Noble Group, a global supply chain manager of agricultural, industrial and energy products, has signed an agreement to purchase two soybean processing facilities in mainland China.


One plant, located in Fuling, Chongqing municipality, will be purchased from Singaporean company Great Wall Investments. The second plant, located in Longkou, Shangdong province, will be purchased from another Singaporean company, Sino Agri-Trade. The group will purchase 100% of the shares in both soybean crushing and soybean and palm oil refining ventures.


The aggregate consideration to be paid by Noble for the acquisition is approximately US$18mn which will be subject to certain post-closing adjustments. The consideration will be funded from Noble’s internal cash resources and bank borrowings.


The amount of consideration was determined on a willing-buyer, willing-seller basis, taking into consideration the net asset value of the companies. The book value of the assets to be acquired by Noble was approximately US$34mn as at October 13, 2006.


This represents the group’s third investment in soybean processing in mainland China this year, after it had acquired a plant in Qinzhou, Guangxi province in April. The three acquisitions join the group’s portfolio of three soybean crushing facilities in India and leased crushing capabilities in Turkey and Egypt. The group plans to expand its soybean crushing capacity globally.


Subject to certain pre-conditions being met, the agreement is expected to close in 2006.


This transaction is not material for the purposes of Chapter 10 the Listing Manual of the Singapore Exchange Securities Trading Limited.


Commenting on the news, Noble Group COO Ricardo Leiman says: “These acquisitions further strengthen Noble’s soybean supply chain. Complementing the soybean crushing and refining facility in Qinzhou, Guangxi that we acquired earlier this year, these facilities will enable us to supply a wider range of customers in China with feed ingredients and edible oils,” he adds.


Chongqing is situated at the confluence of Yangtze River and Jialing River. It is the most populous of China’s four provincial-level municipalities, and the only one in the less densely populated western half of China. The municipality of Chongqing has a registered population of more than 31.4mn people as of 2005, most of them living outside the urban area of Chongqing proper, over hundreds of square kilometers of farmland.


Shandong Province is situated in the lower reaches of the Yellow River, covering an area of 150,000 square kilometres and is China’s second most populous province with 91.8mn people. The nominal GDP for Shandong was Rmb1.55tn (US$192.3bn) in 2004, ranking it second in the country (behind Guangdong and ahead of Jiangsu).