Noble Group, a global supply chain manager of agricultural, industrial and energy products, has acquired 100% of Usina Petribu Paulista (UPP), a sugar mill company in South Brazil, Sao Paulo State, with a total crushing capacity of 2mn tons of sugar cane and capable of producing both sugar and ethanol.
The mill has been designed for an easy upgrade to 4mn tons of sugar cane crushing capacity within a short period of time, or 600,000 tons of sugar or 88mn gallons of ethanol annually.
Noble will invest up to US$200mn in this project over the next few years and will expand its crushing capacity to up 10mn tonnes of cane. As part of the same transaction, Noble will also acquire 100% of Meridiano, a company which owns land and various relevant licences.
“This is a strategic investment for Noble in Brazil, the world’s lowest cost producing country for both sugar and alcohol and the biggest sugar producer and exporter in the world,” says Noble Group COO Ricardo Leiman.  “These assets form part of our global ethanol network where we have assets and distribution in the US, ethanol processing operations in the Caribbean, and physically move 10% of Brazilian ethanol exports. We continue to look into expanding our sugar and ethanol investments in Brazil and globally.”
This project also creates additional value for Noble in the logistics sector in Brazil as well as the obvious beneficial increases in Noble’s trading possibilities for sugar and alcohol for both the domestic and export markets.
The aggregate consideration to be paid by Noble for the above acquisitions was US$70mn which will be subject to certain post closing adjustments. Such consideration value was determined on a willing-buyer, willing-seller basis, taking into consideration the net tangible assets of both companies as at December 31st 2006 of approximately US$70mn. The consideration is funded from Noble’s internal cash resources and bank borrowings.
Through its investment in UPP and Meridiano, Noble is one step closer towards its vision of controlling its own sugar and ethanol global supply chain, and fulfilling its medium-to long-term strategy.
This transaction is in the normal course of business and accordingly not material for the purposes of Chapter 10 of the Listing Manual of the Singapore Exchange Securities Trading Limited.