Masan Resources picks up new subsidiary
Masan Resources Corporation (MSR), one of the world’s largest integrated industrial tungsten mineral and chemical producers, announced on August 15 that the Nui Phao Mining Company Ltd (NPMC), a wholly-owned subsidiary, has acquired H.C.Starck GmBH (HCS)’s 49 per cent stake in the Nui Phao – H.C.Starck Tungsten Chemicals Manufacturing LLC (NHTCM) for a total cash consideration of $29.1 million. The transaction was fully funded by cash and equivalent from MSR and NHTCM is now a 100 per cent wholly-owned subsidiary.
“This acquisition is a critical step in delivering our vision of becoming a fully integrated downstream tungsten chemicals business of global scale and influence,” said Mr. Craig Bradshaw, MSR’s CEO. “It consolidates our ownership of advanced processing technologies. Today, we are the number 1 primary TC producer Ex-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. I hope Vietnam can be proud of Masan Resources’ ambition and ability to be a dominant player in a global industrial sector. We embody the ‘Vietnam can do’ spirit, and we are strongly positioned not only to significantly increase shareholder value but, more importantly, to enhance social economic value as a representative of Vietnam globally.”
“We have enjoyed working with Craig and his team at NPMC over the last five years,” said Dr. Karlheinz Reichert, CEO of HCS’s Tungsten Division. “NPMC was a great partner during the course of our joint venture. 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.”
According to Mr. Danny Le, Head of Strategy and Development at the Masan Group, from a financial perspective, this transaction will enable it to consolidate its cash position by eliminating minority interests. This provides MSR with better flexibility to pay down debt or to declare cash dividends to shareholders over the medium term.
He added that the acquisition is also consistent with the five-year strategy the company has outlined for MSR: develop an integrated business model to generate strong cash flows and profits through commodity cycles. In addition, this will better position Masan Resources for strategic partnerships in the near future and / or pursue an international IPO to unlock shareholder value.
A concrete action plan has been prepared to integrate NHTCM with NPMC’s operations and cost efficiencies are expected to be realized from the Q1 2019 onwards. The combined business is expected to yield an improvement in NPAT Post MI margin of 5 per cent in 2H 2018 vs. 1H 2018, resulting in achieving an expected NPAT Post MI of over VND1 trillion ($43 million) for FY 2018.
NHTCM 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 production output of NPMC, into higher value-added tungsten products.
In consideration of NHTCM’s contribution to Vietnam’s development of high-tech industries, the Ministry of Science and Technology awarded it a “High-Tech” Certificate. NHTCM is a globally-recognized brand and trusted supplier for many high-tech industrial manufacturers.
Masan Resources, a leading supplier of critical minerals, including tungsten, fluorspar and bismuth, is currently operating a world-class polymetallic mineral resource and chemical processing plant in northern Vietnam. Its vision is to show the world that a Vietnamese company can lead the transformation of the global tungsten market.