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Report Date : |
24.11.2012 |
IDENTIFICATION DETAILS
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Name : |
AGAN CHEMICAL
MANUFACTURERS LTD. |
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Registered Office : |
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Country : |
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Financials (as on) : |
30.09.2012 |
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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, i.e. plant growth regulators, plant
protection chemicals, herbicides, etc. |
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No. of Employees : |
600 |
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 : |
Satisfactory |
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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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
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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 |
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Source : CIA |
AGAN CHEMICAL MANUFACTURERS LTD.
Telephone 972 8 851 52 11; 851 53 46
Fax 972 8 851 53 88
Northern
Industrial Zone
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).
Authorized share capital
50,000,000 ordinary shares of
of which 15,065,980 shares amounting to
Company is fully owned by MAKHTESHIM – AGAN
INDUSTRIES LTD. (hereinafter M.A.), owned by:
1.
CNAC INTERNATIONAL PTE LTD., 60%, of Singapore,
fully owned by CHINA NATIONAL AGROCHEMICAL CORP. (“ChemChina”), a People's
Republic of China company,
2.
KOOR INDUSTRIES LTD., 40%, a public limited
company, shares traded on the Nasdaq Stock Exchange and TASE, controlled by publicly
traded I.D.B. HOLDING CORP. LTD. (mainly via DISCOUNT INVESTMENT CO. LTD.),
controlled by Nochi Dankner (mainly), Isaac Manor and Avraham Livnat.
On the 17.10.2011 a transaction was completed,
according to which ChemChina acquired 52.3% of M.A's shares held by the public
for US$ 1,270 million plus 7% of the shares held by KOOR for US$ 168 million,
according to a value of US$ 2.4 billion for M.A. (transaction was carried on in
a way of a reverse tri-angle merger). Following the deal completion, M.A.
became a private limited company and shares were de-listed from trade on TASE
(on 17.10.11), although its bonds are still publicly traded.
1. Aviram
Lahav, CFO of M.A. Group,
2. Chen
Lichtenstein, Deputy Managing Director of M.A.,
3. Morris Zelkha,
4. Elhanan
Avramov, V.P. Global Resources of M.A.
Yang Xingqiang of ChemChina is M.A. Group’s
Chairman.
Erez Vigodman is M.A. Group’s General
Manager and President.
Zvi Manor.
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.
M.A. exports 96% 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, TAGAD CHEMICALS, SHANKOL
MARKETING, HOLLAND-MORAN, DEPOTCHEM, etc.
Operating from an owned plant in 1 Ha’ashlag
Street, Northern Industrial Zone, Ashdod, on 242,000 sq. meters plot on which
41,600 sq. meters built (in addition leasing further 7,000 sq. meters). Also
operating from M.A. Group headquarters offices (rented, on an area of 3,870 sq.
meters) in
M. A. Group also operates from 2 plants in
Distribution through 23 marketing companies
and offices worldwide.
Having over 600 employees in subject.
Having 4,072 employees serving M.A. Group (as of
end of 2011), of which 1,374 employees in
MEANS
In December 2006, March 2009 and January 2012
M.A. completed a capital raise of
The ChemChina transaction includes, besides
the sum paid for the shareholders, a non-recourse loan of US$ 960 million for
KOOR for 7 years from Import & Export Bank of China, where KOOR will
mortgage its 40% shares in M.A., shares which will be transferred to ChemChina
in the end of the period if the parties would not agree otherwise). Loan
agreement was signed in July 4th, backed by HSBC Bank. According to
the agreement, M.A. will go public within the next 3 years in one of the
foreign exchanges (Hong Kong,
Financial data is included in the
consolidated financial statements of parent company, MAKHTESHIM – AGAN
INDUSTRIES LTD., which shows:
US$ (millions)
31.12.2011 30.09.2012
ASSETS
Current assets
Cash and short
term investments 420.5 425.7
Customers 523.7 686.3
Other receivables 216.0 236.6
Inventories 1,060.4 1,149.4
2,220.6 2,498.0
Long term investments,
loans & debit 114.0 101.7
Fixed assets, net 660.5 698.3
Deferred tax 78.1 74.0
Intangible assets, net 692.6 698.4
1,545.2
1,572.4
3,756.8 4,070.4
====== ======
LIABILITIES
Current liabilities 1,536.0 1,482.5
Long-term liabilities
Loans from banks 139.4 151.8
Debentures 687.1 929.1
Other long-term liabilities 161.7 149.8
988.2 1,230.7
Equity 1,241.6 1,357.2
3,756.8 4,070.4
====== ======
In December 2010 M.A. was forced to ask waivers
from its bankers concerning not meeting certain financial covenants, which the
banks accepted and M.A met the new covenants. M.A's Brazilian subsidiary
MILENIA suffered heavy losses due to mounting competition and the global
economic crisis and had to go massive re-organization – M.A wrote-off US$ 120
million in 2010 in this regard. Recovery in MILENIA's activities has been noted
in 2011 statements.
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
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.
REVENUES
MAKHTESHIM-AGAN INDUSTRIES LTD.
Consolidated Statement of Income
US$ (million)
Year ended 31.12
2009 2010 2011
Sales 2,214.6 2,362.2 2,691.4
Gross profit 581.9 649.2 841.5
Operating income 119.7 6.2 243.1
Profit (loss) before taxes on income 26.0 (121.2) 126.8
Net income (loss) 34.7 (131.9) 120.7
====== ====== ======
Most of M.A.’s
sales are attributed to its core activities of chemicals for the agricultural
fields. Other fields (food additives, industrial chemicals, etc.) captured 7%
of 2011 overall sales.
MAKHTESHIM – AGAN
IND. consolidated sales for the
first 9 months of 2012 were US$ 2,255 million (5% increase compared to the
parallel period in 2011), making a gross profit 740.9 million, an operating
profit of US$ 278.6 million, and a net profit of US$ 144.5 million.
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).
Subject ended 2011 with a net profit of US$
54,403,000 (consolidated).
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, among them (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 M.A. Group's non-agro
activities (e.g. natural food additives, micro encapsulation
of natural health materials).
NEGEV AROMA (RAMAT HOVAV) LTD., 50%, a plant
for manufacturing aroma products for the cosmetic field.
DALIDAR PHARMA
ISRAEL (1995) LTD., developers, manufacturers and marketers of photo
pharmaceuticals (herbal based remedies).
MILENIA AGROCIENCIAS S.A., main Brazilian
subsidiary,
MAKHTESHIM AGAN NORTH AMERICA INC., main
American subsidiary,
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 AGAN 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.
KOOR INDUSTRIES LTD., holding company, with other subsidiaries besides
M.A. Group, 70.1% owned by DISCOUNT INVESTMENT CO. LTD. (DIC), also publicly
traded on TASE, with many subsidiaries.
I.D.B. HOLDING CORP. LTD. (IDB Group) is controlled by:
1. GANDEN HOLDINGS LTD., 54.9%, controlled (69%) by
Nochi Dankner (mainly) and his sister Ms. Shelly Bergman (also holds 4%
directly in IDB), a foreign trust fund on behalf of the Shimel family (10%) and
Avi Fischer (9%),
2. Avraham Livnat (& sons Zvi, Zeev and Shay),
12.4%,
3. Isaac & Mrs. Ruth Manor, 10%, both latter
shares held via holding firms.
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.
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 recent 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 2011.
Business-wise, the global economic crisis
harmed M.A. Group performance, and like others in their branch, suffering from
fall in demand for their products, notably in the agricultural arena. Notably,
M.A faced a crisis in Brazil, one of its main markets, following harsh
competition and some limitations recently imposed on sales of Brazilian
subsidiary MILENIA. M.A had to go through a massive reorganization process,
including workers dismissals. As seen in recent financial results, Group's
performance improved significantly, including an improvement in MILENIA's
results.
M.A. also expects to complete in the 2012
3rdQ the inspection of its business vis-à-vis ChemChina, towards acquiring
parts as a leverage for entering the Chinese market, valued US$ 4 billion.
After a long period in which parent company
KOOR worked on a strategic move for M.A. in terms of ownership, in late 2010 it
signed an agreement with Chinese State-owned largest chemicals company
ChemChina, to acquire control of M.A.
That 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 was resolved in October
2010, with a compromise, where 200 of M.A. employees will voluntarily retire,
no layoffs and production will continue in Israel at least till mid 2017.
KOOR Group remains a minority shareholder
(40%) in subject. KOOR (current market value US$ 620 million) is part of the
IDB Group, a local leading concern,
controlled by Nochi Dankner, one of the most influential in Israel with
many holdings in various sectors in the local market.
IDB has been facing
serious liquidity problems due to high leverage with money being raised during
hey days before the eruption of the global economic crisis, and in view of the current slow-down in local economy and weak overseas markets, IDB became heavily indebted, with its public holdings market value plunging
dramatically. In addition, due to public pressure and regulatory
constraints, IDB Group is obliged in going through
corporate structural changes. IDB has already started a process, which includes
offering for sale chunks of their holdings to become more liquid.
In its Q2-2012 report, IDB
received a "going concern" note by its CPA, following a loss of 1.27
billion in 2ndQ2012, a deficit of NIS 1.65 billion in equity and accumulated debt
of NIS 1.9 billion to creditors, bond owners and banks.
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 increased to 80%), and 60%
of Italian KOLLANT for US$ 15 million (in October 2008 increased stake to
100%). In May
In 2006 M.A. acquired 75% of Czech
distributing company AGROVITA (in 2009 reached 100%), and in parallel completed
the establishment of a new subsidiary in Russia, in the framework of expanding
penetration into the Eastern European markets, where M.A. Group sees large
potential for its agro-chemical products.
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.
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.
In October
In November
In June
2011 M.A signed an exclusive license agreement with Italian ISAGRO, for using
the Italian company's developed active substance.
In sake of major saving in energy costs,
M.A. launched its initiative for the erection of private power plants based on
natural gas in subject's plant (project is carried out by ASHDOD ENERGY) (also
in MAKHTESHIM CHEMICALS plant), with an investment of US$ 200 million. In March
2011 subject started operating its 55mW power plant in Ashdod site.
In December
In April 2012 EMG announced M.A. on
annulling the gas supply (due to political motives). M.A. has been
contemplating alternative sources (as well as its position in front of EMG due
to the breach of agreement).
M.A. has a cooperation agreement with Swiss partner FIRMENICH for
development, manufacturing and marketing aroma products. The joint venture,
called NEGEV AROMA, established jointly in 2010 and is erecting a production
facility in M.A. Group compound in Ramat Hovav (currently in test-run phase),
with investment of US$ 34 million.
Good for trade engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.55.34 |
|
|
1 |
Rs.88.29 |
|
Euro |
1 |
Rs.71.36 |
INFORMATION DETAILS
|
Report Prepared
by : |
PDT |
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 |
|
-- |
NB |
New Business |
-- |
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.