Singapore Corporate News - 25 Jul 2007

Chemoil to invest US$60m in new Fujairah terminal

MARINE fuels supplier Chemoil Energy is investing US$60 million in a new oil storage terminal in Fujairah, the world's second largest bunker port after Singapore.

The investment by the mainboard-listed company will ramp up capacity at its joint venture GPS-Chemoil facility in the United Arab Emirates with local partner Gulf Petrol Supplies.

Chemoil holds a 40 per cent stake in the JV, and GPS the remainder.

The capacity of the existing 44,000-cubic metres JV terminal, currently handling clean oil products, will be increased six-fold to 326,000 cum when the project is completed next year, Jerry Lorenzo, Chemoil's chief financial officer, told BT.

The additional tankage will enable the terminal to handle marine bunkers, he added.

He was responding to a BT query on Chemoil's earlier statement in May that it was exploring a number of oil storage investments in high-volume, strategic locations like Fujairah - the world's third largest bunker market.

This followed its acquisition of the US$100 million, 448,000 cum Helios Terminal being built on Jurong Island by its executive chairman and CEO, Robert Chandran. Helios is scheduled for completion in the fourth quarter.

The investments form part of Chemoil's strategy of having its own terminals to help it minimise exposure to uncertainties, like the high costs of leasing storage space, given the continuing strong demand for storage from oil traders.

'With the ownership of Helios, which is an important component of the company's strategic conversion of expenses into assets, the company would be able to better manage costs with more control over the storage and blending operations,' Chemoil said at that time.

Chemoil expects to make use of the Helios terminal for its own needs, and is continuing to pursue expansion plans for the Jurong Island facility, Mr Lorenzo said.

Mr Chandran told BT in April that the company was planning a further S$80 million expansion to add another 180,000 cum to the Singapore tankfarm, and that it was discussing details of the project, including land space.

Novena Hldgs get nod to sell furniture business

SHAREHOLDERS of Sesdaq-listed Novena Holdings last week approved the sale of the company's furniture business to listed TT International.

The sale leaves the Sesdaq company with over $20 million in cash and a core business now involving mainly its beauty and healthcare chain built around its 12 Beauty Spring stores and spas.

With its sizeable cash holdings, Novena is now on the prowl for new consumer-related businesses.

Novena executive director Mano Sabnani said the company was on the lookout for a 'scaleable and franchisable' business in the consumer sector.

He explained that based on its assets and cash holdings, his company could gear up significantly should it need more cash for an acquisition. 'With a base of $20 million, we can gear up to around $80 million, if needed,' he told BT.

Meanwhile, Novena is close to completing the sale to TT International of its core furniture businesses and several of its subsidiaries in an all-share transaction worth $13.5 million.

Under the deal, TT - which makes the Akira range of electronic appliances - will acquire Novena's seven brand names, including Castilla Premium, Natural Living and The White Collection.

The deal and additional share purchases associated with it will see Novena emerging with about 17 per cent of the share capital of TT International.

The disposal of its furniture business will generate a one-off gain of around $8million for FY2007.

Besides its $20 million in cash, Novena is also sitting on assets worth some $92 million, which translates into net assets per share of 60 cents.

The stock itself has almost doubled in price in the last five weeks to its current levels of around 68 cents.

Besides beauty and healthcare, Novena also owns 80 per cent of Chuan Seng Leong, a logistics and distribution business, which specialises in distributing fast moving consumer goods, especially in toiletries, in Singapore.

Mr Sabnani sees this business as being synergistic with Novena's beauty and healthcare chain.

Novena has already started to attract some attention this year. The savvy Oei Hong Leong became its second biggest single shareholder recently after buying 27 million new shares. Mr Oei now holds 25 per cent of the company.

The exercise saw chief executive Toh Soon Huat's stake falling to 31.02 per cent, down from 37.93 per cent.

Earlier this year, Mr Oei, through his foundation, swapped his 20 million Tung Lok Restaurants shares for 10.3 million new Novena shares.

The 14 per cent Tung Lok stake gave Novena another slice of the consumer/lifestyle segment.

Novena previously held a 12 per cent interest in Apex-Pal International. But following the failure of that company to buy into Thai Village, it recently disposed of most of its Apex-Pal shares, and currently holds only 2 per cent in the holding company of the Sakae Sushi chain.

Mr Sabnani reckons that the future of his company still lies largely in the beauty and wellness sector. 'This is a segment which is seeing huge growth both in Singapore and the region,' he said.

'And we want to position ourselves as a major player to capitalise on this growth.'

SembUtilities to expand capacities of China plants

SEMBCORP Utilities, the utilities arm of mainboard listed SembCorp Industries, yesterday announced that it is expanding its industrial wastewater treatment capabilities in the Chinese cities of Nanjing and Zhangjiagang to meet increasing customer demand.

China is reportedly planning to spend some US$125 billion over the next five years to deal with its water problems.

The Nanjing plant's current capacity of 12,500 cubic metres per day will be raised by 30,000 cubic metres a day at an estimated cost of 110 million yuan (S$22 million).

Located in the Nanjing Chemical Industrial Park, the plant has been in operation since July 2005.

The expansion, expected to be completed by early 2008, is being built to treat mainly high salinity wastewater.

The Zhangjiagang industrial wastewater treatment facility, located in Zhangjiagang Free Trade Zone (FTZ) in the south-east of Jiangsu Province, will expand its current capacity of 20,000 cubic metres a day by 15,000 cubic metres. Costing 98.5 million yuan, the expansion will treat high concentration wastewater without requiring pre-treatment of the wastewater by customers, a first in China. It is expected to be completed by the third quarter of 2008.

With these expansions, SembCorp's combined industrial water capacity in operation and under construction, including industrial wastewater and water treatment, will total 277,500 cubic metres per day (or the capacity of 111 Olympic-sized swimming pools). This compares with Singapore's four NEWater plants which will have a total capacity of 239,200 cubic metres per day.

SembCorp's group president and chief executive Tang Kin Fei said: 'SembCorp aims to be the leading provider of industrial utilities in China and we are excited to be scaling up our operations in Nanjing and Zhangjiagang. With more companies choosing to set up operations in NCIP and Zhangjiagang FTZ, the increased capacities will ensure that our facilities are able to meet customers' rising demand for wastewater treatment services.'