June 14, 2011 [Reuters] - Noble Group is tapping into businesses such as clean fuels and expanding in India and China to boost growth, its Chief Executive said on Tuesday.
Trading houses and investment banks are expanding to take a bigger piece of the fast-growing market for commodities and energy in expanding Asian economies. Nations such as Brazil and Argentina also offer opportunities for firms such as Noble.
The Singapore-listed, Hong-Kong based group already operates across a diverse range of businesses and is expanding in more – from an iron-ore terminal to vegetable oils to floating fuel storage.
“We are not a one-country or one-region company. We are a global player,” Chief Executive Ricardo Leiman said at the Reuters Global Energy and Climate Summit. “We are looking for additional opportunities in Asia as we progress.”
Leiman was Noble’s chief operating officer before he took over from Richard Elman as the Chief Executive in 2010.
Demand for basic products such as food and energy would rise as long as incomes in emerging nations rise, he said. The possibility of a slowdown in emerging economies would have little impact on this, he added.
“The world economy has its challenges,” he said. “(But) as long as the world income continues to grow, there will be no shortage of demand for our products.”
The company is looking at building a vegetable oil refinery in India, a top consumer and producer of the commodity, “which has a lot of opportunities moving forward,” he said.
Speaking on other initiatives in the vegetable oils business, Leiman said the acquisition of a 51 percent stake in PT Henrison Inti Persada in Indonesia, which has plantations in Sorong, is helping the company gain presence across the palm oil industry, from owning raw material sources to refining and distribution.
“We completed the transaction in the beginning of year. We are already producing some palm oil. We are now building a mill in the plantation,” said Leiman.
The company has vegetable oil refining capability in China, another top consumer of the commodity, with a total capacity to process 1 million tonnes of palm oil a year.
Noble is doubling the capacity of its sunflower seed crushing plant in Ukraine, he said.
The group is simultaneously expanding its crude and oil products business, which it uses as a hedge against the agriculture and vegetable oils division, he said.
Noble has built up assets and its team to take on large-volume oil trading. Assets include a floating storage facility in Malaysia for fuel oil. The firm set up a light distillates trading desk in Singapore last year.
The U.S. and Europe will remain a key market for the company, said Leiman.
“We focus on having a critical mass and economies of scale in key countries. So far, for energy, the key markets are still in the U.S. and Europe.”
Noble has 6 million barrels of clean fuels distribution capability in the U.S. and 3 million barrels of crude storage in Cushing. It owns the country’s fifth largest power retail company after acquiring Sempra Solutions in November last year.
In 2010, energy made up 65 percent of Noble’s total revenue of US$56.7 billion. Leiman said it was difficult to forecast how much the sector would contribute in 2011 due to volatility in crude prices.
