MIRA
INFORM REPORT
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Report Date : |
04.03.2008 |
IDENTIFICATION
DETAILS
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Name : |
AGAN CHEMICAL
MANUFACTURERS LTD |
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Registered Office : |
P.O. Box 262, Northern Industrial Zone, Ashdod 77102 |
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Country : |
Israel |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
1945 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers, Exporters and Marketers of Chemicals for Agricultural
Purposes |
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 : |
No Complaints |
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Litigation : |
Clear |
name & address
AGAN CHEMICAL MANUFACTURERS LTD.
Telephone 972 8 851 52 11
Fax 972 8 851 53
88
P.O. Box 262
Northern
Industrial Zone
ASHDOD 77102 ISRAEL
HISTORY
Originally
established in 1945 as a non-registered business.
Converted into a private limited company and
registered as such as per file
No. 51-012503-2 on the 7.5.1954.
Converted into a
public limited liability company and registered as such as per file No.
52-003405-9 on the 17.12.1982.
At a later date
published a prospectus offering shares to the public and its shares were listed
on the Tel Aviv Stock Exchange.
As of May 1998,
due to change of ownership, subject's shares were delisted from trade on the
Tel Aviv Stock Exchange, following which subject converted into a private
limited company (registration number remain the same).
SHARE CAPITAL
Authorized share capital
NIS 50,000,000.00, divided into - 50,000,000 ordinary shares of NIS 1.00 each,
of which shares amounting to NIS 15,065,980.00 were issued.
SHAREHOLDERS
Company is fully
owned by MAKHTESHIM – AGAN INDUSTRIES LTD. (hereinafter M.A.), a subsidiary of
KOOR INDUSTRIES LTD., both public limited liability companies, whose shares are
traded on the Tel Aviv Stock Exchange. KOOR is also traded on the Nasdaq Stock
Exchange and is part of the I.D.B concern, controlled by Nochi Dankner.
DIRECTORS
1.
Avraham Biger, Chairman and of the MAKHTESHIM AGAN Group,
2. Ran Midan, CFO of M.A. Group,
3. Hen Lichtenstein,
4. Morris Zelkha,
5. Ehud Marom,
6. Danni Porat,
7. Yoram Hadad.
GENERAL MANAGER
David Nir (also of sister company MAKHTESHIM
CHEMICAL WORKS).
BUSINESS
Subject is part of
the MAKTESHIM-AGAN (M.A.) Group.
Manufacturers,
exporters and marketers of chemicals for agricultural purposes, i.e. plant
growth regulators, plant protection chemicals, herbicides, etc.
Subject exports
90% of its production to more than 100 countries.
Subject acquired
know how from Australian company CROP CARE.
Among local
suppliers: APPLIED CHEM, S. COHEN METAL WORKS, MODCHEM, CHEMIART, etc.
Operating from an
owned plant on an area of 33,000 sq. meters in the Northern Industrial Zone,
Ashdod. Also operating from M. A. Group rented headquarters offices in Golan
Street, Arava House, AirPort City Park, near the Ben Gurion International
Airport.
M. A. Group also
operates from 2 plants in Brazil (subsidiary MILLENIA) and smaller manufacturing
facilities in Colombia, Spain and Greece.
Distribution
through 23 marketing companies and offices worldwide.
Having 600
employees in subject and 3,184 employees serving the M.A. Group.
MEANS
MAKTESHIM-AGAN current
market value US$ 3,804 million.
In December 2006,
M.A. completed a capital raise of NIS 2.35 billion with bonds issue through the
Tel Aviv Stock Exchange.
Subject is an
“Approved Enterprise” and as such enjoys tax benefits and State incentives. Israeli
Investment Centre Administration approved an investment plan of US$ 6 million
in subject's Ashdod plant in October 1997.
In June 2004, the
investment center approved a further US$ 14.7 million investment plan for the
expansion of subject’s plant.
There are 5
charges for unlimited amounts registered on the company’s assets, in favor of a
foreign company.
Financial data is
included in the consolidated financial statements of parent company, MAKHTESHIM
– AGAN INDUSTRIES LTD., which shows:
US$
(thousands)
30.09.2007 31.12.2006
ASSETS
Current assets
Cash and cash equivalents 265,375 324,362
Short term investments 99,985 1,706
Trade receivables 632,318 486,368
Other receivables 146,556 106,372
Inventory __611,881 __607,328
1,756,115 1,526,136
Investments, loans and long term receivables 64,133 48,621
Fixed assets (net) 513,174 511,410
Other assets and deferred expenses (net) __539,146 __532,755
2,872,568 2,618,922
======== ========
LIABILITIES
Current liabilities 810,781 752,892
Long term liabilities 718,839 704,100
Minority rights 34,185 30,212
Equity 1,308,763 1,131,718
2,872,568 2,618,922
======== ========
ANNUAL SALES
Subject ended 2002
with a net profit of NIS 172,036,000.
Subject ended 2003
with a net profit of NIS 259,867,000.
Subject ended 2004
with a net profit of US$ 87,892,000.
Subject ended 2005
with a net profit of US$ 131,493,000.
(Subject's above
mentioned net income is consolidated with its subsidiaries).
Subject's (itself) 2005 sales were US$ 530,000,000, making a net profit
of
US$ 73,000,000.
Subject ended 2006
with a net profit of US$ 22,855,000 (consolidated).
MAKHTESHIM-AGAN
INDUSTRIES LTD.
Consolidated
Statement of Income
US$
(thousands)
Year
ended 31.12
2004 2005 2006
Sales 1,539,702 1,740,717 1,778,756
Gross profit 595,794 681,002 606,739
Operating income 289,187 331,071 203,794
Pre-tax income 218,881 252,286 84,909
Net income 165,527 205,493 83,919
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M.A. consolidated sales for the first 3
quarters of 2007 were US$ 1,605,414,000 (18% increase comparing to the parallel
period of 2006), making a gross profit of NIS 550,748,000, an operating profit of NIS
251,042,000, making with a net profit of NIS 158,037,000.
M.A. estimates 2007 sales to reach circa US$
2.07 billion, with net profit to exceed US$ 170 million.
OTHER COMPANIES
AGAN MARKETING
CHEMICALS LTD., 100%,
AGAN AROMA &
FINE CHEMICALS LTD., 100%, developers, manufacturers, marketers and exporters of
aroma substances for detergents.
M.A. INDUSTRIES
LTD. also controls, among many others (all fully owned by unless
otherwise stated):
MAKHTESHIM
CHEMICAL WORKS LTD., which together with subject is responsible for the Group's
main activities, developers, manufacturers and marketers of crop protection
products - pesticides, insecticides, herbicides, polyester resins,
photo-chemicals, etc.
MAKHTESHIM AGAN HEALTH AND FOOD ADDITIVES
LTD.
LYCORED LTD., 98%, holds 100% of LYCORED BIO LTD., jointly leading the non-agro activities (e.g. natural food additives, micro encapsulation of natural health materials) of the MAKHTESHIM-AGAN Group.
DALIDAR PHARMA ISRAEL (1995) LTD., developers, manufacturers and
marketers of photo pharmaceuticals (herbal based remedies).
MAB PARTICIPACOES S/C LTD.
MILENIA PARTICIPACOES S.A., incorporated in
August 1998, merging the activities Brazilian companies DEFENSA and
HERBITECHNICA.
MAGAN ARGENTINA S.A., Argentina
ARAGONESAS AGRO S.A., Spain
IRVITA PLANT PROTECTION N.V.
QUENA PLANT PROTECTION
N.V.
FAHRENHEIT HOLDINGS B.V.,
MAKHTESHIM AGAN HOLDING B.V.
MAKHTESHIM AGAN HUNARIA KFT
MAKHTESHIM AGAN COSTA RICA SA
MAKHTESHIM AGAN ESPANA SA
MAKHTESHIM AGAN NORTH AMERICA INC
MAKHTESHIM AGAN FRANCE SARL
MAKHTESHIM AGAN U.K. LTD
MAKHTESHIM AGAN ROMANIA SRL
MAKHTESHIM AGAN THILAND LTD
MAKHTESHIM AGAN ITALIA SRL
MAKHTESHIM AGAN SOUTH AFRICA PTY LTD.
MAKHTESHIM AGAN INDIA PRIVATE LTD.
MAKHTESHIM AGAN POLAND SP.ZO.O.
MAKHTESHIM AGAN SWEDEN AB
MAKHTESHIM AGAN PORTUGAL LTD.
PROFICOL S.A., 57.5%, holding PROFICOL
ANDINA N.V. and PROFICOL VENEZUELA S.A.
MAGAN JAPAN CO. LTD.
MAGAN HB B.V.
MAGAN ITALIA SRL
MAGAN HOLDING GERMANY GMBH
MAGAN KOREA CO. LTD.
AGAN ENGINEERING ENTERPRISES (1988) LTD.
KOLANT S.P.A.
FEINCHEMIE SCHWEBDA GMBH
MA U.S. HOLDING INC., USA
AGRONICA AUSTRALASIA PTY LTD. and FARMOZ PTY
LTD., Australia.
BANKERS
Bank Leumi LeIsrael Ltd., Central Branch (No. 800), Tel Aviv,
account No. 293827/75.
Bank Hapoalim Ltd., Ashdod Branch (No. 658), Ashdod, account No. 132806.
Israel Discount Bank Ltd., Ashdod Branch (No. 004), Ashdod,
account No. 99929.
A check with the Central Banks' database did not reveal any negative
information regarding subject's a/m accounts.
Citibank Ltd.,
Central Branch (No. 001), Tel Aviv.
CHARACTER AND REPUTATION
Nothing
unfavorable learned.
Having ISO 9000, 9002, ISO 14001 (Environmental Management Standard) and
TA-LUFT standard, GLP German certification.
Subject was awarded the 1999 Environmental Shield of industrial excellence
in preserving and improving the ecology.
MAKHTESHIM AGAN is considered the world’s
largest producer of generic products for plant conservation and one of the
leading companies in the agro-chemical sector, ranked 7th in world
sales in the agro-chemical field (in 2004 and 2005) with 4.3% of global sales.
In June 2002,
parent company completed the acquisition of FEINCHIMI, of Germany, for a sum of
US$ 21 million. The German company’s 2001 sales were
US$ 40 million.
In August 2000 M.
A. completed its acquisition of MILENIA PARTICPACOES S.A. of Brazil, the
company through which M.A. operates in Brazil, one of subject’s strongest
markets, for a sum of US$ 45 million.
In June 2004, it
was reported that the M.A. Group acquired 45% in CONTROL SOLUTIONS INC. (CSI),
an American pesticide company, for a sum of US$ 13.5 million. In August 2005,
it was reported that it acquired further 15% in CSI. CSI's sales in 2003
amounted to US$ 45 million.
In July 2004,
parent acquired FARMOZ, Australia 4th larges Agrochemical Company.
In September 2004,
subject's parent acquired 50.1% of RICECO of the USA, developers and
manufacturers of herbicides for rice growing.
In March 2005,
subject's parent acquired 49% of Dutch company MABENO in a shares swap deal
(with an option to increase stakes up to 55%).
In May 2005,
subject's parent acquired 70% of Hungarian distribution company BIOMARK
TRADING, with an option to increase stakes up to 100%.
In April 2005,
M.A. signed a strategic deal to distribute BAYER CropScience’s agricultural
insecticides.
In the framework
of its expansion program in the non-agricultural pesticide products, subject's
parent M.A. acquired in 2006 shares in 2 foreign companies (30% of ALLIGARE of
the USA, and 60% of Italian KOLLANT).
In November 2006
M.A. acquired a Czech distributing company (AGROVITA), and in parallel
completed the establishment of a new subsidiary in Russia. This is in the
framework of expanding penetration into the Eastern European markets, where the
M.A. Group sees large potential for its agro-chemical products.
In February 2007
it was reported that subject will purchase raw materials from China during 2007
in volume of US$ 110-120 million, which is 25% of the total raw materials
purchasing (the whole M.A. Group will purchase from China in volume of US$ 200
million of raw materials).
In 2006, the M.A. Group suffered from a bad
year in the world agro-chemical field, which was a major reason to the losses
on the 4th quarter of 2006. That, and the entrance of a new general
manager to the Group (Avraham Biger, Chairman and General Manager of the M.A.
Group since the end of 2006), led to a strategic plan issued in March 2007,
which includes organization structural changes (unifying the operations of
subject and MAKHTESHIM CHEMICAL WORKS LTD.), streamlining measures and sales
promotion.
In the framework of re-organization, the
M.A. Group moved its headquarters from Tel Aviv to new offices in AirPort City.
The management also plans to move tens of MAKHTESHIM's management, marketing,
finance and R&D staff from the plant location in Beer Sheva to the new
premises.
Subject is part of
the I.D.B. Group, one of Israel's largest concerns, which controls the KOOR
Group, as well as many other companies in Israel and abroad. During the first
half of 2006 businessman Nochi Dankner, who controls the I.D.B. Group,
increased his stake in KOOR INDUSTRIES LTD. (which controls subject's parent
M.A. with 37%) from 10% to 44% (from the Bronfman Group), thus becoming the
main shareholder of KOOR. In December 2006 I.D.B. increased its holdings in
KOOR to 52%.
In April 2007
parent M.A. announced it is negotiating with the owners of a foreign company
(where they so far have no significant presence) the possibility to acquire
control in the foreign company, which deals in the area of plant protection
products manufacturing and marketing. The target company has annual turnover of
less than US$ 100 million, however the negations are still in a very early
stages.
Israel's
Electricity Authority approved in January 2008 the erection of a private power
plant for subject's plant. The 124MW power plant will be constructed by ASHDOD
ENERGY for subject, with an estimated investment of US$ 120 million. The plan
is still pending the final approval of the Minister of Infrasructure.
According to the
Chairman of the Chemical, Pharmaceutical and Environment Division at the
Industrialists Association, total sales of the branches in 2006 witnessed a
remarkable 12.6% growth to US$ 17.4 billon, after in 2005 sales increased by
10% from 2004.
2006 exports of
the branches were US$ 8.8 billion (35% of which for pharmaceuticals and drugs
and some one third attributed to the chemical industry), a 15.7% increase from
2005, and sales to the local market reached US$ 8.6 billion, a 10% increase
from 2005.
The chemical and
pharmaceutical industries are the 2nd largest export branch (after
the hi-tech) and comprise 30% of Israel’s industrial exports. The industry
employs 28,700 employees.
Purchasing abroad
amounted to US$ 1.5 billion in 2006.
The branch
projected sales in 2007 include a 15% rise in sales for export (to US$ 10 billion) and 12% rise in total sales
(to US$ 19.5 billion).
SUMMARY
Good for trade
engagements.
Maximum unsecured credit
recommended up to several US$ millions.
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%)