MIRA INFORM REPORT

Report No. :	325773
Report Date :	09.06.2015

IDENTIFICATION DETAILS

Name :	TABACALERA DEL ESTE SA
Registered Office :	Ybyrá Pytá Esquina Mandarinas, Hernandarias, Alto Parana, 7220, Paraguay
Country :	Paraguay
Year of Establishment :	1994
Legal Form :	Joint Stock Company
Line of Business :	Subject is tobacco manufacturing industry
No. of Employee :	600

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No complaints
Litigation :	Clear

NOTES :

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ECGC Country Risk Classification List – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
Paraguay	B2	B2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

PARAGUAY - ECONOMIC OVERVIEW

Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. On a per capita basis, real income has stagnated at 1980 levels. The economy grew rapidly between 2003 and 2008 as growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based export expansion. Paraguay is the sixth largest soy producer in the world. Drought hit in 2008, reducing agricultural exports and slowing the economy even before the onset of the global recession. The economy fell 3.8% in 2009, as lower world demand and commodity prices caused exports to contract. The government reacted by introducing fiscal and monetary stimulus packages. Growth resumed at a 13% level in 2010, the highest in South America, but slowed in 2011-13 as the stimulus subsided and severe drought and outbreaks of foot-and-mouth disease led to a drop in beef and other agricultural exports. The economy took another leap in 2014, largely due to strong export growth. Political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure are the main obstacles to long-term growth.

Source : CIA

LOCATION FACTS
Government	Republic
Currency	100.00 USD = 495,712.09 PYG
Economic Risk	Low
STATUTORY INFORMATION
Order:	Tabacalera Del Este S A (TABESA)
Address in the order:	Vbyra Pyta Esquina Mandarinas Villa Conavi II 7220 Hernandarias Alto Purana, Paraguay
Legal Name:	TABACALERA DEL ESTE SA
Trade Name:	TABESA
RUT:	80008790-9
Date Created:	1994
Date Incorporated:	1994
Legal Address:	Ybyrá Pytá Esquina Mandarinas
	Hernandarias, Alto Parana, 7220 Paraguay
Operative Address:	Ybyrá Pytá Esquina Mandarinas
	Hernandarias, Alto Parana, 7220 Paraguay
Telephone:	595 631 22446
Fax:	595 631 22116
Legal Form:	Joint Stock Company
Email:	internationalsales@tabesa.com.py
Registered in:	Paraguay
Website:	www.tabesa.com.py
Contact:	José Mariano Ortíz Escauriza, Director
Staff:	600
Activity:	Tobacco Manufacturing Industry
BANK DATA
Banco Central de Paraguay
The company does not make its banking data public
HISTORY
Tabesa was established in 1994. It is part of Grupo Cartes, owned by Horacion Cartes, current president of Paraguay.
11-Sep-14
Caen cigarettes Tabesa
A shipment of cigarettes produced by the company Tabesa owned Paraguayan President Horacio Cartes, was seized on Tuesday in Brazil by members of the Federal Revenue.
Monday March 24, 2014
Foreign media Cartes linking tobacco with washing and FARC
Publications in foreign media in Colombia and Brazil, linking the tobacco President Horacio Cartes with the FARC in Colombia, the criminal gang known as "Los Urubeños" and money laundering in that country.
According to the publication , the Colombian Treasury ceases to receive more than $ 67 million a year, plus the losses in legal sales amount to 209 million dollars. "The packs of Cartes are used to wash fortunes of drug traffickers, the guerrillas the FARC and the criminal band 'Urabeños' " expresses journalistic work.
Apparently they count with invoices, false or altered export cigarettes and Mariner Ibiza, belonging to Tabacalera del Este SA (Tabesa), owned by the family of the president, Horacio Cartes.
28/04/2013
Cartes makes half the cigarettes smuggled into Argentina
The new contender Tabesa Mercosur owns the company that produces 45% of the cigarettes seized in the country. In Brazil, the Justice investigation for illegal trafficking.
According to the Federal Administration of Public Revenue (AFIP), which had PROFILE access, in 2012 and 2013, Customs seized 290 thousand packets of Rodeo, equivalent to 45% of smuggled cigarettes seized. "Many of these packages were incinerated in operations against Trout merchandise", said spokesmen for the AFIP.
PRINCIPAL ACTIVITY
Tabacalera del Este, also referred to as Tabesa, is Paraguay's largest cigarette manufacturer.
Products/Services description:	Cigarrettes
Brands:	Palermo, Eight, Ibiza, TE, Kentucky, Laredo, Bismarck, Marine, Rodeo, Santa Fe, Alabama
Clients:	TABACOS USA INC.
	USA
Suppliers:	GRUPO CELANESE S. DE R.L. DE C.V.
	Mexico
	BIMO IRPLAST SPA
	Italy
Operations area:	Tabesa currently represents 50% of total domestic production. The other companies in the industry production of other brands on the market are divided.
The company imports from	Mexico, Italy
The company exports to	USA, Argentina, Brazil
The subject employs	600 employees
Payments:	Regular
LOCATION
Headquarters :	Ybyrá Pytá Esquina Mandarinas
	Hernandarias, Alto Parana, 7220 Paraguay
Branches:	The company does not have branches
Industry:	Companies in this industry stem and redry tobacco and manufacture cigarettes and other tobacco products.
	Demand is driven by discretionary consumer spending and mitigated by awareness of the health effects of smoking. The profitability of individual companies depends on effective marketing. Large companies enjoy economies of scale in manufacturing and in their ability to offer wider ranges of products. Small companies can compete effectively through heavy discounting, through clever branding and packaging, and by exploiting niche categories such as pipe tobacco and additive-free cigarettes.
	Cigarettes account for more than 80 percent of ndustry revenue. Other products include chewing tobacco, snuff, and cigars (about 10 percent of revenue). Tobacco stemming and redrying accounts for the remainder of industry revenue. Cigarettes also dominate the global retail market for tobacco products, accounting for more than 90 percent of worldwide sales in the category. Cigars have a global market share of about 3 percent, while smokeless tobacco accounts for about 2 percent.
GROUP STRUCTURE AND SUBSIDIARY COMPANIES
Listed at the stock exchange:	NO
Capital:	NA
Shareholders %:	This is a private company. It is controlled by:
	Grupo Cartes
	Paraguay
	Grupo Cartes is a business conglomerate owned by Paraguay's president-elect Horacio Cartes.
Management:	José Mariano Ortíz Escauriza, Director
	Mabel MaríA Larese Vera, Director
	CéSar Cabral Centurión, Director
	José MaríA Cases Ribalta, Director
	Sarah Cartes, Director
Related Companies:	Tabacos del Paraguay S.A.
Sister Companies:	Aerocentro
	Ganadera Sofia
	Banco Amambay
	Tabacos del Paraguay
	Habacorp Cigar Trading
	Chajhá
	Ganadera Las Pampas
	Bebidas del Paraguay
	Distribuidora del Paraguay
	Paraguay Soccer
	Consignataria de Ganado
	Agrocitrus del Paraguay
	Tabacos USA
	Fundacion Rampon T Cartes (philanthropic)
	Sporting Life
	Transporte Multimodal del Paraguay
	La Mision
	Bebidas USA
	Fundacion Ñande Paraguay
FINANCIAL INFORMATION
The company does not make its financial statements public.
Exports 2013 US FOB	31 982 907.85
	Tabacalera del Este SA (Tabesa) per month produces 3,000,000 cigarettes with specifications that meet the different versions of the 15 brands markets. This productivity is maintained at an employment rate of 24 hours which stops only four times a year.
LEGAL FILINGS
There are no legal connected to the subject
SUMMARY
Tabacalera del Este, also referred to as Tabesa, is Paraguay's largest cigarette manufacturer.
The company has 21 years of experience in the Paraguayan market and its brand Kentucky operates a large part of the country’s total market.
It is owned by the current Paraguayan president’s group and has high amounts of tax constibutions to the country.
There are several press releases which links the president and this company to ilegal proceedings.
RISK INFORMATION
DEBTS	Controlled
PAYMENTS	Regular
CASH FLOW	Good
STATUS	Active
INTERVIEW
NAME	NA
POSITION	Administrative
COMMENTS	He confirmed address, manager, brands and group owner.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.64.11
UK Pound	1	Rs.97.84
Euro	1	Rs.71.12

INFORMATION DETAILS

Analysis Done by :	RAS
Report Prepared by :	ASH

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%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.