Wilmar International

[freedom]

Wilmar's consumer product should have better margin, as its brand is quite strong in China.

just have to wait for its most small competitors to die first. then the giant remained ones will raise price slowly.

I am wondering, will there be price cap restrictions set by the government since these products are daily essentials?

there was, there is and there will be. government intervention is not the problem 'cause it can't last too long.

the problem is competition. too much small competing companies around.

[Clement]

Hi Likewise,
Fully agree with your points.
However it is a norm that commodity biz is high vol and thin margin.
In fact many other bizs are having such norm also, except some tech or property companies.
The strength of Wilmar is their setup is highly vertical , from planting to distributions, this is not easy for others, especially the new players to copy. Many edible oil or food related companies without this vertical setup, have to depend on raw materials from third parties, will have an uphill task to compete in this competitive World.
ZARA used to be a small garment manufacturer in Spain , they wouldn't be profitable if they didn't go into vertical setup, now ZARA has yarn spinning to apparel retailing.
If Wilmar no longer owns palm oil or sugar plantations, I will cease to be a shareholder.
This is my first quest with Wilmar and hope this entry price justify my decision.
Cheers.

Hi Tony, fully agree with all your points. I think Wilmar is undervalued when viewed from a replacement cost perspective. Does anyone know whether Wilmar grows all the palm they refine?

[greengiraffe]

Does anyone seriously know what they are buying into Wilmar for? Can any analysts really offer any value insights on Wilmar?

Wilmar is a huge conglomerate and sometime I find it confusing.

Vested
Odd Lots
GG

[Clement]

Does anyone seriously know what they are buying into Wilmar for? Can any analysts really offer any value insights on Wilmar?

Wilmar is a huge conglomerate and sometime I find it confusing.

Vested
Odd Lots
GG

Haha.. Yeah.. I'm gonna take this weekend to try to break it into parts and see if value can be found. The supply chain and distribution network is obviously difficult to replace and therefore valuable. The question is just how to understand the value drivers in this monster.

[tonylim]

Not only just the supply chain and distribution network , the brand names are valuable intangible assets, Almost every household know their brands.
Many PRC edible oil producers also buy palm oil raw materials from Wilmar because they do not grow their own palm trees.
Without own raw materials , edible oil producers can be at the mercy of the palm suppliers when supplies are tight. Wilmar don't have to face this problem and disrupt their productions and sales .
The World is very tough, biz without economic of scale is facing more difficulty to compete.

[Clement]

Not only just the supply chain and distribution network , the brand names are valuable intangible assets, Almost every household know their brands.
Many PRC edible oil producers also buy palm oil raw materials from Wilmar because they do not grow their own palm trees.
Without own raw materials , edible oil producers can be at the mercy of the palm suppliers when supplies are tight. Wilmar don't have to face this problem and disrupt their productions and sales .
The World is very tough, biz without economic of scale is facing more difficulty to compete.

From my research so far, Wilmar does not grow anywhere near the amount of fresh fruit bunches they are consuming, i might be wrong, just started researching last night. For this part of the supply chain, I think most producers will still be able to find a profitable processing spread. Wilmar's advantage here will probably be logistics.

[cfa]

Are there any other companies in same business as WILMAR , having same structure ?

[Clement]

Are there any other companies in same business as WILMAR , having same structure ?

Hi, golden agri is one that comes to mind. Olam is another.

[cfa]

Are there any other companies in same business as WILMAR , having same structure ?

Hi, golden agri is one that comes to mind. Olam is another.

Do they have strong brand products in big market like China ? Olam ??? More trader than manufacturer without own branding and distribution network. Golden Agri, maybe in plantation but no strong branding also. Wilmar still one class above them because they have captured 30% of edible oil market in World most populous market.
These 2 no comparison to Wilmar in terms of business structure.
Any others beside these 2 ?

[Clement]

Are there any other companies in same business as WILMAR , having same structure ?

Hi, golden agri is one that comes to mind. Olam is another.

Do they have strong brand products in big market like China ? Olam ??? More trader than manufacturer without own branding and distribution network. Golden Agri, maybe in plantation but no strong branding also. Wilmar still one class above them because they have captured 30% of edible oil market in World most populous market.
These 2 no comparison to Wilmar in terms of business structure.
Any others beside these 2 ?

Hi, it's true that Wilmar is abit more successful in it's consumer products business. But, relative to the size of the Company, the consumer products Business is small and margins are not all that great, with significant yoy deviations.