Singapore Daily Bulletin – 28/01/13

IndoAgri To Acquire 50%-Stake In Brazilian Sugar Cane Group For BRL$143.4m
Indofood Agri Resources (IndoAgri) has proposed to acquire a post-closing 50 percent stake in Companhia Mineira de Açúcar e Álcool Participações. The target group is principally engaged in the cultivation and processing of sugar cane for the production and marketing of ethanol and sugar as well as co-generation of electric power from sugar cane bagasse. Currently, the target group has one mill in Vale do Tijuco with a total crushing capacity of 3 million metric tonnes per year and can be expanded to 3.8 million metric tonnes. As part of the structuring of the deal, IndoAgri has in set up a subsidiary IFAR Brazil in Singapore that in turn has incorporated IndoAgri Brazil Participações Ltda in Brazil. Specifically, IndoAgri Brazil and a unit of JF Citrus Agropecuária Ltda have entered into definitive agreements with two sellers, ZAM Ventures LP and Fundo de Investimento em Participações PCP.

Significance: Through this acquisition, IndoAgri will be able to expand its geographical presence into the sugar and ethanol industry in Brazil. This in turn will strengthen its diversified plantation business model.

CNMC Ropes In China Gold For Malaysian Project
CNMC Goldmine Holdings is roping in China Gold for its Sokor Gold Project located in Kelantan State of Malaysia. The tie-up arrangement was reached via a technical services and co-operation agreement for mine development and technology consultation on gold production expansion. This agreement was inked between CNMC’s 81 percent owned CMNM Mining Group and China Gold Guizhou Jinxing Gold Mining Industry Co. According to the agreement, China Gold will assign a qualified and experienced mine superintendent, mining engineers, production engineers specialising in gold heap leaching operation, as well as mine laboratory technicians to the Sokor Gold Project. In particular, the China Gold team will help manage, plan, design, construct, and oversee CNMC’s gold production expansion programme for a one-year period from 1 March 2013 to 28 February 2014.

Significance: China Gold is the largest gold producer in China. With the added expertise, CNMC gold production expansion programme will be carried out more expeditiously.

Marco Polo Profit Edges Up 3.2% Despite Lower Revenue In 1Q13
Marco Polo Marine saw its profit edged up $0.1 million, or 3.2 percent, to $4.4 million in the first quarter ended 31 December despite revenue falling 38.3 percent from $24.6 million to $15.2 million. On the lower overall top line, the integrated marine logistics company noted that its ship-building segment tumbled 92.1 percent from $13.9 million to $1.1 million and its ship-chartering segment declined 5.2 percent from $5.8 million to $5.5 million as one of its offshore vessels was docked for its first mandatory special survey and other maintenance works. Gross profit margin, however, improved from 25.2 percent to 38.6 percent – attributable to the higher proportion of ship-repair revenue, which generally commands a higher yield relative to ship-building revenue.

Significance: Marco Polo expects offshore business to continue spearhead growth of its ship-chartering segment. Notably, charter rates in both the offshore vessel division as well as tug and barge division have stabilised and will continue to remain stable in the foreseeable future.