You won't believe how much Noble, Wilmar splurged on sugar assets

Here's the story behind it.

According to CIMB, Noble made its foray into the sugar midstream business with the acquisition of Usina Petribu Paulista (UPP), a South Brazil sugar mill company in Sao Paulo state, for USD70mn in 2007. 

UPP had total sugarcane milling capacity of ~2mn tonnes per annum at the time of acquisition, which was upgraded to 5mn tonnes per annum over the next three to four years.

Here's more from CIMB:

Noble started its second sugar mill in Meridiano, Sao Paulo, Brazil with annual milling capacity of 4.5mn tonnes in 2010.

Noble became a major midstream sugar player with the acquisition of two sugar mills in Brazil in 2010 for USD950mn.

The two mills, with combined milling capacity of 8mn tonnes per annum, increased Noble’s sugar production capacity by 84% to 17mn tonnes per annum.

Wilmar announced its sugar foray with the acquisition of Sucrogen Limited (known today as Wilmar Sugar) in Australia in 2010 for USD1.5bn. Sucrogen accounts for ~2mn tonnes of raw sugar production per annum through its seven mills.

With the Sucrogen acquisition, Wilmar also earned a 75% stake in three refineries in Australia and New Zealand with total refining ncapacity of ~1mn tonnes per annum.

One month after the Sucrogen acquisition, Wilmar announced its second sugar acquisition when it bought a 100% stake in Indonesian refinery PT Jawamanis Rafinasi (JMR) for USD50mn.

JMR operates a sugar refinery in Cilegon with a throughput of 1,000 tonnes per day. In June 2011, Wilmar beat China’s COFCO to buy a 100% stake in Prosperine Sugar Mill for ~USD122mn.

The purchase boosted Wilmar’s milling capacity by 2mn tonnes per annum. In August 2011, Wilmar went on to acquire PT Duta Sugar International, an Indonesian sugar refiner, at a value of USD105mn.

The most recent sugar acquisition by Wilmar was announced on 20 February 2014 as the much-awaited stake purchase in Shree Renuka Sugar (SHRS IN). In a threepronged deal (new stake, open offer and rights issue), Wilmar is likely to end up with a ~35-40% stake in the Indian sugar player by paying c.USD150mn.

SHRS owns seven mills in India and five in Brazil, with total annual milling capacity of 22mn tonnes.