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Report Date : |
09.01.2014 |
IDENTIFICATION DETAILS
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Name : |
REMICON JSC |
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Registered Office : |
Hera Business Center Building Peace Avenue, 5th Khoroo Gurvaljin Bridge, Bayangol District P.O.Box No 16081 Ulaanbaatar |
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Country : |
Mongolia |
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Financials (as on) : |
30.09.2011 |
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Date of Incorporation : |
2008 |
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Com. Reg. No.: |
9010001071 |
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Legal Form : |
Limited Liability Company |
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Line of Business : |
Manufacturers of ready mixed concrete, construction materials, concrete panels and cement blocks. |
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No. of Employees : |
115 |
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 – September 30, 2013
|
Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
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Mongolia |
C1 |
C1 |
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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 |
MONGOLIA - ECONOMIC OVERVIEW
Mongolia's extensive mineral deposits and attendant growth in mining-sector activities have transformed Mongolia's economy, which traditionally has been dependent on herding and agriculture. Mongolia's copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, among others, have attracted foreign direct investment. Soviet assistance, at its height one-third of GDP, disappeared almost overnight in 1990 and 1991 at the time of the dismantlement of the USSR. The following decade saw Mongolia endure both deep recession, because of political inaction and natural disasters, as well as economic growth, because of reform-embracing, free-market economics and extensive privatization of the formerly state-run economy. The country opened a fledgling stock exchange in 1991. Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation in regional economic and trade regimes. Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit hard by the global financial crisis. Slower global economic growth hurt the country's exports, notably copper, and slashed government revenues. As a result, Mongolia's real economy contracted 1.3% in 2009. In early 2009, the International Monetary Fund reached a $236 million Stand-by Arrangement with Mongolia and the country has largely emerged from the crisis with better regulations and closer supervision. The banking sector strengthened but weaknesses remain. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi mine, considered to be among the world's largest untapped copper deposits. Recent calls by nationalist politicians to renegotiate the investment agreement, however, have called into question the attractiveness of Mongolia as a destination for foreign direct investment. Negotiations to develop the massive Tavan Tolgoi coal field face similar obstacles. The economy grew by 6.4% in 2010, 17.5% in 2011, and by more than 12.3% in 2012, largely on the strength of commodity exports to nearby countries and high government spending domestically. Mongolia's economy, however, faces near-term economic risks from the government's loose fiscal policies, which are contributing to high inflation, and uncertainties in foreign demand for Mongolian exports. Trade with China represents more than half of Mongolia's total external trade - China receives more than 90% of Mongolia's exports. Mongolia purchases 95% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases. Due to severe winter weather in 2009-10, Mongolia lost 22% of its total livestock, and meat prices doubled. Inflation remained higher than 10% for much of 2010-12, due in part to higher food and fuel prices. The economic slowdown in China during 2011-2012 resulted in fewer Mongolian exports, a widened trade gap, and decreased government revenues, putting pressure on Mongolian fiscal policy. Remittances from Mongolians working abroad, particularly in South Korea, are significant
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Source
: CIA |
REMICON JSC
Building : Hera Business Center Building
Street : Peace Avenue, 5th Khoroo
Area : Gurvaljin Bridge, Bayangol District
P.O.Box No.: 16081
Town : Ulaanbaatar
Country : Mongolia
Telephone : (976 70) 123 333 / Mobile (976 99) 114 676
Fax : (976 70) 123 333
E-Mail : admin@remicon.mn / info@remicon.mn
Remicon XK
Name Position
1. Tsognemekh Galnemekh Chief Executive Officer
2. Ms. Urangoo Assistant to Tsognemekh Galnemekh
Total Employees : 115
No complaints have been heard regarding payments from local suppliers or banks.
We consider it is acceptable to deal with subject for MEDIUM amounts,
although it is normal accepted practice for international suppliers to deal on secured terms with Mongolian importers.
Trade risk assessment: Normal
US$ 5 million EBRD loan to Remicon to produce more concrete in
On 1 July 2013, (www.ebrd.com): Mongolia is today one of the fastest growing economies in the world. The country is entering a “cement-intensive” phase in its development as it prepares for large infrastructure projects. The EBRD continues its support of local manufacturers of building materials with a new US$ 5 million loan to Remicon JSC, a Mongolian producer of ready-mixed concrete.
The loan will finance the expansion of the company’s production facilities, namely the instalment of a second production line and a mobile concrete batching plant, including distribution mixer trucks.
“Remicon is just the type of company we want to see grow in Mongolia: a local, dynamic medium-sized business which takes advantage of the mining boom to increase production and create jobs,” said the EBRD’s First Vice President and Chief Operating Officer, Phil Bennett, signing the deal in Ulaanbaatar. “Mongolia is ready to build and produce more locally; the EBRD is supporting that drive, with the highest number of our projects in the country being in the manufacturing sector,” he added.
Remicon JSC is a leading ready-mixed concrete producer, based in the capital Ulaanbaatar, which started operating in 2008. It is a subsidiary of Hera Holding LLC, a construction and mining holding company, and is publicly traded on the Mongolian Stock Exchange.
The Chairman of Remicon JSC, Mr. Kh. Gankhuyag, said during the signing of the loan agreement: “With Mongolia consistently ranked as one of the fastest growing economies in the world, we’re seeing a commensurate demand for construction materials in the building and infrastructure sectors. With the support of the EBRD we will be in a position to expand our production capacity and invest in training of additional skilled workers, which will enable us to make an even more significant contribution to our country’s development.”
Since commencing its operations in Mongolia in 2006, the EBRD has invested almost US$ 1 billion in 56 projects in various sectors of the Mongolian economy, of which the majority were in the non-mining sectors, and 18 individual projects were in the manufacturing and services sector. All of the projects have been in the private sector, engaging with companies owned by Mongolian businessmen and women.
The EBRD last week approved a new country strategy for Mongolia which emphasises diversification and private sector participation in infrastructure projects.
NAME : TRADE AND DEVELOPMENT BANK OF MONGOLIA
Branch : Juulnchny Gudamj 7
Town : Ulaanbaatar 210646
Telephone: (976 11) 312 362 / 331 133
Fax : (976 11) 325 449
The company also has an account with the following banks:
1. Golomt Bank of Mongolia
Main Branch
Bodi Tower, Sukhbaatar Square
Ulaanbaatar
Telephone: (976 11) 311 530
Fax : (976 11) 312 307
2. Khan Bank of Mongolia
Peace Avenue
P.O Box-185
Ulaanbaatar-51
Telephone: (976 11) 457 880
Fax : (976 11) 457 880
The following balance sheets as at 30 September 2011 showed (latest available):
1 Jan 2011 30 Sep 2011
(in TUGRIK)
ASSETS
Current Asset
Cash and cash equivalent 425,363,450.06 944,129,059.19
Short term investment - -
Devaluation - -
Accounts receivable 813,244,874.67 3,277,014,449.31
Allowance for bad debts - -
Other receivable 16,727,931.03 64,742,196.11
Inventory 90,415,225.13 865,725,773.98
Work in process - -
Prepayment (870,001.35) 126,557,346.12
Total Current Asset 1,344,881,479.54 5,278,168,824.71
Fixed asset 4,850,393,928.70 6,351,989,201.62
Accumulated depreciation (886,707,420.73) (1,190,731,447.53)
Other fixed assets - -
Building under construction 584,900.00 584,900.00
Intangible asset 1,037,748,677.50 2,537,948,677.50
Total Fixed Assets 5,002,020,085.47 7,699,791,331.59
TOTAL ASSET 6,346,901,565.01 12,977,960,156.30
LIABILITY
Current Liability
Accounts payable 13,980,450.55 3,560,185,217.19
Salaries Payable - 5,043,372.00
Corporate income tax 55,442,396.66 190,387,453.19
VAT payable - 233,426,710.19
Social & health insurance payable (646,391.12) 14,545,309.62
Other payables 3,564.00 -
Unearned revenue 250,000.00 250,000.00
Total Current Liabilities 69,120,020.09 4,003,838,062.19
Long Term Liabilities
Long term notes payable - -
Long term loans - -
Long term bonds payable - -
Other payables - -
Allowance for long term liabilities - -
Total Long Term Liabilities - -
Total Liabilities 69,120,020.09 4,003,838,062.19
Stockholders' Equity
Share : а) government
b) private 1,579,075,886.00 -
Treasury stock - 7,867,946,406.00
Total stock 1,579,075,886.00 7,867,946,406.00
Additional paid-in capital - -
Other capital 5,048,820,200.00 -
Retained earnings (350,114,541.08) 1,106,175,688.11
Current year 421,683,126.18 1,556,042,552.39
Prior period (771,797,667.26) (449,866,864.28)
Total Stockholders' Equity 6,277,781,544.92 8,974,122,094.11
TOTAL LIABILITIES & SHAREHOLDERS
EQUITY 6,346,901,565.01 12,977,960,156.30
The following cash flow statement as at 31 December 2011 showed :
31 Dec 2010 31 Dec 2011
(in TUGRIK)
Cash flows from operating activities
Cash inflow 5,216,787,334.70 13,611,164,335.17
Cash sales and collections
from customers 5,216,697,933.81 13,589,424,335.17
Cash from supplementary service
and manufacturing 89,400.89 21,740,000.00
Cash outflow (4,810,478,187.46) (16,041,106,021.31)
Employees' salary payment (210,668,551.40) (344,299,380.49)
Social Security tax payment (63,909,656.00) (96,360,094.48)
Merchandise purchase (6,108,255.45) (706,877,705.30)
Cash paid for utility expenses (23,701,723.00) (37,623,645.00)
Fuel, petrol, transportation fee,
spare part purchase (40,295,560.00) (121,137,644.00)
Other payments to suppliers (4,434,253,841.61) (14,488,768,173.63)
Paid interest (8,580,800.00) (560,000.00)
Tax payments (22,959,800.00) (245,479,378.41)
Net cash from operating
activities 406,309,147.24 (2,429,941,686.14)
Noncurrent asset acquisition (4,679,540.00) (200,000.00)
Net cash from investing
Activities (4,679,540.00) (200,000.00)
Cash flows from financing
Activities (10,166,640.50) -
Cash from stock issuance - 1,240,050,320.00
Bank loan - 1,522,276,487.50
Loan payment - (541,321,037.50)
Donations (10,211,507.00) -
Current portion payment of long
term liabilities - (132,325,858.00)
Interest income 44866.5 4839405.11
Currency exchange difference - (41,511,958.94)
Net cash from financing
activities (10,166,640.50) 2,052,007,358.17
Net cash movement 391,462,966.74 (378,134,327.97)
Cash & cash equivalent at
the beginning of period 33,900,483.32 425,363,450.06
Cash & cash equivalent at
the end of period 425,363,450.06 47,229,122.09
Sales Turnover : TUGRIK 778,000,000.00 - 2009 - exact
: TUGRIK 4,710,892,217.53 - 2010 - exact
: TUGRIK 12,281,492,472.85 - 2011 - exact
Net Profit (before tax) : TUGRIK (73,857,659)- 2009 - exact
: TUGRIK 471,114,968.84 - 2010 - exact
: TUGRIK 2,348,682,844.22 - 2011 - exact
The following financial information applies to subject’s affiliated company, Hera Investment LLC (latest available):
Sales Turnover : US DLRS 1,500,000 - 2005 - exact
: US DLRS 3,000,000 - 2006 - exact
: US DLRS 10,000,000 - 2007 - exact *
: US DLRS 11,000,000 - 2008 - exact
: US DLRS 15,000,000 - 2009 - projected
Profit Before Tax : not given but stated to be 20% - 30%
Financial year ends
31 December.
The following financial information applies subject’s affiliated company, Hera Equipment LLC:
Sales Turnover : TUGRIK 16,180,078,468.52 - 2009 - exact
: TUGRIK 45,972,019,897.70 - 2010 - exact
: TUGRIK 107,537,885,205.21 - 2011 – exact *
Net Profit : TUGRIK 508,596,802.83 - 2009 - exact
: TUGRIK 3,915,702,918.52 - 2010 - exact
: TUGRIK 15,703,222,729.21 - 2011 – exact *
Total Capital Investment : TUGRIK 4,691,216,464.03 (as of March 2012)
Total Value of Stock Held : TUGRIK 3,486,743,304.50 (as of March 2012)
Total Value of Current Contracts : TUGRIK 36,154,739,347.16 (as of March 2012)
* A significant increase in sales turnover in 2011 was attributed to favorable market conditions and expansion of the business.
Financial year ends 31 December.
Date Started : 2008
C.R. No. : 9010001071
Tax No.: 5191823
Capital : TUGRIK 7,867,946,406.00
Limited Liability Company with the following shareholders :
Percentage
1. Gankhuyag Khassuuri 50.8%
2. Frontier LLC 12.3%
3. Gauli LLC 11.3%
4. More than 1,000 minority shareholders 25.6%
Affiliated companies of the subject company :
Associates
1. Hera Investment LLC
Hera Business Center Building
Peace Avenue, 5th Khoroo
Gurvaljin Bridge, Bayangol District
P.O.Box No.: 16081
Ulaanbaatar
Telephone : (976 70) 182 121
Fax : (976 70) 182 121
E-Mail : khassuuri@hera.mn
Managing Director : Gankhuyag Khassuuri
Est.: 21 August 2003
C.R. No. : 9011091053
Tax No: 2787687
2. Hera Equipment LLC
Hera Business Center Building
Peace Avenue, 5th Khoroo
Gurvaljin Bridge, Bayangol District
P.O. Box No.: 16081
Ulaanbaatar
Telephone: (976 70) 182 131 / 112 121 / 821 121 / 182 191 / 330
535 / (976 99) 108 030 (Batkhuyag Ganbold) / (976 99) 034 587 /
(976 99) 110 305 (Khassuuri Gankhuyag) /
Fax : (976 70) 182 161 / 182 171
E-Mail : batkhuyag@hera.mn / khassuuri@hera.mn
Website : www.hera.mn
Managing Director : Batkhuyag Ganbold
Employees : 150
Principal Banker : Trade and Development Bank of Mongolia
Est.: 18 November 2004
C.R. No. : 9011058017
Tax No.: 2858614
Capital : TUGRIK 1,000,000
Sole Shareholder:
- Khassuuri Gankhuyag - 100%
(Trading as importers, wholesalers, retailers and distributors of
heavy machines such as excavators, tractors and spare parts)
3. Hera Foods LLC
Hera Business Center Building
Peace Avenue, 5th Khoroo
Gurvaljin Bridge, Bayangol District
P.O. Box No.: 16081
Ulaanbaatar
Telephone: (976 70) 182 141 / (976 91) 924 422 / (976 99) 119 954
Fax : (976 70) 182 161
E-mail : foods@hera.mn
4. Hera Mining Service LLC
Hera Business Center Building
Peace Avenue, 5th Khoroo
Gurvaljin Bridge, Bayangol District
P.O. Box No.: 16081
Ulaanbaatar
Telephone: (976 70) 112 121 / (976 99) 117 930 / (976 75) 752 121
Fax : (976 70) 182 161
5. Hera Construction LLC
8th Khoroo, 11th Khoroolol
Ulaanbaatar
Telephone: (976 75) 752 161
E-mail : administration@heraconstruction.mn
6. Bluebus LLC
20th Khoroo, Teeverchdiin gud, Avtobus-2 HK-niy Bayr
Ulaanbaatar
Telephone: (976 11) 632 756 / 632 201
E-mail : bluebusmn@yahoo.com
7. Ar Zam LLC
Hera Business Center Building
Peace Avenue, 5th Khoroo
Gurvaljin Bridge, Bayangol District
P.O. Box No.: 16081
Ulaanbaatar
Mobile : (976 99) 101 595
Fax : (976 70) 182 161
E-mail : sansarbold@hera.mn
Website: www.arzam.mn
8. Beli Medved LLC
20th Khoroo, Teeverchdiin gud, Hera Industrial Park
Ulaanbaatar
Telephone: (976 70) 124 353 / (976 99) 101 560 / (976 99) 105 718
Website : www.polar.mn
The Company is involved in the following activities :
Manufacturers of ready mixed concrete, construction materials, concrete panels and cement blocks.
Subject also leases heavy equipment and trucks.
Imports from South Korea, Thailand and Germany.
Subject does not export, all sales are domestic.
The Company has the following facilities :
30 sq. m. rented administrative offices located at the heading address as well as owned a manufacturing unit (2,500 sq. m.) with warehouse facilities (300 sq. m.) located at 20th Micro-District, Songinkhairkhan District, Ulaanbaatar.
Subject formerly used the following contact details:
Mobile: (976 99) 100 567 (Enkhbayar Munkhsaikhan) / (976 99) 081 343 (Altansukh Chuluunbat)
E-Mail: e_monhsaihan@yahoo.com / munkhsaikhan@remicon.mn
The address which you provided: KHOROO 20, SONGINKHAIRKHAN DISTRICT, ULAN BATOR applies to subject's branch office address. Please note that subject's administrative office address is as per heading.
The telephone number which you provided: +976 99 022 458 is could not be identified. Please note that subject's correct telephone numbers are as per heading.
Interviewed: Tsognemekh Galnemekh (Chief Executive Officer).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.62 |
|
|
1 |
Rs.10 |
|
Euro |
1 |
Rs.8 |
INFORMATION DETAILS
|
Report Prepared
by : |
NIS |
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 |
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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 |
|
<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.