MIRA INFORM REPORT
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Report Date : |
20.06.2011 |
IDENTIFICATION DETAILS
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Name : |
AGAN CHEMICAL MANUFACTURERS LTD. |
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Registered Office : |
P.O. Box 262, Ashdod (77102), 1 Ha’ashlag Street, Northern Industrial Zone Ashdod 77520 |
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Country : |
Israel |
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Financials (as on) : |
31.03.2011 |
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Year of Establishment : |
1945 |
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Legal Form : |
Public 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 : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Good |
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Payment
Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2011
|
Country Name |
Previous Rating (31.12.2010) |
Current Rating (31.03.2011) |
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Israel |
a2 |
a2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
Company name & address
AGAN CHEMICAL MANUFACTURERS LTD.
Telephone 972 8 851 52 11
Fax 972 8 851 53 88
P.O. Box 262,
Ashdod (77102)
1 Ha’ashlag
Street
Northern
Industrial Zone
ASHDOD 77520 ISRAEL
HISTORY & LEGAL FORMATION
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 07.05.1954.
Converted into a public limited company and registered as such as per
file No. 52-003405-9 on the 17.12.1982 and 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
de-listed 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 15,065,980
shares amounting to NIS 15,065,980.00 were issued.
SHAREHOLDERS
Company is fully
owned MAKHTESHIM – AGAN INDUSTRIES LTD. (hereinafter also referred to as M.A.),
controlled (46.55%) by KOOR INDUSTRIES LTD., both public limited 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 (mainly), Isaac Manor and Livnat Family.
In January
DIRECTORS
1.
Yoav Zeiff,
2. Aviram Lahav, CFO of M.A. Group,
3. Hen Lichtenstein,
4. Morris Zelkha.
Since 1.1.2010
Erez Vigodman became M.A. Group’s General Manager and President, replacing
Avraham Biger who became M.A. Chairman.
GENERAL MANAGER
Zvi Manor (as of
February 2011).
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, K.L. TEX AND
SONS, etc.
Operating from an
owned plant on an area of 33,000 sq. meters in 1 Ha’ashlag Street, Northern
Industrial Zone, Ashdod. Also operating from M.A. Group headquarters offices
(rented, on an area of 3,870 sq. meters) 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, Italy and Greece.
Distribution through 23 marketing companies and offices worldwide.
Having some 600
employees in subject.
Having some 3,940 employees
serving the whole M.A. Group, of which 1,440 employees in Israel.
MEANS
In December
In March
Financial data is included in the consolidated financial statements of
parent company, MAKHTESHIM – AGAN INDUSTRIES LTD., which shows:
US$
(millions)
31.03.2011 31.12.2010
ASSETS
Current assets
Cash
and short term investments 328.9 423.0
Customers 741.5 582.2
Other receivables 376.6 224.0
Inventories 961.5 972.4
2,408.4 2,201.6
Long term investments 178.5 170.4
Fixed assets (net) 633.9 619.7
Deferred tax 76.3 73.5
Intangible assets, net 665.2 653.5
1,553.9 1517.1
3,962.3 3,718.7
====== ======
LIABILITIES
Current
liabilities 1,634.1 1,504.2
Long-term
liabilities
Loans from banks 84.2 74.4
Debentures 870.9 848.0
Other long-term liabilities 163.6 144.3
1,118.7 1,066.7
Equity 1,209.5 1,147.8
3,962.3 3,718.7
====== ======
Parent company
M.A. current market value US$ 2,372.1 million.
Subject is an “Approved
Enterprise” and as such enjoys tax benefits and State incentives. Israeli
Investment Centre (IIC) approved an investment plan of US$ 6 million in
subject's Ashdod plant in October 1997.
In June 2004, the
IIC 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.
ANNUAL SALES
MAKHTESHIM-AGAN
INDUSTRIES LTD.
Consolidated
Statement of Income
US$
(million)
Year
ended 31.12
2008 2009 2010
Sales 2,535.5 2,214.6 2,362.2
Gross profit 847.7 581.9 649.2
Operating income 367.3 119.7 6.2
Profit (loss) before
taxes on income 270.6 26.0 (121.2)
Net income (loss) 221.0 34.7 (131.9)
====== ====== ======
Most of M.A.’s sales are attributed to its
core activities of chemicals for the agricultural fields. Other fields, such
subject’s (and food additives, industrial chemicals, etc. carried out by other
subsidiaries), captured 7.7% of 2010 overall sales.
M.A.'s consolidated first 3 months of 2011 sales were NIS 780.54 million
(8% increase from 1stQ 2010), making a gross profit of NIS 255.46 million, an
operating profit of NIS 112.13 million and a net income of NIS 91.86 million.
Subject ended 2007
with a net profit of US$ 63,637,000 (consolidated).
Subject ended
2008 with a net profit of US$ 29,835,000 (consolidated).
Subject ended
2009 with a net loss of US$ 18,371,000 (consolidated).
Subject ended
2010 with a net loss of US$ 93,175,000 (consolidated).
OTHER COMPANIES
AGAN MARKETING
CHEMICALS LTD., 100%,
AGAN AROMA &
FINE CHEMICALS LTD., 100%, developers, manufacturers, marketers and exporters
of aroma substances for detergents.
INNOVA AROMA S.A., Switzerland, holds 50%
in NEGEV AROMA (RAMAT HOVAV) LTD.
MAKHTESHIM – AGAN
INDUSTRIES LTD., parent company, also owns some 50 subsidiaries worldwide,
including (all fully owned 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.
LYCORED LTD.,
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 M.A. Group.
DALIDAR PHARMA ISRAEL (1995) LTD.,
developers, manufacturers and marketers of photo pharmaceuticals (herbal based
remedies).
MILENIA
AGROCIENCIAS S.A.,
MAKHTESHIM AGAN
NORTH AMERICA INC.
FAHRENHEIT
HOLDINGS B.V.,
CELSIUS PROPERTY
B.V.
IRVITA PLANT
PROTECTION N.V.
ALB HOLDINGS
U.K.,
QUENA PLANT
PROTECTION N.V.
MAGAN HB B.V.
ARAGONESAS AGRO
S.A., Spain
MAGAN ARGENTINA
S.A., Argentina
MAKHTESHIM AGAN
HOLDING B.V.
MAKHTESHIM AGAN
PARTICIPACOES
MAKHTESHIM AGAN
COSTA RICA SA; MAKHTESHIM AGAN ESPANA SA; MAKHTESHIM AGAN FRANCE SARL;
MAKHTESHIM AGAN ROMANIA SRL; MAKHTESHIM AGAN THILAND LTD.; MAKHTESHIM AGAN
PORTUGAL LTD.; MAKHTESHIM AGAN ITALIA SRL; MAKHTESHIM AGAN INDIA PRIVATE LTD;
MAKHTESHIM AGAN U.K. LTD.; MAKHTESHIM AGAN POLAND SP.ZO.O; MAKHTESHIM AGAN
SWITZERLAND LTD.; MAKHTESHIM AGAN PERU SA, MAKHTESHIM ACAN HUNGARIA K.F.T.;
MAKHTESHIM AGAN SERBIA LTD; MAKHTESHIM AGAN GUATEMALA LTD; MAKHTESHIM AGAN
UKRAINE LTD; MAKHTESHIM AGAN SOUTH AFRICA PTY LTD.
MAKHTESHIM AGAN
OF NORTH AMERICA CANADA INC.
PROFICOL S.A.,
75%, holding PROFICOL ANDINA N.V. and PROFICOL VENEZUELA S.A.
C.F.M. B.V.,
Holland
MAGAN JAPAN CO.
LTD.
MAGAN ITALIA SRL
MAGAN HOLDING
GERMANY GmbH, holds 100% in FEINCHEMIE SCHWEBDA GmbH, and MAKHTESHIM AGAN
DEUTCHLAND GmbH
MAGAN KOREA CO.
LTD.
MILENIA PARAGUAY
S.A.
AGRONICA
AUSTRALASIA PTY LTD. and FARMOZ PTY LTD., Australia
EMERALD
AGROCHIMICAL COMPANY AVV
MILENIA AGRO
CIENCIAS S.A.
DEFENSA S.R.L.
KOLANT S.P.A.
BIOMARK TRADING
HOUSE K.F.T.
FCS FRANCE S.A.
FEINCHEMIE (UK)
LTD.
MA U.S. HOLDING
INC., USA
FARM SAVER GROUP
CONTROL SOLUTIONS
INC., 67%
ALLIGARE LLC, 80%
AGROVITA Spel
(SRO) (Czech Republic),
And several more
subsidiaries.
And many other companies
in the KOOR Group and I.D.B Concern.
BANKERS
Bank Leumi
Le’Israel Ltd., Tel Aviv 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 in the legal aspect, apart from several legal procedures,
including a motion for class actions (which still has to be approved by Court)
and a claim for causing noise and pollution near a village, which harms the
population. Most claims appear to be less significant, although in the latter
noise case, The Ministry of Environment is considering closing the plant at
nights.
Having ISO 9000,
9002, ISO 14001 (Environmental Management Standard) and TA-LUFT standard, GLP
German certification.
MAKHTESHIM AGAN
(M.A.) is considered as 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 terms in 2010.
M.A. 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.
Business-wise,
the global economic environment has harmed M.A. Group performance, and like
others in their branch, has been suffering from fall in demand for their
products, notably in the agricultural arena. M.A. had to go through a massive
reorganization process, including workers dismissals.
After a long
period in which parent company KOOR worked on a strategic move for M.A. (either
a major acquisition or entrance of a strategic investor), it finally announced
in late 2010 on the agreement with Chinese State-owned company and China
largest chemicals company ChemChina, in which ChemChina will acquire all of
M.A. shares held by the public (thus converting M.A. to a private limited
company), and further 7% of shares from KOOR, reaching control (60%) in M.A.
This triggered a workers’ dispute in M.A., fearing most to massive lay-off due
to the possibility that the plants will be moved to China in order to save
costs. The conflict has been resolved in the end of October 2010, with a
compromise in which
The ChemChina
deal includes, besides the sum paid for the shareholders, a non-recourse loan
of US$ 960 million for KOOR for 7 years from a Chinese bank (KOOR will mortgage
its 40% shares in M.A. in return, shares which will be transferred to ChemChina
in the end of the period if the parties would not agree otherwise). M.A.’s
senior management will remain and ChemChina will appoint the new chairman for
M.A.
The transaction
is pending final approvals. In May 2011 all Chinese government approvals were
received. Another obstacle was surmounted in mid June, with a compromise
regarding a motion for class action by M.A. shareholders from the public who
claimed the deal's original terms benefits KOOR over them. KOOR agreed to pay
further NIS 45 million to the public (a precedent compromise sum).
M.A. went during
2007 through reorganization, based on a strategic plan advised by consulting
firm McKinsey, including unifying the operations and administration of subject
and sister MAKHTESHIM CHEMICAL WORKS LTD., streamlining measures and sales
promotion.
In
In June
In
During 2004-
* 3 Agro-chemical
American Companies of the FARM SAVER Group, for a total sum of US$ 60 million.
* 67% in CONTROL
SOLUTIONS INC. (CSI), an American pesticide company, for around US$ 15 million.
* FARMOZ,
Australia 4th larges Agrochemical Company for US$ 16 million.
* 50.1% of RICECO
of the USA, developers and manufacturers of herbicides for rice growing.
* 49% of Dutch
company MABENO in shares swap deal (and later in 2008 increased stakes to 55%).
* 70% of
Hungarian distribution company BIOMARK TRADING (and later in 2007 increased
stakes to 100%).
In the framework
of its expansion program in the non-agricultural pesticide products, M.A.
acquired in 2006 shares in 2 foreign companies: 30% of ALLIGARE of the USA
(later in 2007 increased to 70% and in 2010 to 80%), and 60% of Italian KOLLANT
for US$ 15 million (in October 2008 increased stake to 100%).
In May
In November
In January
In February 2007
it was reported that the whole M.A. Group will purchase raw materials from
China during
In
In addition, M.A.
acquired in 2009 the American company BOLD FORMULATORS LLC, dealing in
formulation of products for plant protection.
In January 2009,
fire erupted in subject’s materials warehouse in Ashdod. The plant in Ashdod
continued to operate normally and the event caused no significant influence on
the Group’s activities or profitability.
M.A. has been
investing in the Indian market as a source for potential manufacturing and
marketing capabilities. M.A. launched a new distribution subsidiary, with
intention to recruit further 100 employees to the distribution activities, on
top of the Group’s 200 employees in India.
M.A. announced in
September 2009 on a strategic cooperation agreement with CIBUS GLOBAL,
according to which M.A. will invest up to US$ 37 million over five years in a
Joint Venture with CIBUS to develop proprietary crop traits in five major crops
with a European focus. Separately, in another agreement, M.A. has entered into
a Strategic Equity Alliance with CIBUS that allows M.A. to gradually acquire up
to 50.1% of CIBUS equity.
M.A. launched its
initiative for the erection of private power plants based on natural gas in subject's
plant (55mv, project is carried out by ASHDOD ENERGY) as well as in Group's
Ramat Hovav plant of 120 mw capacity, with an investment of US$ 200 million. In
December
In a momentous
move, M.A. announced in June 2010 on its biggest acquisition ever, of American
company ALBAUGH, a privately held supplier of
crop protection chemicals, for US$ 1 billion. However, in September
In October
In November
M.A. has a cooperation agreement with Swiss
partner for development, manufacturing and marketing aroma products. The joint venture,
INNOVA AROMA S.A., established jointly in 2010 new company for the erection of
a production facility in M.A. Group compound in Ramat Hovav. The erection of
the facility is conditioned in receiving the necessary authorities approvals.
SUMMARY
Good for trade engagements.
Maximum unsecured
credit recommended up to several US$ millions.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.44.93 |
|
UK Pound |
1 |
Rs.72.43 |
|
Euro |
1 |
Rs.63.62 |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
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 |
|
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 |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
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 |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
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NB |
New Business |
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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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.