Hong Kong-based Noble Group to buy two sugar cane mills in Brazil that combined can produce 600,000 tonnes/year of sugar, 300,000 cubic meters/year of ethanol, supply more than 300,000 MWh to the grid

Rachel Carter

HONG KONG , December 20, 2010 (press release) – The acquisition of Cerradnho Acuar, Etanol eEnergia S.A., which Noble Group announced today, will propel the Group into the top tier of sugar cane milling companies globally, taking the combined annual potential crushing sugar cane capacity that Noble will control to 17.5 million tonnes.

The two mills that are being acquired, Catanduva and Potirendaba, are fully operational in Sao Paulo State in Brazil. They are 50 kilometres apart from each other, and are strategically located just over 100 kilometres from Noble’s established UNP facility.

Both the facilities being acquired have good access to domestic and foreign markets and are located close to competitive rail infrastructure. The mills have a strong operational track record and are active in both domestic and export markets.

Funding of the acquisition will be from existing resources.

Of the two mills being acquired, Catanduva has a nominal sugar cane crushing capacity of 4.6 million tonnes and Potirendaba crushes 3.4 million tonnes per annum. Combined, it is envisaged that at full production these two additional mills will themselves produce 600,000 tonnes of sugar, (crystal, white refined and VHP), 300,000 cubic metres of ethanol and supply over 300,000 MWH to the grid. Catanduva also has a fully operational sugar refinery that allows for the production of Crystal Sugar and Refined White Sugar, products which attract premium pricing. This capability has facilitated the development of branded retail sugar products, first launched in the South and South East regions of Brazil in 2004, and Noble has also acquired these brands along with the accompanying domestic distribution network.

In combination with Noble’s Meridiano facility, construction of which is making good progress, the physical proximity of the four mills that Noble will own after this acquisition  offers  significant economies of scale and ensures that it will be able to fully exploit the advantages offered by the Group’s newly completed export terminal in Santos.

Noble's two existing mills have a nominal annual crush capacity of 9.5 million tonnes of cane per annum and can produce approximately 740,000 tonnes of sugar, 300,000 cubic metres of ethanol per annum, while also being capable of supplying 450,000 MWH of surplus electricity to the grid.

About Noble Group

Noble Group (SGX: N21) is a market leader in managing the global supply chain of agricultural and energy products, metals and minerals. The Group operates from over 150 offices and plants in 38 countries, employing approximately 70 nationalities. Noble manages a diversified portfolio of essential raw materials, integrating the sourcing, marketing, processing, financing and transportation.  With revenue for the nine months ended 30 September 2010 exceeding US$39billion, Noble owns and manages an array of strategic assets, sourcing from low cost producers such as Brazil, Argentina, Australia and Indonesia and supplying to high growth demand markets including China, India and the Middle East.  Today, Noble has interests in grain crushing facilities, coal and iron ore mines, fuel terminals and storage facilities, sugar and ethanol plants, vessels, ports and other infrastructure to ensure high quality products are delivered in the most efficient and timely manner to its customers.

In late 2009, Noble achieved "Investment Grade" ratings (Baa3) from Moody's Investors Service and (BBB-) from Standard & Poor's, complementing its initial "Investment Grade" rating (BBB-) from Fitch the previous year.  In addition, Noble Group is among the 30 securities listed on the Straits Times Index.

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