Tag Archives: growing
M’sia Eyes Bigger Slice Of Growing Biomass Pellets Market
Published on: Thursday, October 10, 2013 Putra Jaya: Malaysia aims to capture a bigger slice of the growing demand for biomass pellets in Asia driven by renewable energy policies in South Korea, Japan and China. Chief Executive Officer of Agensi Inovasi Malaysia, Mark Rozario, said the country has an advantage in terms of logistics and cost of transportation, which were usually dominated by pellet producers from US and Europe. “We want to grab this opportunity and with the establishment of the Pellet Association of Malaysia (PAM) earlier, we have united the manufacturers on issues such as quality, pricing and volumes,” he told reporters after the briefing on the progress of the National Biomass Strategy 2020 here Wednesday. Rozario said demand for biomass pellets in Asia by 2020 was estimated to be around 10 million tonnes per year, mainly driven by renewable energy policies in certain countries. “Right now, Malaysia produces about 100,000 tonnes per year and there is room for us to increase our capacity following the plan to collaborate with more plantation owners to supply the feedstocks,” he said. He said Malaysia could produce about five-seven million tonnes per year of pellets in the next five years. Rozario said PAM now has 10 members and five of them had started production of the biomass pellets. He said the agency was ready to attract more players to invest in this industry. Earlier, Malaysia biomass pellet manufacturers inked deals with companies from China and South Korea to supply biomass pellets to help meet their countries’ renewable energy targets. Detik Aturan Sdn Bhd signed the memorandum of understanding with South Korea’s BC21 Co Ltd and Global Green Synergy Sdn Bhd with Chinalight (GuangZhou) – Bernama Continue reading
Provider View: Demand Is Growing Fast
Numerous firms fall into the agriculture investment universe – and most offer opportunities By Jonathan Blake | Published Jul 01, 2013 Demand for agricultural resources, products and technologies is set to rise significantly, driven by a fast-developing global population. Against this backdrop, the investment case for agricultural equities continues to be driven by sustainable global demand on one side and the instability and inadequacy of supply on the other. As such, the business of feeding the world merits consideration for any well-diversified, long-term investment portfolio. The United Nations expects the world’s population to grow to more than 9bn by 2050. This means than in less than 40 years we will have 2bn more mouths to feed, with three-quarters living in the developing world. Food preferences are changing too. As individuals become wealthier, their eating habits tend to alter, with meat and protein consumption often rising sharply. This is what is happening in the large emerging markets of India and China, where demand for chicken and pork is growing. Since grain and other types of feed are major cost inputs in the production of meat, it is expected that changing dietary habits will lead to continued upward pressure on grain prices. More than that, well-supported commodity prices have also improved farming economics and provided a strong incentive for farmers to maximise output. This will continue to have positive implications for companies involved in a number of related industries such as agrochemicals, agricultural machinery and grain-handling and processing services. At the same time, there is rising interest in alternative energy sources such as biofuels, where agricultural products are the main inputs. In this area, demand will be well supported by a combination of high oil prices and regulatory incentives, as national governments continue to introduce subsidies and output targets. An environment of rising commodity prices tends to be a supportive one, but other related industries can also do well at different points in the economic cycle. For example, in an environment where soft commodity prices moderate, ‘downstream’ assets, such as processors, manufacturers and food retailers, offer interesting opportunities. These industries tend to be more defensive, as firms generally have the ability to maintain prices, even if input costs fall. Moreover, while there are plenty of opportunities in the developed western markets, many attractive ideas can be found in developing economies around the world. In Latin America, for example, there is significant potential for the region to develop as a major food exporter. Overall, a large number of quoted companies fall into the ‘agriculture’ investment universe, whether directly involved in agribusiness or in a related activity. Jonathan Blake is head of agriculture at Baring Asset Management Continue reading
Farmland Gold: 29,000 Acres Sells For $108 Million
Farmland Investor Letter A $108 million farmland purchase is unusual for its scale and reflects both the growing ranks of institutional investors aiming to boost their exposure to the buoyant agricultural real estate sector and a tight market in which few attractive properties are available for sale. UBS AgriVest Farmland Fund Inc., a Connecticut-based farm real estate fund has emerged as the winning bidder in two widely watched private land auctions in Texas and Wisconsin. The purchases are unusual for their scale and reflect both the growing ranks of institutional investors aiming to boost their exposure to the buoyant agricultural real estate sector and a tight market in which few attractive properties are available for sale. Through September, Midwest land values are up 13% from a year, according to a survey of agricultural bankers by the Federal Reserve Bank of Chicago. That pace is down from 14% and 22% annual gains in 2010 and 2011. Speaking at a conference hosted by the Chicago Fed last week, Murray Wise, founder of Westchester Group-a Champaign, Ill. farm asset manager now majority owned by New York retirement fund manager TIAA-CREF-speculated that as much as $10 billion in institutional capital is searching for a home in U.S. agricultural land. “Institutional investors are very frustrated at the moment,” says Mr. Wise. “They feel almost locked out of the Midwest marketplace as rent income yields continue to decline and the cash position of the operating farmer in most cases is too much for them to compete with.” Though farm rents are on the upswing, land prices are rising faster, pushing rent income yields from 5% in 2006-2007 to 3%-4% today. “Many institutional investors are having a hard time accepting a 4% cash-on-cash return, and in some cases less than 4%, when in fact they want 7% ideally,” says Mr. Wise. The tightening land market presents a growing hurdle for farm investment managers who are under pressure to put client cash to work. At mid-year, UBS AgriVest had $288.6 million of client funds awaiting investment in farmland. In a June meeting with the Alaska Retirement Management Board-which owns $640 million in U.S. farmland managed by UBS AgriVest and Hancock Agricultural Investment Group-James McCandless, president of UBS AgriVest, told Alaska officials he wouldn’t begin investing a September 2011 $100 million mandate from the Iowa Public Employees’ Retirement System until he had found property for $41.6 million of Alaska funds awaiting investment and $147 million queued up for the UBS AgriVest Farmland Fund. On November 13th, UBS AgriVest paid $67.5 million or about $6,922 per acre for 9,754 acres in southwest Wisconsin. The deal ranks among the biggest sales of Wisconsin cropland in recent memory and is unusual for the UBS fund since its average farm investment is $4.8 million. The purchase also marks UBS AgriVest’ s return to the Midwest after at least three years, while it sought more attractively priced farm properties in Georgia, Texas, Arizona, Idaho and Oregon. The fund acquired just one property in the first half of this year. Continue reading
