Here's how Wilmar will be plagued by China's economic slowdown

Its latest JV didn't bring good news.

According to OCBC Investment Research, Wilmar international Limited has just announced that it has received the relevant merger clearances for the establishment of a 50-50 JV called “the global amines company” with Clariant International Ltd (CIL), a world leader in Specialty Chemicals.

The JV – headquartered in Singapore - will be the global platform for production and sales of fatty amines and selected amines derivatives; it will also seek significant growth opportunities in the markets of Industrial Home Care and Personal Care.

However, DBS noted that WIL’s share price did not show any positive reaction to the news. Instead, sentiments were likely depressed by continued concerns over the slowing economy in China.

Here's more:

The latest economic data on Tuesday showed that the producer price index (PPI) has remained in deflationary territory for 16 consecutive months, falling 2.7% YoY in Jun following a fall of 2.9% in May.

PPI has been falling since Feb 2012 on the back of weaker commodity prices, overcapacity and falling demand. On the other hand, consumer price index (CPI) climbed 2.7% in Jun, driven up by rising food prices. While CPI was still below the central bank’s 3.5% target for 2013, further rises could lead to China imposing price caps on essential food items like cooking oil.

While WIL put in a pretty decent 1Q13 showing, where core earnings met 23.6% of our FY13 forecast, 2Q could be quite muted. WIL had previously guided for crushing margins in China to ease in 2Q13 now that a large quantity of beans has arrived in China as the port congestion in Brazil has cleared.

Furthermore, lower sugar prices are expected to weigh on its sugar operations.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia