with Sasol Surfactants, a
wholly owned subsidiary of Sasol Limited, to acquire, on a debt-free and
cash-free basis, the entire issued share capital of Servo for a purchase price
of approximately €48.5 million in cash. In addition, Elementis will benefit from
net proceeds of approximately €4.25 million due to Servo from the unwinding of
an historical joint venture.

In view of the relative size of Servo by comparison to Elementis the Acquisition
is conditional, amongst other things, on the approval of Elementis' Ordinary
Shareholders. A circular and notice convening an extraordinary general meeting
will be posted to Ordinary Shareholders shortly.

Strategic rationale for the Acquisition

Elementis is a global specialty chemicals company comprising four separate
businesses: Elementis Specialties, Elementis Pigments, Elementis Chromium and
Elementis Specialty Rubber (Linatex). In total, Elementis employs more than
2,000 people at over 40 sites in North America, Europe, the Asia Pacific region
and Africa.

Elementis' stated growth strategy is to transform its business into a leading
global specialty chemicals company. To achieve this goal, the Elementis
management team is targeting four key strategic objectives: achieving step
change improvement in financial performance; maintaining and building on sector
leadership in the respective businesses' target markets; capturing
inter-business synergies to achieve top quartile excellence in all operations
and processes; and the expansion of technology platforms to drive growth.

In addition, particular emphasis has been placed on targeting selective
acquisitions to complement and generate synergies with the product portfolio and
operations of Elementis Specialties.

Having identified the Acquisition as a key strategic opportunity for Elementis
Specialties, the Directors believe that it will represent a significant step
towards Elementis' goal of becoming a leading global specialty chemicals
company.

The key reasons for recommending the Acquisition are:

• that the Directors believe the Acquisition should accelerate future
  revenue and earnings growth in Elementis Specialties;

• the complementary nature of Servo with Elementis Specialties' existing
  rheology and surface chemical additives business, which will broaden the range
  and performance characteristics of Elementis Specialties' product offering to
  its customers;

• the provision of an important new product and knowledge base in the
  area of surfactant development and manufacture to Elementis Specialties which
  the Directors anticipate will be beneficial to Elementis Specialties' 
  innovation capabilities;

• the addition of Servo's well-invested and versatile manufacturing
  facilities in Delden, The Netherlands, which are not currently fully utilised,
  will augment the capacity and flexibility of Elementis' European manufacturing
  capability;

• that the Directors believe the Acquisition will be earnings enhancing
  for the Elementis Group from the date of Completion(2) before any benefit from
  synergies; and

• that the Directors believe that combining Servo with Elementis'
  existing businesses will create further benefits for the Enlarged Group
  including:

• the provision of a broader product offering to existing customers and
  customers in new markets;

• stable long term manufacturing arrangements, particularly in oilfield
  chemicals;

• a broader innovation platform;

• cost savings from reorganisation and rationalisation across the
  Enlarged Group; and

• raw material cost savings through purchasing in greater scale.

Summary information on Servo

Servo has strong European market positions in coatings additives and is a
leading manufacturer in the field of specialty surfactants. Servo was founded in
1926 in Delden, The Netherlands where it has its headquarters and primary
manufacturing site. Servo also has operations at Plainsfield, New Jersey, USA
and in Mexico and Italy through its associated companies.

Servo is owned by Sasol Surfactants having been acquired by Sasol as part of its
acquisition of RWE-Dea's chemicals business in February 2001. However, Sasol has
determined that, as a primarily specialty chemicals focused business, Servo is
not core to Sasol's more commodity focused surfactants business.

For the year ended 30 June 2003, the Servo Group had turnover of €107.9 million
(2002: €122.0 million), EBITDA of €8.6 million (2002: €6.6 million) and net
assets of €27.3 million (2002: €27.0 million)(3).

Servo has three core business areas: coating additives, chemicals and specialty
surfactants (including oilfield chemicals) and pulp and paper chemicals.

Coating additives

Servo's coating additives business manufactures a range of more than 65 products
for the coatings industry including dispersing agents, thickeners, antifoamers,
paint driers and antiskinning agents. In particular, Servo's coating additives
business focuses on the water-based architectural coatings segment. These
products are marketed globally under well-known brand names including NUODEX,
NUOSPERSE and EXKIN with a particular emphasis on sales of these products
in Europe. For the year ended 30 June 2003, the coating additives business 
had sales of some €42.6 million.

Chemicals and specialty surfactants

Servo's chemicals and specialty surfactants business produces a variety of
specialty chemicals and surfactants targeting a broad range of industries. The
business enjoys long-standing commercial relationships with several major
household product customers. In addition, Servo has a long-term manufacturing
and supply agreement for oilfield chemicals with Champion-Servo. With effect
from Completion, this agreement will be replaced by a new manufacturing and
supply agreement which the Directors consider to be overall on no less
favourable terms than the existing manufacturing and supply agreement (as
described below in the paragraph headed 'Arrangements with Champion'). For the
year ended 30 June 2003 the chemicals and specialty surfactants business had
sales of some €54.8 million, which included oilfield chemicals sales of some
€10.3 million.

Pulp and paper chemicals

Servo's pulp and paper chemicals business supplies specialty chemicals to the
pulp and paper industries. For the year ended 30 June 2003 the pulp and paper
business had sales of some €10.5 million, primarily in Europe.

Integration

Servo has been operated as a standalone business by Sasol Surfactants and as a
result has an experienced management team running the operational side of its
business. Elementis intends to integrate Servo fully following a similar
integration plan to that successfully adopted in the OxyChem Acquisition.

Following Completion, Elementis, in conjunction with Elementis Specialties and
the Servo Group's business, will conduct a thorough review of the Enlarged Group
to determine the optimum deployment of assets and personnel, which will then be
implemented as soon as possible.

It is currently envisaged that Servo will be integrated into the Elementis
Specialties' business unit, retaining the Servo product brands where it is
deemed commercially prudent to do so. Servo's primary manufacturing facility in
Delden, The Netherlands will form a key part of Elementis Specialties' European
manufacturing operations.

The Directors believe that the rationalisation and consolidation in Elementis
Chromium, achieved following the OxyChem Acquisition, clearly demonstrates
Elementis' ability to achieve post-acquisition integration cost savings and to
realise economies of scale.

Principal terms of the Acquisition

Elementis B.V., a wholly owned subsidiary of Elementis, has entered into a
conditional agreement to acquire, on a debt-free and cash-free basis, the entire
issued share capital of Servo. The purchase price payable to Sasol Surfactants
is approximately €48.5 million in cash and is subject to a completion adjustment 
to reflect the net working capital and net debt of the Servo Group at 
Completion.

The Acquisition is conditional, amongst other things, upon certain regulatory
approvals, the completion of the sale of Servo's stake in Champion-Servo and the
approval of Elementis' Ordinary Shareholders. It is anticipated that Completion
will take place around the end of the Company's financial half year.

As part of the Acquisition, Servo will enter into commercial arrangements with
certain members of the Sasol Group which are expected to be beneficial to the
developments of the Enlarged Group's businesses in the future.

Arrangements with Champion

Servo has agreed to sell its 28% interest in Champion-Servo to a member of the
Champion Group, at the same time as Completion. Servo will retain the
consideration from this transaction which will result in a net benefit for
Elementis, as the acquiror of Servo, of approximately €4.25 million comprising
approximately €1.75 million in cash and approximately €2.5 million in the form
of a loan note guaranteed by Champion.

As part of the formation of the Champion-Servo joint venture, Servo entered into
a long-term manufacturing and supply agreement with Champion-Servo. With effect
from Completion, the existing manufacturing and supply agreement will cease to
have effect and Servo will instead have the benefit of a new long-term
manufacturing and supply agreement with Champion-Servo which the Directors
consider will be overall on no less favourable terms than the existing
manufacturing and supply agreement. Under this new agreement, Servo will be
Champion's sole supplier for certain oilfield chemical products in the agreed
Territory. The manufacture of oilfield chemicals will therefore continue to
represent an important part of Servo's chemicals and specialty surfactants
division.

Financing the Acquisition

Taking into account the net benefit of approximately €4.25 million to Elementis
arising from the sale of Servo's stake in Champion-Servo, the total net cost of
the Acquisition (including estimated associated transaction expenses) will be
approximately €47.5 million. The Acquisition will be funded through Elementis' 
recently renewed committed multi-currency revolving credit facility established 
with a syndicate of banks led by The Royal Bank of Scotland plc.

Current trading and prospects

Elementis

During the first three months of 2004, sales in US dollars have moved ahead by
approximately 6.5 per cent versus the same period last year. It is currently
anticipated that operating profit at the half year will be significantly
impacted by volume and product mix pressures in Elementis Chromium and
inflationary cost pressures and the effect of a weaker Euro against Sterling,
across all businesses. Given current market trends it is, however, anticipated
that an improvement in operating profit performance is likely to be evident in
the second half of 2004.

Specialties

Elementis Specialties' sales in US dollars in the first three months of 2004
have shown good growth when compared to the same period in 2003, reflecting
growth in all major market sectors and geographies. The critical North American
coatings market has shown signs of a modest improvement in base demand. The
performance of Elementis Specialties for 2004 will depend heavily on the
strength of the mid-year seasonal demand peak in the coatings sector and on the
continued success of new product introductions. Profit improvement is being
constrained by rising raw material and energy costs and ERP system start up
costs, although the benefits of the latter will begin to accrue later in the
year.

Pigments

During the first three months of 2004, Elementis Pigments has achieved continued
sales growth in US dollars, particularly in the construction sector. Margins
are, however, under pressure due to upward raw material, energy and scrap steel
price increases. Elementis Pigments has announced price increases of around 5
per cent, effective from March onwards. Pigments profitability will be
negatively impacted in 2004 by the cost of the ERP system implementation and the
start-up costs of the new plant in Taicang, China, with the benefits expected to
be realised from 2005 onwards.

Chromium

As a result of the 10-15% phased price increase announced in December 2003,
chromium chemicals prices have moved ahead in the first three months of 2004
from the lows reached in the fourth quarter of 2003, albeit with considerable
variability and some volume losses. Most of the volume lost as a result of the
de-registration of the arsenic-based wood preservative CCA has been replaced
with new, but lower margin, business. Consideration of a chromium-based
alternative to CCA by the US environmental protection agency is ongoing. The
premium aerospace, refractory and pigment markets are showing signs of recovery
and fixed costs are continuing to trend downwards. Elementis anticipates that
further market capacity rationalisation will occur during 2004, in particular in
the Far East. With market indicators positive, further price increases will take
place in July. Rising cost pressures, however, on freight, raw materials and
energy and the weakening of the Euro are putting continued pressure on margins.

Elementis currently anticipates that Elementis Chromium will show a modest loss
in the first half of 2004 and that a recovery in operating profit in Chromium as
a result of overall market trends is likely to become evident in the second half
of the year.

Specialty Rubber

Specialty Rubber has continued to show strong sales growth during the first
three months of 2004, driven by expansion of its core businesses and demand
growth in South Africa and Asia. Focus on emerging geographical markets is
expected to sustain future growth and prices are being increased. As previously
stated, ERP implementation costs and higher raw material prices are expected to
impact operating profit as the year progresses.

Servo

Despite significant growth in operating profit since the financial year ended 30
June 2001, the Servo Group has been affected over the period since 30 June 2003
by disruption to its business caused by the sale process, lower than anticipated
orders received from Champion-Servo (which Servo's management attribute in part
to the sale process) and the strengthening of the Euro against the US dollar.
Other exceptional factors affecting the Servo Group's performance over that
period include a one-off charge in relation to severance pay to the former Servo
Managing Director as well as an increased allocation by Sasol Surfactants of
central management charges. Primarily as a result of these factors, Servo's
operating performance for the period since 30 June 2003 to date is not expected
to reach the levels of the equivalent period last year.

However, the Directors are confident of enhancing the trading performance of
Servo as part of the Enlarged Group in Elementis' current financial year. The
Directors believe that this will be achieved by revenue enhancing measures,
including removing uncertainty as to the business' future, increasing sales to
Champion under the new manufacturing and supply agreement and by a reduction in
costs.

The Enlarged Group

In summary, the Directors believe that in the future they and their management
team will be able to progress further the trading performance of the Enlarged
Group and see good opportunities to invest in, and to build upon, the respective
strengths of each business in the Enlarged Group.

Other

A circular providing further details of the Acquisition and convening an
extraordinary general meeting will be posted to Ordinary Shareholders shortly.
It is anticipated that Completion will take place around the end of the
Company's financial half year.

Elementis is being advised on the Acquisition by Deutsche Bank. Cazenove & Co.
Ltd and Hoare Govett Limited are acting as brokers to Elementis.

(2) Ordinary Shareholders should not infer from this statement that earnings
will necessarily be greater for the Company in the current financial year than
during the last financial year.

(3) On 20 April 2004, Servo signed an agreement to sell its 28% shareholding in
Champion-Servo to Champion. The financial statements of the Servo Group have
been qualified by KPMG LLP in respect of the financial information relating to
the investment in Champion-Servo which will be included in the circular to be
sent to Ordinary Shareholders.


Enquiries:

Elementis plc - 01784 227000
Geoff Gaywood (Group Chief Executive)
Brian Taylorson (Group Finance Director)
Hilary Reid Evans (Head of Investor Relations and Corporate Communications)

Deutsche Bank AG London - 020 7545 8000
Jeremy Lucas
Martin Copeland

Cazenove & Co. Ltd - 020 7588 2828
Malcolm Moir

Hoare Govett Limited - 020 7678 8000
Andrew Chapman

Brunswick Group LLP - 020 7404 5959
Andrew Fenwick
Wendel Carson

Deutsche Bank, which is regulated by the Financial Services Authority for the
conduct of designated investment business in the UK, is acting exclusively for
Elementis plc and for no one else in connection with the Acquisition and will
not be responsible to anyone other than Elementis plc for providing the
protections afforded to customers of Deutsche Bank or for providing advice in
relation to the Acquisition.

Cazenove & Co. Ltd and Hoare Govett Limited, which are regulated in the United
Kingdom by the Financial Services Authority are acting as brokers to Elementis
plc and no one else in connection with the Acquisition and will not be
responsible to anyone other than Elementis plc for providing the protections
afforded to clients of Cazenove & Co. Ltd and Hoare Govett Limited or for
providing advice in relation to the Acquisition.

DEFINITIONS

In this announcement, the following expressions shall have the following
meanings, unless the context otherwise requires:

'Acquisition' means the proposed acquisition by a wholly owned subsidiary of
Elementis of Servo on the terms and subject to the conditions set out in the
Acquisition Agreement;

'Acquisition Agreement' means the share sale and purchase agreement dated 21
April 2004 and made between, Elementis B.V., a wholly owned subsidiary of
Elementis, and Sasol Surfactants, being a wholly owned subsidiary of Sasol;

'Board' or 'Directors' means the directors of Elementis;

'Champion' means Champion Technologies Inc., a corporation incorporated in
Texas, the United States of America;

'Champion Group' means Champion and its subsidiary undertakings;

'Champion-Servo' means Champion-Servo B.V., a company incorporated in The
Netherlands;

'CCA' means Chromated Copper Arsenate;

'Company' or 'Elementis' means Elementis plc, a company incorporated in England
and Wales;

'Completion' means completion of the Acquisition;

'Deutsche Bank' means Deutsche Bank AG London;

'EBITDA' means earnings before interest, tax, depreciation and amortisation;

'Elementis Chromium' means Elementis' chromium business division;

'Elementis Group' means Elementis and its subsidiary undertakings;

'Elementis Pigments' means Elementis' pigments business division;

'Elementis Specialties' means Elementis' specialties business division;

'Elementis Specialty Rubber' means Elementis' specialty rubber business
primarily carried on under the name 'Linatex';

'Enlarged Group' means the Elementis Group as enlarged following completion of
the Acquisition;

'ERP' means enterprise resource planning;

'Ordinary Shareholders' means holders of Ordinary Shares;

'Ordinary Shares' means ordinary shares of 5 pence each in the capital of
Elementis;

'OxyChem Acquisition' means the acquisition by a member of the Elementis Group
in December 2002 of Occidental Chemical Corporation's chromium chemicals
business;

'RWE-Dea' means RWE-Dea Aktiengesellschaft fur Mineraloel und Chemie, a stock
corporation incorporated in the Federal Republic of Germany;

'Sasol' means Sasol Limited, a company incorporated in the Republic of South
Africa;

'Sasol Group' means Sasol and its subsidiary undertakings;

'Sasol Servo' or 'Servo' means Sasol Servo B.V., a company incorporated in The
Netherlands;

'Sasol Surfactants' means Sasol Olefins & Surfactants GmbH, a company
incorporated in the Federal Republic of Germany, being a wholly owned subsidiary
of Sasol and the sole shareholder of Sasol Servo;

'Servo Group' means Servo and its subsidiary undertakings; and

'Territory' means the geographical area of the world between 30 degrees west
longitude and 180 degrees east longitude except the Sakhalin Islands and, only
with respect to products used in the refining business, the Republic of South
Korea.
--------------------------

Note: NUODEX, NUOSPERSE and EXKIN are all registered trademarks.


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