|
Report No. : |
310192 |
|
Report Date : |
10.03.2015 |
IDENTIFICATION DETAILS
|
Name : |
ARAB POTASH
COMPANY LTD (APC) |
|
|
|
|
Registered Office : |
APC Building, 6 Al Jaheth Street, Shmeisani, P O Box: 1470, Amman 11118 |
|
|
|
|
Country : |
Jordan |
|
|
|
|
Financials (as on) : |
31.12.2013 (Consolidated) |
|
|
|
|
Date of Incorporation : |
07.07.1956 |
|
|
|
|
Com. Reg. No.: |
1795, Amman |
|
|
|
|
Legal Form : |
Public Shareholding Company |
|
|
|
|
Line of Business : |
Production of
potash by-products, such as bromine soda and table salt. |
|
|
|
|
No. of Employees : |
2,467 |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
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 – December 31, 2014
|
Country Name |
Previous Rating (30.09.2014) |
Current Rating (31.12.2014) |
|
Jordan |
B1 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
JORDAN - ECONOMIC OVERVIEW
Jordan's economy is among the
smallest in the Middle East, with insufficient supplies of water, oil, and
other natural resources underlying the government's heavy reliance on foreign
assistance. Other economic challenges for the government include chronic high
rates of poverty, unemployment, inflation, and a large budget deficit. Since
assuming the throne in 1999, King ABDALLAH has implemented significant economic
reforms, such as opening the trade regime, privatizing state-owned companies,
and eliminating some fuel subsidies, which in the last decade spurred economic
growth by attracting foreign investment and creating some jobs. The global
economic slowdown and regional turmoil, however, have depressed Jordan's GDP
growth, impacting export-oriented sectors, construction, and tourism. In 2011
and 2012, the government approved two economic relief packages and a budgetary
supplement, meant to improve the living conditions for the middle and poor
classes. Jordan's finances have also been strained by a series of natural gas
pipeline attacks in Egypt, causing Jordan to substitute more expensive diesel
imports, primarily from Saudi Arabia, to generate electricity. Jordan is
currently exploring nuclear power generation in addition to the exploitation of
abundant oil shale reserves and renewable technologies to forestall energy
shortfalls. In 2012, to correct budgetary and balance of payments imbalances,
Jordan entered into a $2.1 billion, multiple year International Monetary Fund
Stand-By Arrangement. Jordan's financial sector has been relatively isolated
from the international financial crisis because of its limited exposure to
overseas capital markets. In 2013, Jordan depended heavily on foreign
assistance to finance the budget deficit, as the influx of about 600,000 Syrian
refugees put additional pressure on expenditures.
|
Source
: CIA |
Company Name : ARAB
POTASH COMPANY LTD (APC)
Country of Origin : Jordan
Legal Form : Public
Shareholding Company
Start Date : 7th
July 1956
Registration Date : 18th
March 1983
Commercial
Registration Number : 1795,
Amman
Issued Capital : JD
83,317,500
Paid up Capital : JD
83,317,500
Total Workforce : 2,467
Activities :
Production of potash by-products, such as bromine soda and table salt.
Financial Condition : Fair
Payments :
Nothing detrimental uncovered
Operating Trend : Steady
ARAB POTASH COMPANY
LTD (APC)
Building : APC Building
Street : 6 Al Jaheth Street
Area : Shmeisani
PO Box : 1470
Town : Amman 11118
Country : Jordan
Telephone : (962-6) 5666165 / 5666166 / 5666167 /
5665116 / 5674376 / 5200520
Facsimile : (962-6) 5692855 / 5674416 / 5687289 /
5200080
Email : info@arabpotash.com / apc@nol.com.jo
Subject operates
from a suite of owned offices covering an area of 2,000 square metres that are
located in the Central Business Area of Amman.
Branch Office
(s)
Location Description
·
Aqaba Owned
processing plant
Tel: (962-3) 2017054
Fax: (962-3) 2014441
Name Position
·
Jamal
Ahmad Mofleh Al Sarayrah Chairman
·
Mansour
Bin Sulaiman Bin Ibrahim El Mebrek Deputy
Chairman
·
Ahmad
Jamal Nawwaf Al Bataineh Director
·
Rami
Saleh Abdulkareem Wraikat Director
·
George
David Delaney Director
·
Michael
Terence Hogan Director
·
Dr
Duried Mohammad Abd Al Hameed Al Mahasneh Director
·
Adnan
Ahmed Rashed Al Rashdan Director
·
Abdul
Ghani Fakri Abdul Wahab Al Jaafar Director
·
Imad
Jamal Ahmed Al Qudah Director
·
Nidal
Faeq Mohammad Al Qubbaj Director
·
Dr Maen
Fahad Abdul Karim Nsour Director
·
Dr
Jamal Saed Salah Director
·
Abdul
Wadoud Abdul Sattar Mahmoud Al Dulaimi Director
·
Abdul
Al Hakeem Ali Al Ajnaff Director
·
Fahid
Majid Al Sultan Al Salim Director
·
William
Keith Thornton General
Manager
·
Roderick
Joseph McEachern Deputy
General Manager
·
Julie
Ann Fortunato Finance
Manager
·
Jaafar
Mohamed Hafeth Salem Marketing
Manager
·
Adnan
Sulaiman Faris Al Ma’aitah Human
Resources Manager
Date of Establishment : Subject’s
operations date back to 7th July 1956, however it was registered on
18th March
1983.
Legal Form :
Public Shareholding Company
Commercial Reg. No. : 1795, Amman
Issued Capital : JD 83,317,500
Paid up Capital : JD 83,317,500
·
Potash
Corp (PCS) 28.00%
Canada
·
Jordan
Ministry of Finance 26.90%
·
Arab
Mining Company 20.00%
·
Social
Security Corporation 5.20%
·
Islamic
Development Bank 5.10%
Jeddah
Saudi Arabia
·
Government
of Iraq 4.70%
·
Libyan
Arab Foreign Investment Co 4.10%
·
Kuwait
Investment Authority 3.90%
·
Private
Sector 1.50%
·
Other
Arab Governments 0.60%
Subject is a member of the APC Group Of Companies, which consists of the
following concerns:
Name Stake Held
·
Arab
Fertilizers & Chemical Industries (KEMAPCO) 100%
·
Jordan
Dead Sea Industries 100%
PO Box: 212307
Amman 11121
Tel: (962-6) 4618571
Fax: (962-6) 4619125
·
Numeira
Mixed Salts & Mud Company Ltd 100%
PO Box: 941681
Amman 11118
Tel: (962-6) 5683892 / 5683637
Fax: (962-6) 5672346
Email: info@numeira.com.jo
·
Jordan Magnesia
Company Ltd (JORMAG) 55.3%
PO Box: 941701
Amman 11194
Tel: (962-6) 5691201 / 5691202 / 5691203
Fax: (962-6) 5691156
Email: info@jormag.com
·
Jordan
Bromine Company 50.0%
·
Kemira
Arab Potash Company 50.0%
·
Jordan
Industrial Ports Company 50.0%
·
Jordan
Investment and South Development Company 42.0%
·
South
Development Company for Industrial 22.0%
Equipment & Workshops
·
Nippon
Jordan Fertiliser Company Ltd 20.0%
·
Jordan International
Chartering Company 20.0%
Activities: APC
extracts salts and chemicals by way of evaporating from the Dead Sea water and
produces potash by-products such as bromine soda and table salt.
APC’s plant at Ghor Al Safi began producing granular potash on a
commercial basis in September 1983, utilising giant evaporation pans and a
special process refinery. The project was conceived on the basis of certain
natural advantages, such as the large potash reserves in the Dead Sea, estimated
at 2 billion tonnes, with nearly 800 million tonnes recoverable by existing
processing methods.
The plant’s production capacity increased from 1.1 million tonnes in
1986 to 2.0 million tonnes by the beginning of 2000. The construction of the
plant cost US $ 465.8 million against an original estimate of US $ 430 million,
the additional expense being mainly due to a change in the design required to
produce granular potash that conformed to the standards laid down in the
international marketplace.
APC has a policy of expanding services and supply to markets expected to
show substantial demand growth. Its main markets are India, China, and
Malaysia, and these are expected to continue to contribute to more than 60% of
APC's exports. All three markets have witnessed major restructuring in the
Fertilizer sector and APC continues to update its approach to sales within them
thus emphasizing its commitment. Indonesia, Korea, Spain and Taiwan are markets
which are of non lesser importance and are serviced through contracts and
active local representatives.
In 1999, the company obtained the ISO 14001
certification for environment.
On 8th March 2004, subject signed an agreement to supply
Petrokimia Gresik of Indonesia with their potash requirements for the next 3
years. The quantities involved range from 130,000 MT in 2004 to 230,000 MT in
2006.
On 14th March 2004, APC signed the 2004 MOP supply contract
with Sinochem. The contract calls for the supply of 200,000 MT plus an option of
100,000 MT this calendar year. This is in addition to the 100,000 Mt already
shipped in 2004 from the 2003 contract.
In January 2005 APC reached an agreement with Sinochem, which stipulates
that APC will supply Sinochem during the current year with a quantity of
150,000 Mt of MOP plus a mutual option of 100,000 Mt on an FOB Aqaba basis.
This contract is a continuation of the Long Term Supply Contract between the
two parties covering the period 2004-2006. The price for this contract period
was adjusted according to the latest market conditions and in line with
Sinochem's recent MOP purchases from other producers worldwide. The approximate
value of this contract ranges between US$ 20 million and up to US$ 36 million
if all the optional quantities are exercised.
Expansion Projects
APC intends to increase its annual Potash production capacity by 450
thousand tons from 2.0
million tons per year to 2.45 million tons per year. The design work and
preparation of tender documents by Hatch-Dar Al-Hadassah for this project
commenced during March 2005 and included the following major tenders:
a- Modification of the Solar Ponds System and Construction of New
Carnalite Ponds: The contractor
completed the works in July
2009.
b. New Safi Warehouse Project: This project increases the Potash storage
capacity at Safi by about
40,000 tons. The project was
completed in 2008.
c. Extension of Aqaba Warehouse: This project increases the Potash
storage capacity of the Aqaba
Warehouse by about 75,000
tons.
d. Construction of a New Cold Crystallization Plant
New Intake Pumping Station Project at the Dead Sea
Since it began operations, APC has constructed two pumping stations, one
in 1982 and a second
station in 1997. Due to continuous decrease in the water level of the
Dead Sea, APC decided to
construct a new pumping station to supply a sufficient quantity of brine
to the solar ponds to
support the current expansion and any future expansion. Studies and
design work was awarded
during 2008 to Dar A-Handasah.
Production
Capacity: 2008 – 2.0 million tons
2009 – 1.1
million tons
2010 – 1.9
million tons
2011 – 2.3
million tons
2012 – 1.8
million tons
2013
– 1.7 million tons
Customers:
·
IPL India
·
Sinochem China
·
Zuari India
·
Kemapco Jordan
·
Petrokimia
Gresik Indonesia
·
Agrifert Malaysia
·
Behn
Meyer Malaysia
·
CCM Malaysia
·
JBC Jordan
·
Union
Harvest Malaysia
Import Countries
: Germany, the United
Kingdom and the United States of America.
Export Countries
: Around 60 percent of
output is exported to India, China, and Malaysia with the rest going to
Indonesia, Philippines, Taiwan, Japan, Korea, Brazil, Spain, France,
Italy, Portugal, Turkey and African
countries.
Operating Trend: Steady
Subject has a
workforce of 2,467 employees.
Financial
highlights provided by local sources are given below:
Currency: Jordanian
Dinars (JD 000)
Consolidated
Balance Sheet 31/12/13 31/12/12
ETS
Non-current assets
Property, plant
and equipment 333,947
379,001
Projects in
progress 26,928
17,957
Investment in
associates and joint ventures 87,023
78,876
Financial assets
at fair value through other
comprehensive
income 920
714
Deferred tax
assets 3,748
3,846
Employees’
housing loans 26,109
23,341
478,675 503,735
Current assets
Employees’
housing loans 2,299
2,276
Accounts
receivable 52,480
78,958
Inventories 53,126
60,332
Spare parts and
supplies 54,040
48,327
Other current
assets 67,565
60,289
Cash on hand and
bank balances 304,437
329,536
533,947 579,718
TOTAL ASSETS 1,012,622
1,083,453
EQUITY AND LIABILITIES
Equity
Paid in capital 83,318
83,318
Statutory reserve
50,464
50,464
Voluntary reserve
80,699
80,699
Fair value
reserve 263
57
Retained earnings
671,744
749,377
Total Equity 886,488
963,915
Non-current liabilities
Long-term loans 119
1,198
Miscellaneous
provisions 7,354
7,159
Other non-current
liabilities 14,000
12,873
21,473 21,230
Current liabilities
Current portion
of long term loans 1,228
6,529
Potash mining
fees due to the government of
the Hashemite
Kingdom of Jordan 5,949
6,578
Trade payables
and other accruals 36,324 26,835
Income tax
provision 10,187
20,050
Other current
liabilities 50,973
38,316
104,661 98,308
Total Liabilities 126,134
119,538
TOTAL EQUITY AND LIABILITIES 1,012,622
1,083,453
Consolidated
Income Statement
Sales 521,209
586,268
Cost of sales (337,913)
(285,557)
Gross profit 183,296
300,711
Administrative
expenses (15,061)
(22,106)
Selling and
distribution expenses (17,094)
(16,338)
Royalty to the
Government of Jordan (25,949)
(49,883)
Operating profit 125,192
212,384
Finance revenue 15,822
15,724
Donations
expenses (10,074)
(9,838)
Finance costs and
bank charges (3,233)
(3,344)
Other income 883
1,856
Other expenses (796) (336)
Net foreign
currency exchange differences 851
142
Profit before tax and gain from associates and
joint ventures 128,645
216,588
Company’s share
of profit of associates and joint
ventures 19,511
12,548
Revaluation of
Islamic Development Bank loan for
Jordan Magnesia
Company and reversed provisions (283)
(109)
Loss for Jordan
Magnesia Company -
(489)
Profit before tax 147,873
228,538
Income tax
expense (17,212) (29,716)
Profit for the year 130,661 198,822
Local sources
consider subject’s financial condition to be Fair.
·
Arab
Land Bank
King Faisal Street
PO Box: 8 & 68
Amman
Tel: (962-6) 4638161
Fax: (962-6) 4637082
·
ANZ
Grindlays Bank
Shmeisani Branch
PO Box: 9997
Amman
Tel: (962-6) 4660201
Fax: (962-6) 4679115
·
Arab
Bank Plc
Shmeisani Branch
PO Box: 950545 & 950544
Amman 11195
Tel: (962-6) 5607231 / 5607115
Fax: (962-6) 5606793 / 5606830
Subject’s payment record
is reported to be met in a generally prompt manner.
Credit amount 31,000 23,000
Amount overdue 0 0
Payment terms 30
days 30
days
Payment Method Letters
of Credit Letters
of Credit
Paying record Prompt Prompt
Currency Deutsch
Marks Pounds
Sterling
Arab Potash Company
(APC) was formed to develop the minerals of the Dead Sea and is currently
producing potash and salt. It is Jordan’s largest industrial company and the
second most valuable company quoted on the Amman Financial Market (AFM). Jordan
currently has an approximate 5 percent share of the world potash market and APC
has diversified its sales and currently sells regularly in 30 countries.
During the course
of this investigation nothing detrimental was uncovered regarding subject’s
operating history or the manner in which payments are fulfilled. As such the
company is considered to be a fair trade risk.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.62.62 |
|
|
1 |
Rs.94.39 |
|
Euro |
1 |
Rs.67.96 |
INFORMATION DETAILS
|
Analysis Done by
: |
RAS |
|
|
|
|
Report Prepared
by : |
NIT |
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.