Just founded in 1991, Singapore’s Wilmar
International is already Asia’s largest agribusiness and has the second largest
market capitalisation of any company on the Singapore stock exchange. Wilmar
International is currently trading at SGD$3.41 within a 52 week range of
SGD$2.99 to SGD$3.92. What makes the company attractive to buy and hold
long-term is its current push into the competitive global sugar market as well
as its focus on Asian and African commodity markets. 
Singapore’s Wilmar International recently took
delivery of the largest amount of sugar on record on the ICE futures exchange
in New York. Although they are more often referred to as the world’s leading
producer and trader of palm and lauric oils, they have been steadily
strengthening their grasp on sugar. Wilmar International commenced their sugar
production and trading in 2010 after acquiring Australian sugar company
Sucrogen and Indonesia’s PT Jawamanis Rafinasi and PT Duta Sugar International.
Sucrogen is Australia’s largest sugar producer and Australia is the world’s
third largest sugar exporter after Brazil and Thailand. Wilmar International
have developed all parts of the sugar supply chain with a strong production,
refining, trading and distribution network. Wilmar International has continued
to build its sugar business by purchasing sugar mills and refiners in Morocco
and Indonesia. They are now one of the world sugar market’s top five traders. Demand
growth from China and India for sugar is expected to facilitate Wilmar
International’s sugar business profitability.  |
| Wilmar's Oil Palm Plantations |
Wilmar International’s strategy is to rely on an
integrated business model that involves owning businesses across the
origination, processing, branding, merchandising and distribution of
agricultural commodities. They own 450 manufacturing plants and extensive distribution
networks in 50 countries. Wilmar International is the largest supplier of
cooking oil in China and a major vegetable oil supplier in India and China.
They are also the largest palm oil refiner in Indonesia and Malaysia and one of
the largest globally. Wilmar International are the world’s leading manufacturer
of palm biodiesel and a leading importer of edible oils into East and
South-East Africa. Consumer pack oils is a major business for them as they are
the largest merchandiser globally and the leading brand in India. Their
substantial oilseeds, specialty fats and oleochemicals manufacturing has made
them a leading player in China. Wilmar International’s integrated business
model also dictates they possess a ship fleet to augment their logistical
efficiency and flexibility.
This is an interesting company to watch as Asian
commodities are booming and will continue to grow as the Asian middle-class
grows. Look to buy into Wilmar International at around SGD$3.20 and hold
long-term. If their shares go the way of major commodity players such as
Glencore or even Cargill, then they could look very profitable.
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