New Silkroutes Group inks a deal with Chinese shipbuilder unit

NSG's unit will import oil and petroleum products for the Chinese firm.

New Silkroutes Group (NSG) has signed a memorandum of understanding (MOU) with China Shipbuilding Industry Equipment and Materials Co., to procure crude oil and petroleum products for the state-owned capital goods supplier and to explore collaboration in China and Singapore.

Beijing-headquartered CSEMC is part of China Shipbuilding Industry Corporation (CSIC), one of the country's largest conglomerates.

CSEMC has more than 20 billion yuan (approximately US$3 billion) in assets and operates in major cities across China.

Under the MoU, NSG's wholly owned subsidiary International Energy Group (IEG) will seek to bring high-quality oil and petroleum products into China for CSEMC. On its part, CSEMC will provide the necessary support to help IEG realise its plans for managing and owning oil storage facilities. As part of the MoU, CSEMC will set up a company in Singapore to work with IEG.

Singapore-based IEG is NSG's biggest revenue driver. It expects to generate more than US$225 million in revenue by the end of NSG's financial year ending 30 June 2017, up from US$49.6 million for FY2016.

The expected increase will be driven by credit facilities worth US$110 million obtained from several international banks. These lines will increase IEG's trade financing options and allow it to structure more profitable trades. IEG's FY2017 revenue forecast assumes a monthly turnover of more than US$18 million.