ESV GROUP PLC ("ESV" or "The Group") Pre-AGM Update In advance of the Annual General Meeting of the Company on Tuesday 5 October 2010, the Directors would advise shareholders that there are two developments which they intend to implement if all the resolutions proposed at the meeting are passed. ESV is well placed to participate in the resurgent agricultural sector via its interests in the Ukraine. The famous black soil of Ukraine, the focus of the Company's operations, is one of the world's richest. Long leases at currently advantageous costs are available and ESV has a prospective farming agreement for land in the country's agricultural heartland. The introduction of Western machinery, crop rotation systems and improved harvesting methods are providing substantially raised production possibilities and ESV's port logistics operations provide seamless export infrastructure. The world is currently undergoing food shortages which are forecast to continue in the years ahead. The OECD-FAO Agricultural Outlook 2010-2019 report estimates a steady rise of 1.1% per annum in global population numbers and that this will require a 70% increase in world food production by 2050. Production growth is estimated to be "well above 20% in China, India, the Russian Federation and Ukraine". With an increasing proportion of land devoted to biofuel crops and the trend towards higher animal-protein diets in emerging countries, pressure is building on limited land acreage. The report foresees average wheat and coarse grain prices over the next 10 years between 15-40 percent higher in real terms (adjusted for inflation) than their average levels during the 1997-2006 period. There is therefore a significant opportunity for ESV to utilise its knowledge, experience and contacts in the Ukraine to expand its interests. Secondly, ESV has agreed a Memorandum of Understanding with a Sichuan, China based developer of a silica-based organic fertiliser applicable to soils in desert and near-desert areas. The fertiliser produced uses layered porous silicate, a nanometre interlayer and high polymerising technology. It can change and improve the structure of desert land and create conditions for a positive cycle of water, fertiliser and vegetation growth. The material has been used successfully in China for the last 10 years. Bringing desert areas into agricultural production is a key objective of many emerging countries and of the product. ESV will have a majority share in a dedicated Joint Venture (JV) that intends to conduct trials in Tunisia, Algeria, Jordan, Morocco, UAE, Saudi Arabia, Iran and Israel with a view to marketing the product and making the desert bloom. Following the adoption of the resolutions at the AGM the Company would look to raise funds to allow it to gain first-mover advantage in this newly emergent market and also for the development of the opportunities available in the Ukraine. The Board therefore urges shareholders to vote in favour of the resolutions to be proposed at the AGM. This will enable ESV to move forward and grow the business. 24 September 2010 END
ESV GROUP PLC
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