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Tokyo, Oct. 31 Rubber futures on the Tokyo Commodity Exchange lost further ground Tuesday morning, expanding losses toward the end of the morning session.
Bullrun,
Yes, from the scheme of the arrangement, it would seem they will consolidate the output from the small holders. So, it would seem they will have control of the market in the area the operate.
Perhaps we can look into the value added of 'bulk latex' and processed sheets...SMR. From that, we can ascertain the approx turnover and approximate the bottomline. Will revert when I have time to look into this ....probably over the weekend.
Bullrun,
Sorry, don't have sufficient info/data at this time to do an est.
But, as mentioned in the announcement, it will have no impact on FY06 results.
........with the kind of explosion in automobile industry that is occurring in India, the country's import dependence on rubber would escalate unless other alternatives are explored in time.
http://www.blonnet.com/2006/10/25/stories/2006102500281100.htm
Latest announcement
GMG GLOBAL LTD
(Incorporated in Singapore)
(Co. Reg. No. 199904244E)
MEMORANDUM OF UNDERSTANDING RELATING TO THE ACQUISITION OF 51% SHAREHOLDING INTEREST IN PT. BUMI JAYA IN INDONESIA
The Board of Directors of GMG Global Ltd ("GMG" or the "Group") wishes to announce that GMG has entered into a memorandum of understanding (the "MOU") with PT. Bumi Jaya ("PTBJ") and its three existing shareholders, whereby the parties have set out their intention for GMG to take up a 51% equity stake in PTBJ.
PTBJ is an Indonesian company and owns a newly set-up natural rubber processing plant (the "Processing Plant") situated in the Tanjung area, Tabalong District, South Kalimantan. The Processing Plant has an annual processing capacity of 30,000 tons and is expected to go into commercial production in the first half of 2007. The Processing Plant is situated in an area that has an annual supply of approximately 26,000 tons of natural rubber from smallholders plantings and this would meet the bulk of the Processing Plant?s raw materials needs. The Processing Plant is also strategically located where natural rubber from Central and East Kalimantan, being key supply areas which have a total annual supply of approximately 66,000 tons of natural rubber, could be sourced and transported.
The MOU sets out the general terms and conditions under which GMG will eventually own 51% of PTBJ?s enlarged issued and paid-up share capital following the issue of new shares in the capital of PTBJ (the "Proposed Transaction"). GMG will also have the exclusive marketing and sales right for all the products of PTBJ ("Products"). The MOU shall take effect from 25 October 2006 and shall continue in force for a period of six (6) months or until the date on which a definitive joint venture agreement takes effect, whichever is earlier, unless extended by mutual written agreement.
The MOU provides that, subject to various terms and conditions, upon completion of the Proposed Transaction, GMG will pay PTBJ a total of US$3,500,000 in cash as follows:
(i) a sum of US$2,500,000 for the purchase of new shares in the capital of PTBJ representing an aggregate of 51% of the total issued and paid-up share capital of PTBJ; and
(ii) a sum of US$1,000,000 for the exclusive right to market and sell the Products, to be paid as follows:
- (a) US$500,000 at the end of the first 6 months of operation of PTBJ; and
- (b) the balance US$500,000 at the end of the first 12 months of operation of PTBJ.
As long as GMG holds an equity stake of more than 50% in PTBJ, PTBJ shall pay GMG marketing and sales fees equivalent to 3% of the value of the Products sold.
The Proposed Transaction is subject to, amongst other things, completion and satisfactory outcome of all financial and legal due diligence investigations by GMG, negotiation and execution of a definitive joint venture agreement and all other transaction related documentation, no material adverse change in the financial condition, operations, business, assets, properties or prospects of PTBJ and all necessary approvals and consents from all governmental authorities and third parties (including pre-emption) being obtained.
GMG?s proposed investment in PTBJ is part of its growth strategy in the natural rubber industry and falls within its philosophy to invest in and operate processing plants in near-to-supply source areas which is conducive to smallholders and middlemen, as well as in an area having growth potential in future supplies. This investment will serve as its first step towards its growth strategy to increase and diversify the Group?s production and sales, as well as paving the way for its geographical expansion plan. GMG will continue to look at other strategic opportunities.
As there is no certainty whether GMG will proceed with the Proposed Transaction, GMG?s shareholders and investors are advised to exercise caution when dealing in GMG?s shares. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor, accountant or other professional advisers.
GMG will make such further announcements relating to the Proposed Transaction when appropriate.
The Proposed Transaction is not expected to have any material impact on the earnings per share or the consolidated net tangible assets per share of the Group for the financial year ending 31 December 2006.
None of the Directors or substantial shareholders of GMG has any direct or indirect interest, other than their shareholdings in GMG, in the Proposed Transaction.
By Order of the Board
GMG GLOBAL LTD
Rubber industry regains its shine
THE negative perception of rubber being a sunset industry is fast diminishing given its exciting prospects.
http://biz.thestar.com.my/news/story.asp?file=/2006/10/23/business/15754521&sec=business
Hi shplayer
thanks for your fast reply. will wait for price to run up
terencefok,
It is too small a company to be on the radar screens of the big boys in this current bull market. Furthermore, because of the market cap, it is only required to make half year reporting.......so they will be silent for this round of 3Q reporting. It will probably come to life in Mar/Apr 07 when FY06 reporting season gets going.
As long as rubber prices remain at this level, my assesment of the stock vis my post of 9 Oct on this thread remains. Bear in mind, their profit for HY 06 is already about 50% mor than FY05. For me, I will accumulate on further price weakness as I believe the fundementals remain positive.
I guess, patience is the name of the game with this stock.
Kottayam , Oct. 23. The rubber market flared up on Monday. RSS 4 moved up to Rs 92 a kg from Rs 90. Lingering rains continued to depress the latex production putting immense pressure on the buyers.
Kottayam , Oct. 22. The rubber market has become vibrant once again as the prices have touched Rs 90 a kg, registering an increase of Rs 5 in the last couple of days.
| 18/10/2006 per 100 Kg | |||||
| BANGKOK | |||||
| CATEGORY | IN RS | ||||
| Price | Change | Price | Change | ||
| RSS-1 |  |
8,706.00 | +73.00 | ||
Tokyo, Oct. 17. Rubber futures on the Tokyo Commodity Exchange gained further ground Tuesday.
Kottayam , Oct. 14. Covering groups took further initiative to lift the physical rubber prices in the weekend session.