RAPPORT ANNUEL / ANNUAL REPORT

2007

The continuous and sharp increase in the price of the rawmaterials we trade in, as well as the increase in freight rates ofthe vessels which transport these materials made it quite difficultto run our businesses in 2007. Moreover, the Sahel countriescotton sector, a major SSI customer in Africa, continued to be in abad situation.

As SSI had fortunately anticipated these phenomena since 2006, itwas able to maintain, in spite of these, appreciable 2007 results by: > Improving further the control of its supply/production/marketing

chain according to stricter norms, making it possible to limit themechanical increase in working capital needs.

> Implementing a development of its product mix towards sectorswith better added value (fewer fertilisers, more chemicals andcrop protection products).

> Being less active in sectors which were difficult, risky and subjectto long deferred payment (cotton in particular).

Thus, in all, due to the work and experience of the men and womenof SSI, the results of the company and the group could be maintained.And we thank them for that.

2007 was also marked by some fine special results and bysome projects.

Ranking first in the success list, let us quote BACONCO which posted,after difficult years and an ambitious recovery programme, anextremely satisfactory performance and which now joins up withthe general norms of our activities. The other subsidiaries all obtained results in line with their previousperformance, in spite of the political difficulties in certain countriesor in spite of general economic difficulties.Specific mention for GOLDEN STORK in Ghana which realised avery encouraging first financial year.

The projects are:> The first steps towards privatisation. 2007 saw the success of

our negotiations with our Vietnamese partners for the purchaseof our PROCONCO shares. After a final year with quite honoura-ble results taking into account the increase in raw material pri-ces (soy, maize), the share purchase agreement was sealed inDecember 2007 and carried out in February 2008 to the satisfac-tion of both parties.

> The following steps towards this privatisation which involve theother two Vietnamese subsidiaries and which are in progress.

> Developments in Africa, in new countries, Ghana and Angola,which require constant attention.

> The extension and deepening of our health and safety policy bymeans of implementation and the development of instrumentswhich are bearing fruit.

> And finally, the complete overhaul of our computerised informationand management system around a central and homogeneoussystem, the progressive implementation of which, first in theParis office and then in the subsidiaries, will take at least twoyears. Our needs analysis, the choice of an ERP and an integratorand the starting of the process are under control and progressingsatisfactorily.

The cohesion of the group is SSI’s great strength. While preservinglegal, regulatory and local culture particularities, the standardisationof our safety systems and information systems will contributegreatly to this cohesion. This is SSI’s main 2008 project which willspecifically improve even more the services we provide, in sometwenty countries, to our customers and partners.

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RT2007: A difficult yet

exciting year

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Life in the subsidiaries

PROCONCO was hit in 2007 head-on by the increase in raw materialprices. Prices of maize and soy cakes soared and they represent upto 80% of the price of the finished products sold by our subsidiary.In a very competitive environment margins were squashed and thePROCONCO results halved. The French General Manager, an SSIManaging Director at the head of this company, succeeded in retainingthe SSI rights until the end of the negotiations concerning the purchaseof our shares by the Vietnamese partners. BACONCO confirmed its strategic orientation and continued leavinghighly competitive product sectors to establish its business in betteradded value sectors: speciality fertiliser, USP range, bio-organicfertiliser, crop protection products… The result is particularly satis-fying. Moreover, all the trouble caused by cyclone Durian which hitthe plant in December 2006, was overcome, in particular thanks toa good insurance cover. BARIA SERECE continues its progress and exceeds for the first time3 million tons (for 450m of quay length!). Partnership agreementswith its main clients are developing satisfactorily. The results are inline with those of the previous years. SEPCM on Madagascar is recovering its economy slightly. Thecooperation with the Mauritian partner is making progress, specificallyin the chemicals sector. The island remains dominated by a ratherprecarious economy in spite of major mining investment projects. ADER in Cameroon had a very good year with a sound diversity ofits activities and markets. The country’s political difficulties havefor the moment not affected its economy too much.IN WEST AFRICA (STEPC in Ivory Coast, GOLDEN STORK in Ghana,SCAB in Burkina Faso, BANIKONO in Mali, LA CIGOGNE DAKAR),the relative return to a certain state of political calm in Ivory Coastmakes it possible to have more stable situations. Despite everything,the combination of the increase in the price of farm inputs and thepersistent depression as concerns the price of certain finishedproducts, of which cotton, makes our activity difficult. Fortunatelydiversification. and the integration of certain added value steps(bulk blending for example) help us greatly with our balance whilewaiting for the cycles to come back to higher finished product pricesand lower raw material prices. CUBA once again had a good year, thanks to the trust our maincustomer has in us and to the rules of caution we respect in thishighly specific market. PARIS, as the commercial platform of the group, also had a verygood year. We continued our withdrawal from certain difficult sectors,diminished our exposure to fertilisers and, on the contrary, increasedour presence in chemicals and crop protection products. Under these conditions, with the support of our Group, our financial

partners, our customers, our suppliers and thanks to the commitmentof all the staff, SSI shows satisfactory results for 2007, at the samelevel of those obtained in the previous two years.2008 has started in the same context of very heavy price pressureon, and currently sometimes the availability of, raw materials. Nowthat PROCONCO has left, the SSI group will from now on live in areduced area which will undoubtedly evolve with the privatisationof BARIA SERECE and BACONCO between now and the end of theyear. The return to the historical African area, which is expanding,will give a greater coherence to our activities, more clearly salesoriented, whereas the Vietnamese establishments were moreindustry oriented. The unity of the group will be strengthened.

Commercial activity

In close cooperation subsidiaries and Paris teams manage interna-tional trading of three types of product : fertilizers, crop protectionproducts and chemical products. Two subsidiaries have moreovera relatively Paris-independent activity from a commercial point ofview : Proconco, in Vietnam, local leader in animal feed and BariaSerece, also in Vietnam, port logistics platform in the greaterSaigon region.

PRESENCE AND PROXIMITYSSI has been carrying out a genuine proximity policy with its localcustomers.SSI has made its name on the African continent as the main distri-butor of products for agriculture as well as chemical and industrialproducts, able to supply immediately, from its permanent stock,most of the industries, farmers and distributors and to put intoeffect, together with its customers, regular supply schedules.These local purchases can also be completed by direct suppliesfrom our central purchasing office, at the SSI head office in Paris.In 2007 SSI supported the activities of its existing subsidiaries andextended its presence by starting up the first commercial operationsof “GOLDEN STORK” in Ghana and our future development in Angola.Attentive to our customers, we take great care in accompanyingthem in their industrial projects by ensuring their supplies of rawmaterials reactively and in conformity with their needs.Our sales teams are specialised by product range. They carry out asearch (“sourcing”) for raw materials all over the world, making apoint of combining quality, competitiveness and punctuality of supplyschedules.

CROP PROTECTION PRODUCTS AND AGRICULTURAL PRODUCTSEither under its own brand or with a distribution license from theleading producer groups, SSI proposes the whole range of productsfor crop protection in the tropics. Part of this range is formulatedand packaged in our subsidiaries which results in attractive productioncosts and a swift response to market needs. SSI also supplies significant volumes of soil enrichment productsand soil ameliorators.A technical service anticipates the necessary development so thatSSI always remains in the forefront of its customer expectations.

FERTILIZERSSSI organises purchasing, production and logistics so as to satisfyall kinds of requirements.For medium-sized quantities (500 to 2,000 t) or container transport,SSI has put into place a continuously available stock of unblendedfertilisers at the Belgian Antwerp Northern Manuport platform (urea,DAP, granulated or plain ammonia sulphate, chloride and potassiumsulphate). The most frequently used complex NPK fertilisers arealso continuously available from this base.The building of a high-capacity blending unit (140 t/h) in 1996 onthe premises of the Northern Manuport terminal greatly increasedthe export capacity of the Division’s “bulk-blending” fertilisers i.e.from a single container to a fully loaded vessel of 10,000 t.The manufacturing process is carried out according to a quality charter.All the logistics are managed directly from Paris.The supply of the raw and intermediary materials processed in SSIsubsidiary plants allows – thanks to a volume effect – to reinforcethe competitiveness of our local productions.Thus, in West Africa, the Abidjan STEPC bulk-blending facilities hassupplied, since the very first year of its operations, more than100,000 t/year of NPK for the Ivory Coast, Mali and Burkina Fasomarkets. In Vietnam, the BACONCO production subsidiary markets annuallyover 200,000 t/year of complex, compacted and blended fertilizersin this country.

AGRICULTURE: AN ENLARGED AND INNOVATING SERVICEIn all sectors of agriculture SSI has launched a new marketingconcept by accompanying its deliveries by training the farmers howto use the products. These on-the-spot actions are carried out bythe engineers of our teams, with very positive feedback.Composed of young agricultural engineers, specialised in international

trade, and their assistants, the SSI teams constitute a centre ofdynamism, reactivity, technical excellence and availability.The widening of our product range for Africa and Asia, is linked inparticular with special soluble or insoluble fertilizers as well as newculture protection molecules put at our clients’ disposal.

CHEMICAL AND INDUSTRIAL PRODUCTSA range of more than 300 regular references makes SSI the mostimportant wholesaler of raw chemical and industrial materials in itsactivity zones. SSI satisfies the needs of all the industries presentin Africa, both for raw materials (acids, chlore-alcalis, solvents) andfor speciality products.The application sectors are highly varied: water treatment, detergents,cosmetics, agro-alimentary, paints and glues, textiles, mines, oil,metals, industrial gas, rubber…

ANIMAL FEEDFor fifteen years SSI has been highly involved in this activitythrough its subsidiary PROCONCO. The feed production for all sortsof animals (including aquaculture) reached almost 1 million tonnesin 2007. Four production units are in operation on a “round theclock, every day of the year” basis in the north and south of thecountry. Despite the epizootic diseases which hit Vietnam recently,(bird flu…) PROCONCO maintained its development and is currentlythe unchallenged leader in this country.At the same time, SSI exports to Africa and Asia soy cakes, fishmealand various other products. Thanks to its support, its subsidiaryADER has therefore become the main actor of the animal feed sectorin Cameroon.

PORT LOGISTICSAs from the beginning of its operations, specifically in Africa, theSCPA International Division had to develop logistics to ensure supplyto its subsidiaries in countries where equipment and infrastructureswere not very well developed, in the same way s it developed itsEuropean activities where the Alsatian Potash Group was very presentwithin the framework of port logistics. Hence SSI is currently involvedin the management and use of port platforms in Antwerp (Belgium),Ivory Coast, Cameroon and Vietnam. In Vietnam SSI manages thesixth highest tonnage port (more than 3 million tonnes per year) andthe only port with the capacity to handle “Panamax” type vessels(up to 75,000 tonnes).

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83-85 boulevard Vincent Auriol 75013 Paris Francetél. : +33 (0)1 44 06 53 00 – fax : +33 (0)1 44 24 56 54 – email : ssi@scpasivex.comwww.scpasivex.com