An Established Vertically Integrated Palm Oil Production Company, - - PowerPoint PPT Presentation

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An Established Vertically Integrated Palm Oil Production Company, - - PowerPoint PPT Presentation

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An Established Vertically Integrated Palm Oil Production Company, Cote dIvoire NURSER ERY PLANTED LAND 60T/HR 60 /HR MILL SMALLHOL OLDER DER PRODUCT CTIO ION EXPANSION ION LAND Invest estor Presen enta tati tion on July 2014

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SLIDE 1

An Established Vertically Integrated Palm Oil Production Company, Cote d’Ivoire

Invest estor Presen enta tati tion

  • n July 2014

www ww.d .dek ekelo loil.c l.com m A AIM:DKL M:DKL

NURSER ERY PLANTED LAND 60 60T/HR /HR MILL SMALLHOL OLDER DER PRODUCT CTIO ION EXPANSION ION LAND

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SLIDE 2

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

OVERVIEW

  • An AIM quoted palm oil developer
  • 51% ownership of Ivory Coast palm oil project
  • Producing revenues from its 60 t/hr mill, which is
  • ne of West Africa’s largest
  • Strategy

to expand the Company’s existing plantation assets with the objective of becoming a leading West African CPO producer

  • Demand for palm oil estimated to double by 2020
  • Likely to attract interest from south east asian

palm oil giants

Vertically Integrated 1m plants nts pa Nu Nurse sery 2,000 0 ha of Planted d Estat tates es 5,000 Smallhol holde ders Provi vidi ding FFB Producti uction n from m 60 t/hr r Mill 26,000 00 ha Expans nsion n Land

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SLIDE 3

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

MILESTONES SINCE LISTING

Mar 2013 A Apr-Ju Jun 2013 Jul-Dec c 2013 Feb 2014 Mar ar-Apr Apr 2014 J Jun 2014

  • AIM listing
  • Arrival
  • f

Mill on site

  • Commenced

construction

  • Award of

Effluent Treatment Plant contract

  • Mill Operational
  • Nubuke

Investment

  • 2nd off take
  • First

production

  • First CPO

Sales

  • First hub site
  • First quarterly

production

  • Improvement of

extraction rate

  • Second hub site
  • Operations team

recruited

  • Software

implementation

  • 1st off take
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SLIDE 4

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

ASSETS WELL POSITIONED IN COTE D’IVOIRE

Expan pansion ion Plan

  • 24,000 ha for plantations
  • 60t/h mill
  • New Nursery (subject to

funding) Existing sting

  • 27,000 ha small-

holders

  • c.1,900 ha company

plantations

  • 60t/h mill
  • 1M plants Nursery

Guitry Ayanouan

Advant ntageo geous us locati ation

  • n

and existin ing g infrastruc tructu ture re Existing ing operati ations

  • ns are

locat ated ed in Ayan anou

  • uan

an, , 2hrs from Abidjan’s port Expans nsion ion land is located ed in Guitr try, , 4hrs from Abidjan’s port Good d road links ks to to the port and to to Ghana

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SLIDE 5

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014 2014

DEVELOPMENT STRATEGY

CURREN ENT

  • Produce 16,000-20,000 tons of CPO in 2014
  • Proof of logistics solution from smallholders
  • Implementation of ERP system
  • Diversification of offtake partner base

IMMED MEDIA IATE, E, SUBJ BJECT ECT TO TO FUNDING DING (1-2 Year ears)

  • Develop a further 3,000 to 5,000 ha of company plantations in close proximity to the first mill and

increase yields of smallholders’ plantations

  • Construct a palm kernel oil crushing facility
  • Commence operations at 24,000ha Guitry including new nursery and 1,000ha of estates
  • Finalise first land acquisition in Ghana of 10,000ha

MEDIUM DIUM TO TO LONG TERM RM (2-5 Year ears)

  • Expand planting at Guitry and construct second 60tphr palm oil mill
  • Commence first nursery and pilot planting in Ghana
  • Review new projects in Cote d’Ivoire and bordering countries

Increase production as quickly as possible from the first project and fast track development of Guitry project

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SLIDE 6

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014 2014

GLOBAL PALM OIL MARKET & CORPORATE ACTIVITY

  • Palm oil is the most widely used edible oil in

the world

  • Demand estimated to double by 2020
  • Supply side limited by lack of land availability

in traditional growth zones in Malaysia and Indonesia

Palm Oil ‘000t Product uction ion Consumpti tion

  • n

Balance nce Benin 35 110 (75) Cote d'Ivoire 300 170 130 Ghana 120 160 (40) Guinea 50 75 (25) Liberia 42 61 (19) Nigeria 850 1240 (390) Sierra Leone 36 44 (8) Togo 7 90 (83)

Source: USDA, 2012 Note: Data for ECOWAS palm oil producing countries, as of 2011

  • International palm oil majors currently entering or expanding in West Africa to address lack
  • f land in Malaysia and Indonesia
  • Worlds three largest palm oil companies; Wilmar, Sime Darby and Golden Agri have entered

West Africa

  • 2014 - KLK, one of the leading global plantation companies, has acquired a 63% interest in

Liberian-based Equatorial Palm Oil at a significant premium to DekelOil

  • DekelOil is currently one of the only established, palm oil developers with contiguous land

not in partnership with a major asian palm oil company

RECE CENT NT CORPORA RPORATE TE ACTI TIVIT ITY Y IN WEST AFRIC ICAN N PALM LM OIL L SECTOR OR: : A SNAPSHOT

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SLIDE 7

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

COTE D’IVOIRE: AN IDEAL ENVIRONMENT

  • Cote d’Ivoire has a well established palm oil industry

with an estimated 250,000ha of palm oil plantations

  • Modern infrastructure: land, sea (largest port in West

Africa), air, electricity and communication

  • The

Directors believe the market is relatively fragmented with potential acquisition opportunities

Compan any

  • No. of

Mills ls Hectares ares Annu nual al to tons FFB Palm m Oil product uction ion PalmCI (SIFCA, Wilmar & Olam) 12 39,000 1,107,443 250,000 SIPEFCI 2 11,035 264,083 56,778 Palm Afrique 2 7,100 295,200 59,040 SOGB 1 6,041 110,000 22,000 17 17 63,176 1,776,7 ,726 387,8 ,818

  • Highly dominant agriculture industry:
  • Existing agriculture workforce
  • Existing commodity trading

infrastructure

  • The world's largest producer and

exporter of cocoa beans and significant producer and exporter of coffee and palm oil

  • Economy grew by 8.7% in 2013 (source

IMF – official figures not yet available)

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SLIDE 8

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

AYANOUAN – HOME TO ONE OF WEST AFRICA’S LARGEST MILLS

  • 60 ton/hour mill, largest in West Africa, now
  • perational as at March 2014
  • Total Mill site size - c.14 hectare, mill floor base
  • c.9,000 s.q.m.
  • At full capacity, the Mill can produce 75,000

tons of CPO (potential revenue of $US64m at palm oil price of $US850/tn)

  • An effluent treatment plant (‘ETP’) is being built

– leading provider KIS Group

  • Completed recruitment of all Mill operational

management and the

  • perational

team, including the Mill manager, the Mill maintenance manager and Shift Managers

Simp mple e CPO Proces essin ing Met etho hods ds

Smallholder fruit delivery

DKL pays price proportionate to CPO price

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SLIDE 9

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

MILL SITE – 2014 - POST CONSTRUCTION

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SLIDE 10

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

LOGISTICS: RUNNING SMOOTHLY

  • The recruitment of logistics zone managers has been

completed to coordinate the delivery of fruits to the collection points and Mill

  • Undertaking detailed planning with local cooperatives to

enable the adequate and efficient delivery of feedstock from local smallholders to the Mill

  • The first two Collection Points now operational providing

multiple drop-off points for smallholders and manages congestion as trucks make deliveries for processing

  • The reception area at the Mill has been designed to be

twice the size of those at traditional 60 tph mills for efficiency purposes

  • Contract signed with a subcontractor to transport fruits

from the Logistics Collection Points to the Mill

Devel elop

  • pin

ing g an effecti ective e logisti istics cs net etwor

  • rk to ensure

e timely y deliv ivery of fresh h fruit t bunch nches es ('FFB') FB') to the Mill via Collec ectio tion n Point nts

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SLIDE 11

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

FIRST MILL FEEDSTOCK

Smal all Holder lder Estat tates es

  • Contracts

with

  • ver

5,000 000 sm smal all hol holder ers over er 27 27,000 000 ha ha of existing plantations

  • Estimated annual yi

yield elds from small holders of 8-12 12 tns tns/h /h of Fresh Fruit Bunch Compa pany Estat tates

  • 1,900 ha planted to date at Ayanouan,

partly yielding

  • Costs

to maturity: US$2,000/ha to US$2,700/ha, lower than West African competitors

  • Mature plantations in Côte d’Ivoire have a

peak yield of 20-24t

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SLIDE 12

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

PRODUCTION AND SALES

Month/s CPO Production (t) Kernel Production (t) FFB Processed (t) Extraction Rate (%) CPO Sales (‘t) Average Sales Price (US$) March 1,617 189 7,891 21 594 882 April - June 5,943 1,077 24,936 23.8 4,965 936 Total tal 7,550 1,266 32,82 ,827 5,559

  • AIPH Pricing achieved base on CIF Rotterdam CPO price
  • Operating profitability achieved in the Company’s first full month of operations
  • Three off take agreements in place, all with local refineries
  • By selling the CPO locally, the Company benefits from reduced transportation, insurance and

marketing costs

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SLIDE 13

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

INCREASING FFB STRATEGIES

Step 1 Step ep 2 Step 3 Step ep 4 Step5 Step p 6

Additional Hub Sites Agreements with large farmers Performance Bonus system (discount on fertilizer and plants, Free EFB) Local PR Village to Village Appointed extensive supervisor network Natura ural Improvem emen ent

  • Full year
  • peration -

improved payment system

  • Increased local

awareness

  • Confidence in
  • perations
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SLIDE 14

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014 2014

FIRST MILL ECONOMICS AT MATURITY

Description Calculation FFB Received 350,000 CPO Produced Extraction Rate – 23% Pricing $US900/tn $US72.5m Kernels Produced Extraction Rate – 5% Pricing $US250/tn $US4.5m Tot

  • tal Re

Reven venue ue $US7 S77m EBITDA Margin Mid point 28% $US21.5m Interest Expense 10.5% on $US20m $2.1m Tax 13 year zero tax exemption nil Net et Prof rofit t After er Tax $US1 S19.0m .0m DekelOi Oil Publ blic Share re 51% % Share 9.7m

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SLIDE 15

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014 2014

EXCELLENT VALUE IN COMPARISON TO PEERS

Name me Market t Capital ital (£m) Asset t Owner ersh ship ip (%) (%) Planted ed Hecta tares (Ha) Small all holde der FFB Crude de Palm m Oil Produc

  • ductio

ion (‘000) Mill Produc ductio tion n (Tonn

  • nnes)

es) 2014e 2015e 2016e Asian ian Plantatio tation 103.57 100% 13,000 100,000 52 78 95 60 Equat quator

  • ria

ial l Palm m Oil 33.40 50% 1,400 10,000 1 1 1 5 Palmci mci 193 100% 39,000 620,000 250 250 250 360 DekelOi elOil Public ic Ltd 18.91 51% 1,900 220,000 17 31 32 60

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SLIDE 16

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014 2014

BOARD OF DIRECTORS

Andr drew Tiller lery Non Executive Chairman 25 years operational management and private equity experience in Africa and other emerging markets including 10 years as a CEO in Cote d'Ivoire, West Africa where he had responsibility for managing a group of oil palm operations and founded a natural rubber business. Holds two Masters degrees from Oxford University, an MBA from the University of Chicago. Currently a Non executive director on 3 African agribusiness boards and adviser to several agribusiness investment funds in sub-Saharan Africa Youval al Rasin Chief Executive Officer Founder of DekelOil and has held senior management positions in various companies within the Rina Group, a family holding company with interests in agriculture, mining, hotels etc. Qualified lawyer and active in Ivory Coast since 2002 with 7 years’ experience in agro-industrial projects including 5 years in the Palm Oil Industry. Shai Kol Chief Financial Officer Co-Founder of DekelOil. CPA & MBA graduate. 13 years work experience in finance, with significant business & international exposure. former KPMG corporate finance. Financial director for an international software company, Director of finance and business development for Yellow Pages leading fund raising and M&A activities. Lincoln

  • ln Moore

Moore Executive Director For the past 5 years Lincoln has been active in the West African oil palm industry in Liberia and Sierra Leone including establishing and raising finance for palm oil developments. Former CFO of Sierra Leone Agriculture Ltd and former executive director of AIM listed Northcote Energy Ltd. Chartered Accountant and former senior manager at Deloitte and Touche. Richa hard Amon Non Executive Director Richard Amon is an Ivorian national and member of the Royal family of Abengorou, part of the Agny which is

  • ne of the largest ethnic group in Cote D’Voire. Mr Amon is a former Notary and is a co-founder of DekelOil. Mr

Amon’s key role is to assist with relations with the community, small holders, co-operatives, in addition to government relations. Mr Amon holds a law degree from Montpellier University, France.

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SLIDE 17

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014 2014

SOCIAL AND ENVIRONMENTAL

  • RSPO member and certification process to

commence shortly

  • Majority of planting over previously cultivated

areas

  • Planting in partnership with local communities
  • Palm

Oil effluent treatment plant under construction – completion in 2014

  • All environmental permits in place
  • Employ
  • ver

300 staff – majority local management

  • Small holder initiatives in place
  • Various local community projects in place
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SLIDE 18

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014 2014

INVESTMENT SUMMARY

Producti ction

  • n
  • Revenues and operating profitability achieved from production at palm oil mill in Cote d’Ivoire
  • Good mill performance – high extraction rate.
  • Three local Off-take agreements to diversify sales outlets

Expansion nsion

  • Ramping up production at Ayanouan in 2015
  • Plans to expand company owned planted land at both project areas to become a leading

West African CPO producer

  • Continued assessment of synergistic project opportunities in Cote d’Ivoire and region

Locatio tion

  • Cote d’Ivoire is a leading palm oil and agricultural producer in West Africa – suitable

infrastructure

  • West African palm oil projects in strong demand by majors looking to expand production
  • utside of Malaysia and Indonesia

Asset t Backed ed

  • 51% interest in one of West Africa’s largest CPO mills
  • 28,000 hectares of brownfield land in Cote d’Ivoire – 2,000 ha of which is already planted
  • World-class nursery producing world-class plants

Suppor

  • rt
  • Ayanouan is under a 51:49 JV with Indian conglomerate The Siva Group
  • Increased institutional representation across shareholder register
  • Government support by way of 13 year tax relief across operations
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SLIDE 19

DEKEL KELOIL IL ● A VERTICA ICALLY LLY INTEGRATED PALM LM OIL PRODUCTIO CTION COMPANY Y ● JULY LY 2014

CONTACTS TS

Youval Rasin Chief Executive Officer Mob: +972544 60467 Email: youval@dekeloil.com Lincoln Moore Executive Director Mob: +447500 090 139 Email: lincoln@dekeloil.com

DEKELOIL

Andrew Craig Tel: +44 (0) 20 7496 3000 Email: Andrew.Craig@n1singer.com Elisabeth Cowell/Frank Buhagiar Tel: +44 (0) 20 7236 1177 Email: frank@sbmf.co.uk

Nplus1 Singer St Brides Media