TRANSLATION


Ref : 051/2004       15 October  2004


The President
The Stock Exchange of Thailand


Re: Report the progress to rehabilitate The Siam Agro Industry Pineapple and 
Others Public Company Limited as at September 30, 2004

Reference is made to the Stock Exchange of Thailand (the "SET")'s letter No. Bor. Jor. 
38/2547 dated Jan 14, 2004 concerning the request to report the progress of the 
performance of the company.

The Siam Agro Industry Pineapple and Others Public Company Limited (the 
"Company") whose shares have been traded under the REHABCO sector has already 
implemented a Rehabilitation Plan to remedy the cause of being de-listed from the SET. 
The process of rehabilitating the business commenced on April 30, 1999 when the 
Company signed the Debt Restructuring Agreement with its major creditor, 
KASIKORNBANK ("KBANK"), formerly Thai Farmer Bank Plc. and thereafter 
submitted a Rehabilitation Plan that was approved at Shareholders' meeting on August 
16, 1999. Since the injection of new equity in April  1999, the Company has made 
significant progress in rehabilitating and securing the business for long-term growth  as 
highlighted in the attached report.

For your consideration.

Yours sincerely,



Praful Shah
(Managing Director)





Summary of the progress to rehabilitate The Siam Agro Industry Pineapple and 
Others Public Company Limited

        Background

        The Siam Agro Industry Pineapple and Others Plc (the "Company") was listed on 
the Stock Exchange of Thailand ("SET") on 17 May 1989. Following a period of poor 
financial performance from 1993, the SET suspended the trading shares of Company in 
February 1997 and transferred the shares to the REHABCO sector. However, in 1999, the 
Company embarked earnestly on a rehabilitation program and made rapid progress that 
resulted in SET lifting the suspension notice on the Company's shares with effect from 
20 March 2000.
 
The Company is a manufacturer and distributor of processed fruits, pineapple and 
tropical fruits. Its core products are derived from processing of fresh pineapple and 
consists canned pineapple and pineapple juice. 

Thailand is the world's largest exporter of canned pineapple and pineapple juice, 
constituting about 40% of the world's export volume. The pineapple industry is cyclical 
with major fluctuations happening every four or five years subject to normal weather 
conditions. Fresh pineapple for processing in Thailand is sourced mainly thousands of 
farmers, each cultivating small size plantations. When the fresh pineapple price is 
attractive, farmers will be lured to switch or enlarge their existing plantations, resulting in 
an oversupply of pineapples about 18 months, when the first harvest of fruit is expected 
and hence a price slump. As a consequence, farmers will then switch to other crops that 
give better income returns. This will result in supply of fresh to decrease to the extent it is 
insufficient to meet demand thus pushing up the prices that will again encourage farmers 
to switch back to pineapple. Generally, one crop of pineapple plantation allows two 
consecutive harvests over a period of about 3 years. 

Details of the Company's progress since 1997 can be summarised as follows:


1.      Equity injection

In April 1999, Del Monte Group Limited ("Del Monte"), a member of the then 
South African based Del Monte Group of companies, a leading worldwide manufacturer 
of processed food products under the premier "Del Monte" brand name, acquired a 
controlling majority stake in the Company by investing Bt. 133.23 million with the 
purchase 13.32 million shares in the Company. Del Monte together with its designee now 
owns 15,000,001 shares or 50% of the paid-up share capital of the Company. 




2.      Debt restructurings

2.1 Following the approval at the Shareholders' meeting on 29 April 1999, the 
Company signed the Debt Restructuring Agreement with its major financial creditor, the 
KASIKORNBANK ("KBANK"), formerly Thai Farmer Bank Public Company Limited, 
on 30 April 1999. Prior to this restructuring, the amount of outstanding debt to KBANK 
including accrued interest was Bt.1,348.71 million, accounting for about 89.9% of the 
Company's total debt with banks and financial institutions at that moment. The major 
components of the debt restructuring with KBANK are as follows: 
        (a) The entire accrued interest of Bt.333.26 million up to the date of signing the 
Debt Restructuring Agreement is forgiven.
        (b) Outstanding debt of Bt. 483.78 million set off against the sale of land and 
buildings by the Company to KBANK.  After the set off, KBANK will lease the assets 
back to the Company for a period of upto 5 years. The Company has the option to 
repurchase these assets at anytime within 5 years at an agreed price which is equal to the 
set-off price plus accumulated interest at the simple annual rate of 6.0%.
        (c) Existing debt of Bt. 200.00 million converted to debentures with interest paid 
annually at the rate of 3% per annum. The debentures will be redeemed from year 11 to 
15 (2010-2014) in an equal amount of Bt. 40.00 million per year.
        (d) The remaining debt balance of Bt. 331.67 million was restructured as a 10 
year long term loan with a 5-year grace period on principal repayment. Interest is paid 
monthly at an interest rate based on Minimum Lending Rate (MLR) less 0.5%. The 
repayment of the principal  amount will commence from year 6 to 10 (2005-2009) based 
on a step-up repayment schedule, starting in April 2005 when the repayment amount is 
12% of the loan amount. This repayment is increased annually by 4% of the loan amount 
through to 2009.
        (e) In addition, KBANK has granted to the Company new Working Capital 
facilities of Bt. 200.00 million to the Company with interest charged at MOR. This 
facility is supported by Bt. 100.00 million guarantee from Del Monte.
        (f) Since April 1999, the Company has serviced all the debts with KBANK as and 
when they fall due.

        2.2 The Company has further restructured the other outstanding default debts 
including interest of Bt. 124.48 million with TISCO Finance Public Company Limited, 
Nakornthon Bank Public Company Limited, Cathay Finance (debt subsequently acquired 
by Kiatnakin Finance Public Company Limited) and Vajira Finance (now part of 
BankThai) in 1999 and 2000. With the exception of BankThai, all the other debts with 
these banks and financial institutions have been repaid as at 31 December 2002. The 
amount outstanding to BankThai is Bt. 8.495 million as at 31 March 2004. 






3.      Old accounts payable to farmers and Co-op

The Company settled in the 2nd and 3rd quarter of 1999, payables of approx. Bt. 
41.00 million outstanding to the local farmers and Rayong Agricultural Settlement Co-
operatives since 1997. 


4.      Old accounts payable to trade creditors

As at April 1999, the Company had about Bt. 147.88 million of old debts 
outstanding to various trade creditors, some of which were in litigation. Following court 
adjudication or bilateral discussions and negotiations, a work-out plan was agreed and at 
31 March 2004, a balance of Bt. 26.99 million was outstanding to one trade creditor. All 
other old debts have been settled.


5.      Approval of the rehabilitation plan by the shareholders' meeting

The Company proposed to the shareholders the Rehabilitation Plan that was 
approved at the Shareholders' meeting on 16 August 1999. Following this approval by 
the shareholders, the Rehabilitation Plan was then submitted to the SET for disclosure to 
the public.


6.      Financial status and performance from 1997 to 2003

After the equity investment by Del Monte in April 1999, the Company has 
progressively resumed normal operations with increased production from June 1999. The 
outcome of these early actions has positively impacted the results of the Company from 
1999 onwards (see attached chart).
        (a) The Company increased the tonnage of pineapple processed from about 
21,000 metric tons in 1997 to about 144,000 metric tons in 2000 but fell to about 113,000 
metric tons in 2003 due to the cyclical nature of pineapple supply in Thailand.
        (b) Over the same period, the Company's revenues from sales have grown from 
Bt. 262.60 million in 1997 to Bt. 966.31 million in 2003 after reaching Bt. 1,015.40 
million in 2000, reflecting the cyclical nature of pineapple industry. To minimize the 
impact of these pineapple cycles, the Company has embarked on a diversification 
strategy to develop and expand the tropical fruit business and other products, from about 
Bt. 28.00 million in 1999 to about Bt. 208.76 million in 2003. Furthermore, the Company 
has launched the production and marketing of tomato ketchup in 2003. 
        (c) The gross margin has increased from Bt. 2.34 million in 1997 to Bt. 104.67 
million in 2003. At the same time, the ratio of gross margin to net sales has improved 
from 0.89% in 1997 to 10.83% in 2003. The margin has been depressed since 2001 due 
to higher cost of fresh pineapple as the supply become tight coupled with the general 
appreciation of Thai Baht against US Dollar and increased costs of other raw materials. 
        (d) However, since 1999 the Company has returned to profitability and generated 
net income, recording net income from continuing operations of Bt. 29.70 million in 1999 
and Bt. 10.60 million in 2003 after posting net income of Bt. 100.51 million, Bt. 57.63 
million, and Bt. 23.73 million in 2000, 2001 and 2002 respectively, highlighting the 
cyclical impact. 
        (e) Since 1999, against a backdrop of limited capital availability, the Company 
has continued to make modest but selective investments in fixed assets to maintain and 
improve product quality and building infrastructure, develop new products, satisfy 
customers' requirements, enhancing efficiency and ensuring that the Company is in 
compliance with government regulations, environmental safety and independently 
accredited international quality standards. CAPEX in 1999 was about Bt. 16.36 million 
but increased to about Bt. 31.49 million in 2000 following the installation of major 
turnkey project to pack aseptic pineapple crush products and a juice belt press to enhance 
the recovery of our pineapple juice processing.   
(f) Following the debt restructuring with KBANK in April 1999, the Company 
has managed to reduce the net debt from Bt. 813.45 million at 31 December 1999 to Bt. 
723.84 million as at 31 December 2003 with all loans from banks and financial 
institutions are serviced as and when they fall due during this period. 

7.      Progress report for 9 months period ended 30 September 2004

Since the beginning of year, the shortage of pineapple and tropical fruit supplies 
has continued to impact the operations and performance of Company. The salient points 
are as follows:
        (a) As indicated above the cyclical nature of pineapple crop continues to 
adversely affect the core operations of the Company. Furthermore, the lack of tropical 
fruits has worsened with fruit prices much higher than last year. 
        (b) Whilst the present demand for finished goods remains good, but due to limited 
availability of fresh pineapple and tropical fruits, the Company has tried to seek increased 
amount to process and therefore sell higher volume at current selling prices which have 
improved due to supply shortage. Additionally, the weakening Thai Baht versus the U.S. 
Dollar has eased the pressure on margin after a period of rapid strengthening during the 
early part of this year. 
        (c) However, the margins have continued to be adversely impacted by higher fruit 
costs due to tight fruit supply and increased packaging and energy costs.
        (d) Since 1999, against a backdrop of limited capital availability, the Company 
has continued to make modest but selective investments in fixed assets to maintain and 
improve product quality and building infrastructure, develop new products, satisfy 
customers' requirements, enhancing efficiency and ensuring that the Company is in 
compliance with government regulations, environmental safety and independently 
accredited international quality standards. 
        (e) In April 1999, under the terms of debt restructuring with KBANK, the major 
financial creditor, the original debts of the Company of Baht 483.78 million were set-off 
against the price of land and buildings, which were sold to KBANK. The assets sold to 
KBANK consisted of plantation plots; factory and ancillary land; and buildings. KBANK 
agreed to lease these assets to the Company for up 5 years and the Company has the 
option to buy back all or any part of thereof at any time or from time to time during the 5 
years period. The initial lease period commenced from 30 April 1999 and expired on 29 
April 2004. With respect to the factory and ancillary land and buildings, as at 30 April 
2004 the Company has extended the buy back option for a period of six months, 
commencing from 30 April 2004 and expiring on 31 October 2004 and undertook a lease 
for a period for one year from 30 April 2004 to 30 April 2005.  The balance of assets, 
involving plantation plots and buildings, the Company expressed an interest to exercise 
the buy back option and is awaiting further discussions with the interested parties. 
(f) Following the debt restructuring with KBANK in April 1999, the Company 
has maintained tight control of working capital and with all loans from banks and 
financial institutions being serviced as and when they fall due during this period. 
(g) In July 2004, the court appointed Extraordinary Commissioners in Italy for 
Cirio Del Monte N.V., the majority shareholder of the Company, announced a 
preliminary agreement to sell their stake in the Company to Fresh Del Monte N.V.
In summary, despite the challenging circumstances this year and its weak balance 
sheet positions, the Company has made significant progress since 1999 in this cyclical 
industry as it continues to rehabilitate and secure the business for long-term growth.