MIRA
INFORM REPORT
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Report Date : |
31.07.2008 |
IDENTIFICATION
DETAILS
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Name : |
DEAD SEA BROMINE COMPANY LTD. |
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Registered Office : |
P.O. Box 180, Beer Sheva (84101), 12
Kroitzer Street, Makleff House, Beer Sheva
84894 |
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Country : |
Israel |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
16.06.1955 |
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Legal Form : |
Public Limited Liability Company |
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Line of Business : |
Manufacturers
and Marketers of Bromine Compounds extracted from the Dead Sea and
Bromine-Based Performance Chemicals, for Agricultural and Industrial
Purposes, Methyl Bromide, Sodium, Potassium, Ammonium Bromides, etc. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
Name & address
DEAD SEA BROMINE
COMPANY LTD.
(Known as DSBG)
Telephone 972 8 629 76 00
Fax 972
8 629 78 44
P.O. Box 180, Beer Sheva (84101)
12 Kroitzer Street
Makleff House
BEER SHEVA 84894 ISRAEL
HISTORY & LEGAL FORMATION
Originally
incorporated as a private limited company and registered as such as per file
No. 51-013749-0 on the 16.6.1955.
Converted into a
public limited liability company and registered as per file No. 52-003580-9 on
the 30.7.1986.
At a later date subject published a
prospectus offering shares to the public.
In November 2000 parent company, ISRAEL
CHEMICALS LTD., following a successful tender offer for subject’s shares,
reached full ownership over subject after it acquired 10.8% of the shares from
the public in consideration of NIS 270 million.
Consequently, subject was de-listed from
trading on the Tel Aviv Stock Exchange and during 2001 re-converted into a
private limited company (though latter registration number remains).
SHARE CAPITAL
Authorized share
capital NIS 100,000,000.00, divided into -
1
special share,
99,999,999 ordinary shares,
all of NIS 1.00 each,
of which shares amounting to NIS
87,600,078.00 were issued.
SHAREHOLDERS
Subject is a fully
owned by ISRAEL CHEMICALS LTD. (hereinafter ICL), a public limited liability
company whose shares are traded on the Tel Aviv Stock Exchange.
ICL is controlled (52%) by THE ISRAEL
CORPORATION LTD., also a public limited company whose shares are traded on the
Tel Aviv Stock Exchange, which is part of the OFER BROS. Group, controlled by
the Ofer family.
POTASH CORPORATION OF SASKATCHEWAN (PCS)
holds 10% of ICL.
The one single
special share is held by the State of Israel (given the fact subject holds
rights on Israel national resource).
DIRECTORS
1. Nir Gilad -
Chairman of ICL,
2.
Akiva Moses -
Chairman of subject and CEO of ICL,
3.
Eli Amit,
4.
Yossi Rosen,
5.
Ms. Irit Izikson,
6.
Aharon Levi,
7.
Avraham Machraz,
8.
Amnon Sade,
9.
Yoram Zimels,
10. Max Rise,
11. Avisar Paz,
12. Ehud Buch,
13. Amnon Dik,
14. Yossi Lastigson,
15. Shlomo Mor-Yossef,
16. Shlomo Maoz,
17. Amir Makov,
18. Yehoshua (Shuki)
Gold,
19. Yair Orgler.
GENERAL MANAGER
Nissim Hadar (since 1.1.08)
BUSINESS
Subject is part of
ICL Industrial Products (ICL-IP), heading the DEAD SEA BROMINE GROUP (known as
“DSBG”). Mainly via wholly-owned subsidiary BROMINE COMPOUNDS LTD., operating
as manufacturers and marketers of bromine compounds extracted from the Dead Sea
(the world’s largest bromine source) and bromine-based performance chemicals,
for agricultural and industrial purposes, methyl bromide, sodium, potassium,
ammonium bromides, etc.
DSBG has production capacity of almost
250,000 tons of bromine per year.
95% of subject's sales are for exports.
Compounds are used for flame retardant
products used in the electronic (e.g. TV's, computers) and oil/gas drilling
industries.
ICL-IP sales
comprised 22% of ICL total 2007 sales (24% in 2006).
95% of sales are exported worldwide.
Some 80% of ICL-IP
products are bromine-based (the rest is chlorine-based, magnesia-based and
others). Most of the bromine extracted is for ICL own production (some 80%),
the rest is sold to 3rd parties.
Among local
suppliers: TAGAD CHEMICALS, ISA KHOURY.
The DSBG Group is
operating from main offices in Maklef House, 12, Kroitzer Street, Beer Sheva.
Plants are situated in Sodom (at the Dead Sea shores), in the Industrial Zone, Beer
Sheva, and a large plant in Ramat Hovav (BROMINE COMPOUNDS plant).
Also operating
from plants in the USA, China and in Holland.
Also operating
from a Logistic Center in the Netherlands, and from marketing and service
offices in Israel, USA, Spain, UK, the Netherlands, China, Japan and Hong Kong.
There are 9,914 employees in the ICL Group,
of which 2,484 employees in the Industrial Products Division.
MEANS
Financial data is
included in the consolidated B/S of parent company, ISRAEL
CHEMICALS LTD.,
which shows:
US$
(thousands)
ASSETS 31.03.2008 31.12.2007
Current assets:
Cash and cash equivalents 61,005 58,204
Investments, deposits and short term
loans 122,967 73,345
Customers 1,194,964 962,113
Other receivables 167,890 133,196
Stock _1,009,393 __970,570
2,556,219 2,197,428
Investments and
long term receivables 271,449 259,519
Fixed assets 1,857,888 1,804,052
Intangible assets __580,882 __484,356
5,266,438 4,745,355
======== ========
LIABILITIES
Current
Liabilities 1,863,409 1,542,263
Long term
liabilities 1,255,796 1,336,174
Minority rights 75,079 66,421
Equity 2,072,154 1,800,497
5,266,438 4,745,355
======== ========
ICL’s current market value US$ 23.09
billion.
Subject is an “Approved Enterprise”, and as
such enjoys State benefits. Subject received approval from the Israeli
Investment Centre (IIC) for a US$ 50 million expansion plan for the Bromine
plant in Sodom.
In November 2000, the IIC approved
investment plans for subject (jointly with other members of ICL) for the sum of
US$ 140 million.
The Chief Scientist approved R&D aid
amounting to NIS 3.5 million in June 1999.
There are 2 charges for unlimited amount
registered on the company's assets, in favour of the State of Israel and
CRYSTAL PURCHASING LTD.
ANNUAL SALES
Subject pays
royalties to the State of Israel as part of the rights given for mineral
production from the Dead Sea.
ICL Industrial Products 2007 sales were US$
925,000,000 (10% increase from 2006), making a gross profit of US$ 124,200,000.
The 2007 figures include for the first time the SUPRESTA figures, who
contributed US$ 104 million for sales.
DSBG consolidated 2005 sales claimed to be
US$ 600,000,000, 98% for export.
DSBG ended 2005 with a consolidated net
profit of US$ 93,937,000.
DSBG ended 2006 with a consolidated net
profit of US$ 128,137,000.
DSBG ended 2007 with a consolidated net
profit of US$ 79,463,000.
ISRAEL
CHEMICALS LIMITED
Consolidated
Statement of Income
US$
(thousands)
Year
ended 31.12
2005 2006 2007
Sales 2,986,001 3,258,161 4,100,284
Gross profit 1,140,653 1,153,226 1,515,035
Operating income 561,329 536,445 714,660
Income before taxes on income 514,272 494,901 641,202
Net income 422,173 373,903 535,640
======== ======== ========
ICL consolidate sales for the first 3 months
of 2008 were US$ 1,528,133,000 (73% increase compared to the parallel period in
2007), making a gross profit of US$
730,566,000, an operating profit of US$ 464,995,000, and a net profit of US$ 353,199,000.
ICL Industrial Products (mainly bromine
compounds) noted 47% rise in 1stQ08 comparing to 1stQ07, mainly due to the
inclusion of the SUPRESTA results.
OTHER COMPANIES
Also part of DSBG and ICL Industrial
Products (among others):
BROMINE COMPOUNDS LTD., 100% subsidiary of
subject,
BROMINE COMPOUNDS MARKETING (2002) LTD.,
100%,
TETERBAUM TECHNOLOGIES LTD., 50%,
CHEMADA FINE CHEMICALS LTD., 26%,
L.B BROMINE COMPOUNDS LTD., 50%,
EUROBROM B.V., the Netherlands,
EUROBROM B.V. ESPANA, Spain,
ASIA BROM LTD., Hong Kong,
BCTL, Hong Kong,
BROMOCHEM (FAR EAST), Japan,
SYNERGY FLUIDS, USA,
AMERIBROM INC, USA,
CLEARON CORP., USA,
HY YIELD BROMINE, USA.
Other companies part of the ICL Group, among
many others:
ICL
Fertilizers Division:
ICL FERTILIZERS MARKETING LP,
ROTEM AMFERT NEGEV LTD., producers,
exporters and marketers of a varitey of products based on phosphate rock mined
in the Negev Desert, including phosphate fertilizers, phosphoric acid and
specialty fertilizers.
FERTILIZERS AND CHEMICALS LTD.,
manufacturers, importers and marketers of fertilizers and chemicals, mainly for
the agriculture sector, nitrogen and phosphorus fertilizers, industrial
chemicals, feed additives, etc.
EUROCHIL HOLDING B.V., Germany
AMSTERDAM FERTILIZERS DEUTSCHLAND OHG
(AMFERT GERMANY)
AMSTERDAM FERTILIZERS B.V., the Netherlands
ROTEM HOLDING GmbH, Germany
ROTEM BKG LLC, USA
ROTEM DU BRAZIL, Brazil
ICL FERTILIZERS MARKETING LP
ICL FERTILIZERS (INDIA) PRIVATE LIMITED,
India
DEAD SEA WORKS LTD., producers,
manufacturers, exporters and marketers of potash and other chemicals from the
Dead Sea. Controls, among others, IBER POTASH S.A. of Spain and ASHLEY
CHEMICALS LIMITED of the U.K.
P.M. CHEMICALS SRL, Italy
RANTHAI AGRO CO. LTD., Thailand
ICL
Performance Products:
ICL PERFORMANCE PRODUCTS INC,
B.K. GIULINI GmbH, a subsidiary in Germany
ASTARIS INC. of the U.S.A. and Brazil,
acquired end of 2005.
ICL Metallurgy, headed by DEAD
SEA MAGNESIUM LTD., producers, manufacturers, exporters and marketers of
magnesium and related products, producing magnesium from the Dead Sea.
MIFALEI TOVALA LTD., land transportation, bulk transportation.
I.D.E. TECHNOLOGIES LTD., 50%, desalination
facilities and water treatment.
And many others, including companies in the
ICL Group and THE ISRAEL CORP. concern.
BANKERS
Bank Leumi Le'Israel Ltd., Beer Sheva,
Branch (No. 921), Beer Sheva.
Bank Hapoalim Ltd., Beer Sheva Branch (No.
631), Beer Sheva.
CHARACTER
AND REPUTATION
There are several lawsuits against subject
and subsidiaries, mainly due to environmental issues. None of the lawsuits seem
to be significant at this stage.
Apart from that, nothing unfavorable
learned.
DSBG is considered of the world’s leading
company in the bromine market, with estimated production of 27% of the total
elementary bromine production in the world. Imports amount to US$ 100 million
per annum.
ICL is a
multi-national concern, among the world's leading suppliers of minerals and one
of the largest industrial concerns in Israel. ICL is the world's largest
producer of PK fertilizers (compound of potash and phosphate fertilizers).
THE ISRAEL CORPORATION LTD. is one of the largest concerns in Israel and
the OFER BROS. Group, whose main shareholders are Sami Ofer and his
son Idan Ofer, is one the largest and most influential groups in the Israeli market,
as well as businesses worldwide.
Having ISO 9000 and 14000 quality standards.
In 1995 ICL
acquired CLEARON CORP. of the USA, in consideration of US$ 50 million.
DSBG signed several major supply deals and
strategic cooperation agreements with multinational corporate, including with
KODAK (circa US$ 40 million in 5 years).
Subject signed long term cooperation
agreement with the DOW CHEMICALS Group, including with subsidiary DOW
AGROSCIENCE, for the joint development, licensing, manufacturing and
distribution of Methyl Bromide substitute (the production of Methyl Bromide
will be banned completely by 2015).
The value of the agreements - of around US$
100 million per annum.
DSBG has signed a joint venture agreement
with the Chinese leading chemical company SHANDONG HAIHUA SHAREHOLDING COMPANY
LTD., for a joint establishment of a manufacturing and marketing plant in China
for bromine compounds, with investment of US$ 30 million (equally split).
Subject also established a company in
Luxemburg L. B. COMPOUNDS LTD., 50% partnership with a local company for the
production of intermediate products for the medical industry.
DSBG also signed in 2001 an agreement with
one of the largest Japanese companies, D.K. (manufacturers and marketers of
chemical products), for the formation of a joint venture, to deal in
manufacturing and marketing of delaying combustion chemical products for the
Far East market.
In September 2001 a sale deal of US$ 20
million of the new venture’s products was announced, with Japanese DAIHACHI
CHEMICAL INDUSTRY.
In November 2001, it was published that DSBG
(51%) and AGRICHEM will establish jointly SOILTECH, to market agricultural
disinfectors.
In January 2003, it was reported that DSBG
signed a cooperation deal with MANAL of Japan.
In september 2005, ICL acquired ASTARTIS,
producers of phsphate-based products of the USA and Brazil, for a sum of US$
255 million.
In the beginning of 2007 ICL acquired also
the assets and activities of Canadian FIRETROL, which develops phosphoric based
products for fire extinguishing (in forests, etc.).
In August 2007 ICL acquired American
SUPRESTA, manufacturers of phosphorus products for fire safety, in
consideration of US$ 352 million (by ICL own finance). SUPRESTA is the leading
company in its field in the world. ICL's products for fire safety were so far
based on bromine, and the purchase expands this line of products to the new
area.
In November 2007, ICL, via ICL PERFORMANCE
PRODUCTS, acquired BIOGEMA of France, producers of fire extinguishing products,
for several US$ million.
In January 2008, ICL, via ICL PERFORMANCE
PRODUCTS, acquired the water treatment activities of the HENKEL Concern, for
US$ 89 million.
SUMMARY
Good for trade engagements and all credits.
FOREIGN EXCHANGE
RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs. 42.90 |
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UK Pound |
1 |
Rs. 84.21 |
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Euro |
1 |
Rs. 66.33 |
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)