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GLG Final Deck

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Stephen Li

on 19 April 2010

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Transcript of GLG Final Deck

Grupo Los Grobo Our Crush On Soy Group One Tiffany Cho, Vivian Choi, Andrew Hsiang Michael Kim, Stephen Li, Mi-Jean Shin Los Grobo Operations in Argentina, Uruguay, Paraguay, and Brazil
Leases land, contracts farmers, markets outputs
In 2009:

Enterprise Value: US$500M 670,000 acres
soybeans, grains, corn, and wheat
US$750M in sales Soybean Crushing Process using expeller-pressing method Industry Analysis 87% of global soybean production is crushed
The four largest soybean producing countries:
- United States
- Brazil
- Argentina
- China
- lowest cost producer of soybean
- largest soybean oil producer
Competitive Landscape Competition in Argentina Costs & Benefits New Customer Base CHINA
Largest soy trading partner
Growing demand for soy crush products

Second largest consumer
- Also growing demand for soy crush products
Insufficient domestic crush production
- Soymeal exports down 22% to 2.5 mil. tons/year
- Soy crush product imports up 48%
Construction Project Location - Port San Pedro
Positive spillover effects
- Existing port
- Construction and operating permits
- Transportation infrastructure
Proximity to Buenos Aires
Expected construction duration - 14 months
Financing International Finance Corporation - 20%
Latin American and European banks - 50%
ABN AMRO Bank - Netherlands
BNP Paribas - France
Commerzbank - Germany
Inter-American Development Bank - US/Latin America
Individual investors/private investment - 30% Legal Issues President Kirchner hostile to agriculture industry
- Soy tax rate almost raised by 9%
- Faced hedging risk and local futures
market closures
Approximately one year for government approval
28 procedural requirements to construct a plant Break-Even Analysis Sensitivity Analysis Key Takeaways Implementation $$$ Financial Analysis Discount rate: 20% 80% of Price 100% of Price 120% of Price Utilize Economies of Scale
Develop Value Chain Diversify Product Line
Manage risk
Improve profitability
Open the door to the future Competitive advantage
Extend value adding chain
Vertical integration
Product diversification
Q & A Market
Cost / Benefit
Financial analysis
Full transcript