Hainan State Farms Investment Holding Group Co Ltd, owner of China’s largest natural rubber plantation base, is accelerating its pace of globalization through international acquisitions, according to Li Dongming, a senior official with the company. “We will focus our efforts in seeking partners in especially the Southeast Asian countries,” he said while was responding to the media about the company’s latest deal with an Indonesian company over the weekend…Full Article: ECNS.cn Aug 2017

Key Points

  • China is the world’s largest consumer of natural rubber, averaging 39% of  global consumption.
  • In August 2017, Singapore’s R1 International, a subsidiary of Hainan State Farms, purchased a 45% equity stake in Indonesia’s PT Kirana Megatara and a 62.5% equity stake in Singapore’s Archipelago Rubber Trading. PT Kirana Megatara is Indonesia’s largest producer of crumb rubber [i.e. recycled rubber from used automotive tires]. As a result of the investments, Hainan State Farms boosted their annual rubber production capacity by 720,000 MTs of rubber.

ChinaAg Comments

  • In November 2016, Guangdong Guangken Rubber Group announced it would launch an IPO for its Thailand-based operations in 2018 or 2019. The company would list on stock exchanges in Thailand and Hong Kong. At the same time, it was also noted that China’s annual rubber demand totaled 4.8 million MTs, but only the country only had an annual output of 800,000 MTs.
  • In August 2016, Guangdong Guangken Rubber Group acquired a 60% stake in Thai Hua Rubber for CNY 1.2 billion (~$174 million). Guangdong Guangken Rubber Group’s processing capacity in mainland China totals 200,000 MTs per year while Thai Hua Rubber’s domestic capacity totals 1 million MTs per year. Guangdong Guangken Rubber Group had received a CNY 500 million [US$72.4 million] investment from the China Agricultural Industry Development Fund and Cinda Asset Management.
  • In July 2016, SinoChem acquired a 30.07% stake of Halcyon Agri Corporation’s (SGX:5VJ). At the same time Halcyon Agri acquired Sinochem’s natural rubber processing/trading assets in China and Malaysia.
  • In January 2016, SinoChem was looking into acquiring Halcyon Agri Corporation (SGX:5VJ), a Singaporean company that operates 14 rubber processing facilities in Indonesia and Malaysia.
  • In June 2015, representatives from China’s SinoChem (state-owned) traveled to Thailand to negotiate the rubber contract.
  • In April 2015, China reportedly agreed to purchase/import 200,000 MTs of rubber from Thailand.
  • From 2006 to 2011, Chinese imports of natural rubber steadily increased, with Thailand, Malaysia, Indonesia, Vietnam, and Myanmar as the top suppliers. Import volumes surpassed 2 million MTs in 2011 after being relatively stable at 1.6 million to 1.8 million MTs from 2006 to 2010.
  • Founded in 2005 and headquartered in Haikou, Hainan Island, China Hainan Rubber Industry Group (SHA:601118) is a producer and distributor of natural rubber. In January 2011, the company was listed on the Shanghai Stock Exchange. As of mid-2017, the company had an annual production capacity of 400,000 MTs of rubber.
  • Incorporated in July 2001 and headquartered in Singapore, R1 International Pte. Ltd. is a trading company that specializes in natural rubber, synthetic rubber, and latex concentrate. The company has subsidiaries in Malaysia, Thailand, Japan, India, and mainland China. China Hainan Rubber Industry Group owns a controlling stake (i.e. 75% as of 2017) in R1 International.

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