Wilmar - OCBC Investment 2016-10-05: Forms JV with Raizen

Wilmar - OCBC Investment 2016-10-05: Forms JV with Raizen WILMAR INTERNATIONAL LIMITED F34.SI

Wilmar - Forms JV with Raizen

  • In line with plans to expand its sugar business, Wilmar announced yesterday evening of a new joint venture, “Raizen and Wilmar Sugar Pte. Ltd.” or “RAW”, following earlier news articles on this since Dec 15. 
  • This is a 50:50 JV with Raizen Energia S.A., Brazil’s largest producer of very high polarization (VHP) sugar. 
  • With Raizen’s output of ~3m metric tonnes of VHP sugar, and Wilmar’s existing origination in Brazil, RAW will export a total volume of ~4.5m metric tons annually as it leverages on Wilmar’s international network of customers. This would also make RAW become one of Brazil’s largest sugar exporters. 
  • All relevant regulatory approvals for the JV have been obtained. In particular, VHP Brazilian sugar has high sucrose content (99.4% or more) and its sugar crystals are easier to refine into white sugar, making it one of the most sought-after raw sugar export globally. 
  • Post 2Q16 results, we had a HOLD rating and fair value estimate of S$3.00 on the stock.

Jodie Foo OCBC Investment | http://www.ocbcresearch.com/ 2016-10-05
OCBC Investment SGX Stock Analyst Report HOLD Maintain HOLD 3.00 Same 3.000