Masan Resources Corporation (UPCoM: MSR), one of the world’s largest integrated industrial tungsten mineral and chemical producers, announced that Nui Phao Mining Company Ltd. (NPMC), a wholly-owned subsidiary of the company, has acquired H.C.Starck GmBH’s (HCS) 49 per cent stake in Nui Phao-H.C.Starck Tungsten Chemicals Manufacturing LLC (NHTCM) for the total cash consideration of $29.1 million, and now owns 100 per cent of this company.
|Masan bought out HCS from their joint venture tungsten chemicals processing facility |
NHTCM, previously a joint venture between NPMC and HCS, was established in 2013 and is a leading producer and global supplier of tungsten chemicals (ammonium paratungstate [APT], blue tungsten oxide [BTO], and yellow tungsten oxide [YTO]).
NHTCM processes tungsten concentrate (TC), the main product of NPMC, into higher value-added tungsten products. In consideration of NHTCM’s contribution to the development of Vietnam’s high-tech industries, the Vietnamese Ministry of Science and Technology has awarded it the “High-Tech” Certificate. NHTCM is a globally recognised brand and a trusted supplier for many high-tech industrial manufacturers.
Craig Bradshaw, CEO of the company, said, “This acquisition is a critical step to deliver our vision of becoming a fully integrated downstream tungsten chemicals business of global scale and influence. It consolidates our ownership of advanced processing technologies. We are the Number 1 primary TC producer with the exception of China, with 36 per cent of the non-China market, and we have clear operational plans to become the largest producer and supplier of tungsten chemicals globally.”
Karlheinz Reichert, CEO of HCS’ Tungsten Division, said, “We have enjoyed working with Craig and his team at NPMC over the last five years. The partnership resulted in a robust two-way exchange of business benefits, technology ,and culture and we will continue our relationship with NPMC as a customer. We look forward to remaining contractually and personally associated with NPMC as a long-term customer of choice for supply of its high-quality, value-added tungsten chemicals, APT, BTO, and YTO.”
Danny Le, head of Strategy and Development at Masan Group, said, “From a financial perspective, this transaction will enable us to consolidate our cash position by eliminating minority interests. This provides MSR better flexibility to pay down debts or to declare cash dividends to shareholders over the medium-term. The acquisition is also consistent with the five-year strategy that we have outlined for MSR: to develop an integrated business model to generate strong cashflows and profits through commodity cycles. In addition, this will better position Masan Resources for strategic partnerships in the near future and pursue an international IPO to unlock shareholder value.”
A concrete action plan has been prepared to integrate the operations of NHTCM and NPMC and cost efficiencies are expected to be realised from the first quarter 2019 onwards. The combined business is expected to yield an improvement in NPAT Post MI margin of 5 per cent in the second half of 2018, compared to the first half of this year, resulting in achieving the expected NPAT Post MI of over VND1 trillion ($44.2 million) for the fiscal year of 2018.