The depreciation of the rand could improve export potential for Distell, David Nurek, chairman said at the first annual general meeting of the merged company in Stellenbosch today.

In recent months the rand-pound and rand-dollar exchange rate has seen dramatic movement in favour of the two northern hemisphere currencies. At present the exchange rate is R/£13.46 after peaking last week about R13.80, while the R/$ is currently R9.26.

He said the amalgamation of Distillers' Corporation and Stellenbosch Farmers' Winery had created the critical mass needed to become a leading wine and spirits company in the global arena, enabling it to capitalise on current export growth opportunities.

The merger should also be viewed against the background of widespread consolidation trends in worldwide alcoholic beverage markets, resulting in the creation of worldwide giants with dominant portfolios of increasingly international brands.

In terms of the merger, which took effect on 1st July 2000, Distillers acquired SFW's assets and liabilities for R515.2m. This was discharged by an allotment of 55,6m shares in the share capital from 140m to 195,6m shares.

During the past year Distell recorded a total sales revenue of about R4,6bn and headline earnings of almost R209m. By the end of June 2001, total assets stood at almost R4bn. Cash generated from operating activities amounted to over R609m.

Jan Scannel, MD of Distell said the group had restructured and refocused its international operations to achieve meaningful growth in specific markets.

Distell employs 36 people in nine sales offices in Europe, the Americas, Asia-Pacific and Africa, while being represented by 154 agents in 72 countries.

"There has been a consolidation of brands and marketing spend has been adjusted to build even stronger brands," he said.