Wilmar International Limited · SGX:F34
Wilmar International — Merger or Acquisition (November 2007)
34 slides from Wilmar International's merger presentation, Nov 16, 2007
Slide 1: Formation of 50:50 Joint Venture for Investments in Palm Oil and Rubber Assets in Africa
Formation of 50:50 Joint Venture for Investments in Palm Oil and Rubber Assets in Africa Presentation to Analysts and Media 16 November 2007 Singapore 1
Slide 2: Forward looking statements
Forward looking statements This presentation may contain statements regarding the business of Wilmar International (‘Wilmar’) and its subsidiaries (‘Wilmar Group’) and Olam International Limited (‘Olam’) and its subsidiaries (‘Olam Group’) that are of a forward looking nature and are therefore based
Slide 3: Presentation Panel
Presentation Panel Sunny Verghese Group Managing Director & CEO, Olam Kuok Khoon Hong Chairman & CEO, Wilmar International Jean-Louis Billon Chairman, SIFCA Group Yves Lambelin CEO, SIFCA Group Ranveer S. Chauhan Regional Head, West Africa, Olam 3
Slide 4: Presentation Outline
Presentation Outline Wilmar-Olam JV (‘Nauvu’) Overview Transaction Overview About SIFCA Group Transaction Rationale Financial Parameters Summary Q&A 4
Slide 5: Presentation Outline
Presentation Outline Wilmar-Olam JV (‘Nauvu’) Overview Transaction Overview About SIFCA Group Transaction Rationale Financial Parameters Summary Q&A 5
Slide 6: Nauvu Investments (Wilmar-Olam JV): Rationale
Nauvu Investments (Wilmar-Olam JV): Rationale JV combines the plantation management (upstream) and manufacturing (midstream) capabilities of Wilmar in the edible oil supply chain with Olam’s skills in downstream management, including distribution, its country, market and credit risk management skill
Slide 7: Nauvu Investments: Combining Strengths
Nauvu Investments : Combining Strengths The Wilmar Advantage The Olam Advantage Asia’s leading agribusiness Strong origination and distribution group. capability: Upcountry procurement World’s largest integrated infrastructure in more than 40 origin countries, including deep presence processor o
Slide 8: Nauvu Investments: Why Africa?
Nauvu Investments: Why Africa? Both Wilmar and Olam strongly believe that Africa is the next frontier for agricultural production as it offers exciting prospects for setting up plantations and integrated agri- business operations. We therefore would like to be ahead of the curve by taking an early l
Slide 9: Nauvu Investments: Why Africa? (Con't)
Nauvu Investments: Why Africa? (Con’t) Plantation labour cost in Africa is cheaper than in emerging Asia. Natural rubber yields in Africa are much higher than in Asia while oil palm yields are lower. Natural rubber exports from Africa to Europe enjoy concessionary tariffs and import duties. Lower pa
Slide 10: Nauvu Investments: Scope
Nauvu Investments: Scope JV Partners : 50% owned by Wilmar and 50% by Olam JV name : ‘Nauvu’ pronounced as ‘Na-wu’ Head-quarters : Singapore Business scope : Plantations and related processing, manufacturing and marketing / distribution in Africa Board : 4 member board (2 each from Wilmar & Olam) Ma
Slide 11: Transaction Overview: Nauvu's 1st Initiative (3 investments)
Transaction Overview: Nauvu’s 1st Initiative (3 investments) Deal Description Wilmar-Olam JV to invest in 25% strategic stake in SIFCA Group. 50.5% stake in SIFCA’s and Unilever’s edible oil business in Cote d’ Ivoire, post their merger into a single company (Newco) 16.65% strategic stake in Palm-CI
Slide 12: Transaction Overview: Nauvu's 1st Initiative (3 investments)
Transaction Overview: Nauvu’s 1st Initiative (3 investments) Indicative Investment (in US$m) Wilmar Olam Nauvu Investment 1. SIFCA Group (*) 66.00 66.00 132 Value 2. Newco 22.50 22.5 45 3. Palm-CI 15.85 15.85 31.7 Total 104.35 104.35 208.70 Out of this, approximately US$5.9 million is on a contingen
Slide 13: Transaction Overview: Nauvu's First Initiative (3 investments)
Transaction Overview: Nauvu’s First Initiative (3 investments) Financing Acquisition to be funded through borrowings and internal accruals. Newco shall purchase entire CPO production of Palm- Pre-agreed CI at price linked to the CIF Rotterdam price less conditions freight differential. Newco shall s
Slide 14: Transaction Structure
Transaction Structure 50% 50% 25% OLAM-WILMAR JV COMPANY 50.5% 16.65% 51.15% 49.5% NEWCO PALM-CI Assets Production Assets Production Marketing Plantations + Oil Oil Oil CPO Marketing State: 20.9% production CPO Others: 4.0% Public (BRVM): 7.3% 14
Slide 15: Presentation Outline
Presentation Outline Wilmar-Olam JV (‘Nauvu’) Overview Transaction Overview About SIFCA Group Transaction Rationale Financial Parameters Summary Q&A 15
Slide 16: About SIFCA Group
About SIFCA Group The largest private Ivorian agro-industrial group with current interests spread across Palm, Natural Rubber, Sugar and Cotton Seed Oil businesses Largest player in the West African rubber and palm industry Second largest player in the Ivorian sugar sector Financials by main o
Slide 17: SIFCA group structure: vegetable oil, sugar, rubber
VEGETABLE OIL SUGAR RUBBER 29.5% 55.57% 51.1% PALM-CI SIPH SUCRIVOIRE Michelin : 20% (Plantation) (Plantation & Milling) (France) CPO Euronext: 24.41% 100% 49.5% SODIMA 65.8% NEWCO SAPH (Refining) OLEIN (Distribution) (Cote d’Ivoire) 80% 60% SHCI GREL (CPO Storage) (Ghana) State of Ghana : 25% NEWGE
Slide 18: SIFCA Palm Oil
SIFCA Palm Oil Palm Plantation & CPO Production CPO Refining (PALMCI & PHCI) (NEWCO) CPO contributes to 80% of Newco is Cote d’ Ivoire’s vegetable oil turnover while the dominant palm refiner with more rest comes from Cotton Seed Oil than 80% market share and with a (6,000 MT/year) 30% market share
Slide 19: SIFCA Rubber and Sugar
SIFCA Rubber and Sugar SIFCA Rubber SIFCA Sugar (SIPH) (SUCRIVOIRE) Largest rubber plantation Integrated player with sugarcane owner and producer in West plantation, milling and Africa. distribution operations. Sizeable presence in Nigeria, Owns and manages 10,000 Ivory Coast and Ghana. hectare of p
Slide 20: Presentation Outline
Presentation Outline Wilmar-Olam JV (‘Nauvu’) Overview Transaction Overview About SIFCA Group Transaction Rationale Financial Parameters Summary Q&A 20
Slide 21: Palm Oil: Market Opportunity
Palm Oil: Market Opportunity Palm oil occupies the top slot in global West production (25%), global trade (>50% YE September World Africa share) and consumption (25%) share Production (mil tons) within the Vegetable oils complex. 2006: 36.1 1.68 Growth in consumption of palm oil will 2005: 33.4 1.69
Slide 22: Transaction Rationale
Transaction Rationale Entry into Palm Oil Africa is the next frontier for plantation development in Africa particularly for oil palm and rubber, and Nauvu wants to be in the forefront of this development. Sizeable addressable market in West Africa where Palm Oil is largest consumed vegetable oil at
Slide 23: Palm Oil in Africa: Critical Success Factors
Palm Oil in Africa: Critical Success Factors Nauvu believes that an integrated operation from plantation and processing to refining and retail packaging are key ingredients to a successful palm oil business Nauvu‘s investment in an integrated palm oil business combines the complementary strengths of
Slide 24: Palm Oil in Africa: Critical Success Factors
Palm Oil in Africa: Critical Success Factors Transaction enables Nauvu to: Achieve leadership position in geographical niches in Palm Oil in partnership with the best in the world. Enjoy synergies from Wilmar’s plantation and edible oil manufacturing expertise, an enhanced distribution network t
Slide 25: SIFCA: Integrated Palm Oil Supply Chain
SIFCA: Integrated Palm Oil Supply Chain Other Farmers Newco Palm-CI processes refines Palm 1m MT FFBs 300,000 MT Olein Olein is sold CPO Ginning Retail Brands Plantations into 200,000- of CPO to 250,000 MT in branded 230,000 MT of CPO produce retail packs Olein Land Bank : and Stearin 36,000 ha cult
Slide 26: Natural Rubber: Market Opportunity
Natural Rubber: Market Opportunity Natural Rubber World Africa Total rubber consumption over Production (mil tonnes) the past 10 years has been 2006: 9.68 0.42 growing at a 3.2% CAGR, slightly 2005: 8.89 0.41 higher than total production at a 2004: 8.64 3.0% CAGR. 3-year CAGR: 5.86 Rubber consumptio
Slide 27: Transaction Rationale
Transaction Rationale Entry into Rubber in Participate in an attractive and growing rubber Africa industry which is structurally poised to remain attractive in the medium to long term. Niche opportunity to participate in Rubber and be a focused player, building leadership positions in an origin of s
Slide 28: Rubber and Sugar: Critical Success Factors
Rubber and Sugar: Critical Success Factors As largest rubber plantation owner and producer in West Africa, SIFCA has a significant presence in Nigeria, Cote d’Ivoire and Ghana, all which are Olam’s key origins. Partnership with a large, market dominant player like SIFCA allows Nauvu to achieve leade
Slide 29: SIFCA: Integrated Rubber & Sugar Supply Chain
SIFCA: Integrated Rubber & Sugar Supply Chain Rubber Rubber Exports 110,000 MT Crop inputs Plantations Land Bank : 50,000 ha of which 38,000 ha Planted Sugar Produces Milling Crop inputs Distribution Plantations 70,000 MT p.a. Land Bank : 10,000 ha 29
Slide 30: Presentation Outline
Presentation Outline Wilmar-Olam JV (‘Nauvu’) Overview Transaction Overview About SIFCA Group Transaction Rationale Financial Parameters Summary Q&A 30
Slide 31: Financial Impact
Financial Impact Through Olam or Wilmar’s interest in SIFCA Olam/ Steady- Olam/ Steady- Wilmar’s (US$m) state Wilmar’s state NPAT Share of Revenues Stake each NPAT each SIFCA Group 745 63 12.5% 7.9 Through Olam or Wilmar’s direct stakes in Palm-CI and Newco Newco 300 30 25.25% 7.6 Palm-CI * 165 15 8
Slide 32: Presentation Outline
Presentation Outline Wilmar-Olam JV (‘Nauvu’) Overview Transaction Overview About SIFCA Group Transaction Rationale Financial Parameters Summary Q&A 32
Slide 33: Summary
Summary Wilmar and Olam announce formation of Nauvu, a 50:50 joint venture, for investments in Palm Oil and Rubber Assets in Africa, the next frontier for integrated plantation development and agri businesses. Nauvu brings together Wilmar - Asia’s leading and one of the world’s largest agri-business
Slide 34: Q&A
Q&A 34
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