Post on 13-Jan-2016
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October 23/24 2008
October 23/24 2008– First Kazakh Grain Forum Astana
Financing the Kazakh grain sector
Experience of Rabobank
October 23/24 2008– First Kazakh Grain Forum Astana
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Who is Rabobank?
• Rabobank is the largest Allfinanz financial service corporation in the Netherlands
• Rabobank is an AAA rated financial institution
• Rabobank has an international food & agri focus
• Rabobank delivers financial solutions through a network of branches in 41 countries
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October 23/24 2008– First Kazakh Grain Forum Astana
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Rabobank Agri-commodity finance
1. Financing the storage and global trade flows of agri-commodities
2. Focus on:a)The large international trading companiesb)The key local integrated exporters in emerging markets
3. Goal: to cover the full agri-commodity chain (link a with b)
4. Most important financial products:a)Stock financing (based on warehouse receipts and pledges)b)Transactional trade flow finance (based on shipping documents)c) Ownership based finance (keeping the goods in ownership of the
bank via special Rabobank Trade Vehicle)d)Borrowing Base financing (financing various classes of current
assets)
October 23/24 2008– First Kazakh Grain Forum Astana
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SWOT Kazakh Grain Sector
Strengths
• Warehouse Receipts System
• Grain Law /Indemnity Fund
• Integrated companies
• High wheat quality
Weaknesses
• Logistics (wagon shortages)
• High transport cost to export ports
• Low yields
• Local bank finance
• Transparency of companies
• Financial management
Threats
• Banking crisis
• Slow down world economy
• Large unsold stocks / price risk
• Exchange rate risk
Opportunities
• Yield increase by better inputs
• Export logistics abroad (e.g. Latvia)
• China, Middle East, North Africa
• World demand growth for wheat
October 23/24 2008– First Kazakh Grain Forum Astana
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Our experience in Kazakhstan
• We started trade financing under the EBRD WRP program in 2001
• FCC was first client in 2003/04
• Gradually building up portfolio of private grain integrators
• Minimum transparency required: IFRS audited financials
• Security: pledge on grain/WRs + inspections by SGS
• Grip on cash flows (collection account pledged to Rabobank)
• Additional security via assignment of export contracts
• Focus is on tenors up to 1 year.
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Conclusions
1. Kazakhstan has some unique competitive advantages:a)High wheat qualityb) Integrated sectorc) Land sized)Grain law/WR system
2. But to really explore these advantages it must address some key bottlenecks:a)Bring down cost per mt by increasing yieldsb)Solve the export problems / wagon shortagesc) Further improve transparency of the playersd) Improve availability of working capital
3. Rabobank will continue to support the Kazakh grain sector
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Thank you for your attention!
Hans.Bogaard@Rabobank.com
Tel: + 31 30 216 2797
Fax: + 31 30 216 2964