WILMAR INTERNATIONAL LIMITED 1 CORPORATE PRESENTATION 14 DECEMBER - - PDF document

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WILMAR INTERNATIONAL LIMITED

CORPORATE PRESENTATION

14 DECEMBER 2006

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Presentation Overview

• Introduction
• Proposed merger with Kuok Group’s plantation,

edible oils, grains and related businesses

• Proposed acquisition of the edible oils, grains and

related businesses of Wilmar Holdings Pte Ltd (“WHPL”), including interests held by ADM group (“ADM”)

• Rationale for the proposed acquisitions
• Questions & answers

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Introduction

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Creation of one of the largest listed companies in Singapore by market capitalisation

• Proposed merger with Kuok Group’s plantation, edible oils,

grains and related businesses (“KG Merger”) – Voluntary general offer of Bursa Malaysia-listed PPB Oil Palms Berhad (“PPBOP”) – 65.8% stake in PGEO Group Sdn Bhd (“PGEO”) – 100.0% stake in Kuok Oils & Grains Pte Ltd (“KOG”)

• Proposed acquisition of the edible oils, grains and related

businesses owned by WHPL, including interests held by ADM (“IPT Acquisitions”)

• Proposed KG Merger and IPT Acquisitions will create one of the

Asia’s leading agribusiness group and one of the largest listed companies on SGX-ST by market capitalisation

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Proposed US$2.7b KG Merger

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• Listed on Bursa Malaysia with a market capitalisation of approx

RM4.0b as at 13 Dec 06

• Principally engaged in oil palm cultivation and milling
• Owns a 34.2% stake in PGEO

US$364.1m US$339.5m NTA US$30.9m US$36.9m Net profit 9M06 FY05 PPBOP

Proposed US$1.1b voluntary general offer for PPBOP Background Information

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• Landbank in East Malaysia (Sabah and Sarawak) and

Indonesia

Proposed US$1.1b voluntary general offer for PPBOP Background Information

67,475 Mature area harvested (ha) Mill production 1,081,309 FFB production (MT) 300,063 Crude palm oil (MT) 61,360 Palm kernel (MT) As at 30 Sep 2006 Plantation statistics 96,114 363,405 Landbank (ha) Total planted area (ha)

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• Voluntary general offer (“VGO”) for all the issued shares in

PPBOP

– Share exchange ratio of 2.3 new Wilmar shares for every 1 PPBOP share – 55.6% held by PPBG

• Exploring with CIMB Group for possible arrangement to allow

PPBOP shareholders to receive cash at a price to be determined

• VGO is subject to, inter alia, Wilmar shareholders’ approval

Proposed US$1.1b voluntary general offer for PPBOP Purchase Consideration & Approval

1,024.5m

• No. of new shares to be issued

US$1.1b Consideration

Based on 100% acceptance of the VGO

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• Flagship company responsible for the processing and trading of
• ils & grains products under the Kuok Group of companies
• Processing facilities located in China, Malaysia, Indonesia,

Vietnam, New Zealand, the Netherlands and Germany

Proposed US$1.2b acquisition of a 100% stake in KOG Background Information

US$293.3m US$205.2m NTA US$62.6m US$15.1m Net profit 9M06 FY05 KOG

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• 3 key areas of KOG’s business in China

– Consumer packs oil

• Leading consumer packs manufacturer and distributor where its

“Arawana” brand is the No. 1 brand in China

• Sales volume in excess of 1m tonne in 2005
• Official cooking oil supplier to Beijing Olympics 2008

– Specialty fats

• Leading producer and supplier of specialty fats in China
• Distribution network that covers 150 cities in China
• Sales volume of 240,000MT in 2005 (accounting for a substantial

share in China’s specialty fats market) – Oleochemicals

• One of the largest oleochemical manufacturers in China
• Other operations include flour and feed milling, oilseeds crushing

and refining

Proposed US$1.2b acquisition of a 100% stake in KOG Background Information

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• Consideration for the proposed acquisition to be satisfied by

issue of approx 1,091.6m new Wilmar shares at an issue price

• f S$1.71 per Wilmar share
• Proposed acquisition is subject to, inter alia, Wilmar

shareholders’ approval

• Expected to complete in Q2 2007

Proposed US$1.2b acquisition of a 100% stake in KOG Purchase Consideration & Approval

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• Major palm and lauric oils refiner and exporter in Malaysia
• Operates six refineries with a combined production capacity

close to 4.7m MT p.a.

• Approx 90% of production is exported to China, EU countries,

India, Korea, Japan, USA, Middle East and Russia whilst the balance is sold locally in Malaysia

Proposed US$320m acquisition of a 65.8% stake in PGEO Background Information

US$171.1m US$146.2m NTA US$24.8m US$24.8m Net profit 9M06 FY05 PGEO

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• Offer for 65.8% stake as 34.2% is held by PPBOP
• Consideration for the proposed acquisition to be satisfied by

issue of 287.1m new Wilmar shares at an issue price of S$1.71 per Wilmar share

• Conditional upon VGO of PPBOP having become unconditional
• Subject to, inter alia, Wilmar shareholders’ approval

Proposed US$320m acquisition of a 65.8% stake in PGEO Purchase Consideration & Approval

FFM Berhad PGEO 65.8% 34.2% 55.6% 100%

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Financial effects of the KG Merger

As at 30 Sep 06 25.19 18.69 NTA per share (US cents) 1,243,332 473,374 NTA (US$’000) 3.61 2.70 Earnings per share (US cents) 178,072 68,263 Earnings (US$’000) 0.37 1.19 Net gearing (times) 0.44 1.34 Gross gearing (times) After the KG Merger (assuming 100% acceptance of VGO) Before the KG Merger For 9 months ended 30 Sep 06

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Proposed US$1.6b IPT Acquisitions

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Proposed US$1.6b IPT Acquisitions Background Information

• Principally engaged in the origination, processing, branding

and distribution of edible oils, oilseeds and grains

• Principal operations located in China, India, Africa and

Ukraine

– Largest processor of oilseeds and edible oils in China – One of the largest edible oils refiners in India (through joint venture) – One of the leading consumer pack edible oils brands in China and India – One of the largest oleochemical manufacturers in China – One of the leading exporters of edible oils to East and South Africa – Largest processor of edible oils in Ukraine

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Proposed US$1.6b IPT Acquisitions Background Information

US$814.8m US$721.5m NTA US$116.6m US$11.1m Net profit 9M06 FY05

• Other operations include specialty fats, flour and rice milling,

and grain merchandising

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Proposed US$1.6b IPT Acquisitions WHPL – Production capacities

957,000 957,000

• India - Refining

231,000 231,000

• India - Crushing

165,000 165,000

• Uganda - Refining

40,000 40,000

• Africa/ Ghana - Crushing

90,750

• 90,750

Sri Lanka Refining 495,000

• 495,000

Ukraine - Refining Rest of the world 742,500 247,500 495,000 Flour milling 396,000 99,000 297,000 Rice milling 2,363,790 1,257,300 1,106,490 Consumer oil packaging 207,900

• 207,900

Oleo-chemical 66,000

• 66,000

Specialty Fats 4,488,000 1,881,000 2,607,000 Refining 15,965,400 7,896,900 8,068,500 Crushing China (MT p.a.) (MT p.a.) As at 30 Nov 06 Total Associates Subsidiaries

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Proposed US$1.6b IPT Acquisitions Purchase Consideration

• Restructuring exercise to inject all of WHPL’s oils, oilseeds,

grains and related businesses into Wilmar for US$1.1b

• Letter of offer to ADM to acquire ADM’s interests in the

companies engaging in the oils, oilseeds, grains and related businesses where they hold shares together with WHPL (“IPT Assets”) into Wilmar for US$476m

• Consideration for the IPT Acquisitions to be satisfied by the

issue of 1,449.7m new Wilmar shares

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Proposed US$1.6b IPT Acquisitions Financial Effects

As at 30 Sep 06 32.70 18.69 NTA per share (US cents) 1,302,116 473,374 NTA (US$’000) 4.68 2.70 Earnings per share (US cents) 186,416 68,263 Earnings (US$’000) 0.82 1.19 Net gearing (times) 1.06 1.34 Gross gearing (times) After the IPT Acquisitions Before the IPT Acquisitions For 9 months ended 30 Sep 06

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Proposed US$1.6b IPT Acquisitions Approval and Timing

• Approval from Wilmar shareholders will be required for the IPT

Acquisitions – WHPL will not be voting on the resolution to approve the IPT Acquisitions at an EGM to be convened

• The IPT Acquisitions are estimated to be completed in Q2 2007

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Pro forma shareholding structure

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Proforma shareholding structure

*Assuming all vendors accept the offer and all PPBOP shareholders accept the share offer ** ADM will have an effective interest of 16.2% in Wilmar after the transactions

• Depending on acceptance of the VGO, the resulting public shareholding may

range from 7.2 to 13.8% (Wilmar will undertake a compliance placement to satisfy the requisite free float requirements)

• Kuok Group will seek a waiver from the Securities Industry Council for any

mandatory take-over offer for Wilmar

PGEO KOG WHPL

100% 65.8% 100%

Public ADM Existing Business

6.7% 100% 48.5% 13.8% 31.0%

IPT Assets

19.6%

Kuok Group (include PPBG)

34.2%

PPBOP

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Rationale for the Transactions

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World’s Leading Merchandiser and Processor of Palm Oil

• Leading palm and lauric
• ils refiner in the world
• Total refining capacity for

palm and laurics oil will increase from 5.3m MT p.a. to 9.6m MT p.a.

• Leading merchandiser of

palm and lauric oils in most of the major markets in the world (China, India, Africa, E. Europe and Middle East)

• One of the largest palm

biodiesel manufacturers

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Significant increase in production capacities in Indonesia & Malaysia

1 1 14 15

• No. of

plants PGEO 100,000 150,480 1,237,500 4,719,000 Capacity (MT p.a.) 1,050,000 166,320 1,564,200 5,339,400 Capacity (MT p.a.) Capacity (MT p.a.)

• No. of

plants

• No. of

plants As at 30 Sep 2006 316,800 4 3 Specialty fats 1,150,000 4 3 Biodiesel (All plants under construction) 29 33 15 18 Wilmar 2,801,700 10,058,400 Combined Group Refinery – palm & laurics Palm kernel & Copra crushing Activities

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Significant oil palm plantation owner

• Creation of a plantation group with 573,405 ha of landbank and 160,786 ha of

total planted area

• With the additional expertise of PPBOP, Wilmar will be able to expand its oil

palm acreage more aggressively, to become one of the largest plantation

• wners in 10 years

1,823,941 1,081,309 742,632 FFB production (tonne) Mill production 122,319 67,475 * 54,844 Mature area harvested (ha) 8,965,000 2,275,000 6,690,000 Palm oil milling capacity (MT p.a.) 906,625 300,063 606,562 Crude palm oil (tonne) 204,556 61,360 143,196 Palm kernel (tonne) 96,114 363,405 PPBOP 160,786 573,405 Combined Group Wilmar Plantation statistics As at 30 September 2006 * 64,672 210,000 Landbank (ha) Total planted area (ha)

* Including acquisitions announced on 21 September 2006.

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Location of Indonesian & Malaysian operations

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Dominant Processor and Merchandiser of Agricultural Products in China

Largest oilseed crusher, edible oils refiner, specialty fats and

• leochemical manufacturer and merchandiser of consumer pack

edible oils

KOG

• Leading merchandiser of consumer

pack edible oils

• One of the largest manufacturers
• f oleochemicals
• Manufacturing facilities in flour

and feed milling, specialty fats, oil seeds crushing and refining

WHPL & ADM

• Largest oilseed crusher and edible
• ils refiner
• Leading merchandiser of consumer

pack edible oils

• One of the largest manufacturers of
• leochemicals
• Manufacturing facilities in flour and

rice milling and specialty fats

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WHPL – Manufacturing plants & trading companies in China

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KOG’s presence in China

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Significant production capacities in China

4,956,500 28 2,399,000 11 2,557,500 17 Refinery 8,111,500 14 802,000 3 7,309,500 11 Soya bean and

• ilseeds crushing

236,000 2 116,000 1 120,000 1 Oleochemical 396,000 4 330,000 3 66,000 1 Specialty fats 10

• No. of

plants KOG 2,983,200 Capacity (MT p.a.) 1,106,490 Capacity (MT p.a.) Capacity (MT p.a.)

• No. of

plants

• No. of

plants As at 30 Sep 2006 4,089,690 21 11 Consumer oil packaging WHPL Combined Group Activities

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The Leading Agribusiness Group in Asia

• Leading merchandiser and processor of palm and lauric oils in

the world

• Leading merchandiser and processor of edible oils and
• ilseeds in the China
• Sizeable plantation owner in Indonesia and Malaysia
• Dominant processor and merchandiser of agricultural products

in China

• One of the Top 15 largest listed company on SGX-ST by

market capitalisation (approx US$7.0b) based on market price

• f S$1.71 as at 13 Dec 06
• Estimated combined turnover of approx US$10.0b and profits
• f approx US$300m for 9M06

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Questions & Answers

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IMPORTANT NOTICE

Information in this presentation may contain projections and forward looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual results may differ materially from those projected. This presentation does not constitute or form part of any opinion on any advice to sell, or any solicitation of any offer to purchase or subscribe for, any shares nor shall it or any part of it nor the fact of its presentation form the basis of, or be relied upon in connection with, any contract or investment decision.