Download - Marubeni 20120530 gavilon_eng
May 30, 2012
Acquisition of Gavilon
Acquisition of Gavilon – May 30, 20122
Agenda
1. Gavilon Overview
2. Gavilon Business Segments
3. Grains
4. Fertilizer
5. Energy
Acquisition of Gavilon – May 30, 20123
1. Gavilon Overview
• Headquarters: 11 ConAgra Drive, Omaha, Nebraska, USA
• Overview: US-based, leading grains, fertilizer and energy trader with more than 300 storage facilities and offices worldwide; Gavilon became the third largest grain operation behind ADM and Cargill following the 2011 DeBruce Companies acquisition
• Established: Private investors formed Gavilon and acquired ConAgra Trade Group in June 2008
• Net Assets: US$ 1,909 million
• Sales: US$ 17,852 million
• Equity Holders: Ospraie Fund and Ospraie Special Opportunities Fund, General Atlantic, Soros Fund Management and Gavilon Management
• Employees: 1,943
Acquisition of Gavilon – May 30, 20124
2. Gavilon Business Segments
• Grains: Operates a strategic distribution network with more than 140 grain facilities across North America and the third largest grains storage network in the US with distribution marketing offices in Australia, Ukraine and Brazil
• Fertilizer: Operates one of the largest US wholesale fertilizer networks with 74 storage and handling facilities across the US, Mexico, South America and Africa with storage capacity of 1.2
million tons and handling volume of 6 million tons
• Energy: Operates a trading business mainly dealing in crude oil, natural gas and fuels which is operated through a vast logistics network that includes 8 million barrels of crude oil storage capacity, 10 billion cubic feet of natural gas storage capacity and 500,000 barrels of refined products storage capacity
2011 Sales US$ 17,852 Employees 1,943
Grains2011 Sales US$ 14,555Employees 1,326
Fertilizer2011 Sales US$ 2,907Employees 311
Energy2011 Sales US$ 390Employees 124
Risk Control / Risk Management
Transportation / Logistics
Acquisition of Gavilon – May 30, 20125
3. Grains
Strengths in Grains
• Third largest storage network (8.3 million tons) and over 140 grain facilities in the US
• Major US handler of grain ingredients (wheat products, corn products, DDGS, etc.)
• Operates in key global markets, such as Australia, Ukraine and Brazil
Significance of the Transaction
• Expansion of the platform in the US, which is the largest grain market in the world
• Creating a major grains player, with combined handling volume of more than 55 million tons
• Continued ability to maintain and provide a steady source of grains
Wichita Facility
• 852,000 metric tons storage
• 363 bins stretching one-half mile
• shuttle loader capability
Acquisition of Gavilon – May 30, 20126
3. Grains – Significance of US Market in Global Grains Trade
0
200
400
600
800
1,000
1,200
Top 5 exporters after US (Argentina,Australia, Brazil, Canada, Russia)
US
Grains Demand(million tons)
Note: Includes volumes for corn, wheat, soybeanSource: Food and Agricultural Policy Research Institute
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
US Rest of World
20112011
Grains Production(million tons)
Acquisition of Gavilon – May 30, 20127
3. Grains – US Grain Majors (Storage Capacity)
Source: Grain & Milling Annual 2011
10.49.5
9.08.3 8.1
6.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
ADM Marbeni +Gavilon
Cargill Gavilon Bunge CHS
Acquisition of Gavilon – May 30, 20128
3. Grains – Growth Strategy Post-Acquisition
• Establish a competitive global grain network with Gavilon’s North American operations and Marubeni’s global distribution channels
Producers Origination and Supply
Transportation and Logistics Storage Export Sites Marketing and
Distribution Customers
Strength in origination and supply
Strength in global distribution, especially in China
Global Grains Trade Supply Chain
Purchase grain and ingredients from farmers, co-ops, processors and other merchants earning origination margin
Merits of scale when shipping freight (railroad, barge, etc.)
Store and blend product to meet customer quality requirements and earn elevation, blending, storage and carrying charges
Profit from two export terminals; Columbia Grain –100% owned by Marubeni; Kalama Export Company –45% owned by Gavilon
Distribute to growing developing world markets and Japan; capture sales margins
Acquisition of Gavilon – May 30, 20129
4. Fertilizer
Strengths in Fertilizer• One of the largest fertilizer wholesale networks in the US• Continuous relationships with more than 1,800 global leading suppliers and customers• Leveraging its own market intelligence through grains, ingredients and fertilizer markets
Significance of the Transaction• Building up the fertilizer value chain through collaboration with Helena• Expansion of the trading and distribution business, and acceleration of fertilizer product manufacturing,
including fertilizer raw materials
Jamestown Facility
• 38,100 metric tons of dry fertilizer storage
• 20,000 short tons of liquid storage complete in June
• Share site with grain facility
Acquisition of Gavilon – May 30, 201210
4. Fertilizer – Growth Strategy Post-Acquisition
• Synergy with Helena – significant North American fertilizer market supplier
• Expansion of fertilizer distribution – international trading / distribution, inter-relationship between grain
and fertilizer demand growth
US Fertilizer Market
Gavilon (Fertilizer) HELENAFertilizer Volume US (4 million tons), Outside US (2 million tons) US (2.8 million tons)
2011 Sales US$ 2.9 billion US$ 3.7 billion
5%(2 mil MT)
Trader owning import terminals
Domestic(North
America)30 mil MT
Import10 mil MT
Total 40 mil MT
20%(8 mil MT)
15%(6mil MT)
Farmer / C
o-ops
60%(24mil MT)
Supplier Wholesaler Retailer End User
Large retailer owning import and domestic
river terminalsTrader / Whole
saler owning import and domestic river
terminals Small – Mid retailer not owning terminals
Acquisition of Gavilon – May 30, 201211
5. Energy
Strengths in Energy• Vast logistics network, that includes 8 million barrels of crude oil storage capacity, 10 billion cubic feet of
natural gas capacity, and 500,000 barrels of refined products storage capacity• Sophisticated risk management capability grounded in sound governance structure
Significance of the Energy Business Acquisition and Growth Strategy• Expansion of our crude oil, refined products, and natural gas trading , marketing and distribution
business in North America• Growth via increased storage assets and further development of stable fee and margin businesses from
existing assets
Cushing Facility
• 4.14 million barrels of storage capacity
• 14,000 barrels per hour of pipeline throughput capacity
• Access to NYMEX delivery point