an established vertically integrated palm oil production ...€¢construct a palm kernel oil...

An Established Vertically Integrated Palm Oil Production Company, Cote d’Ivoire

Investor Presentation July 2014 www.dekeloil.com AIM:DKL

NURSERY PLANTED LAND 60T/HR MILL SMALLHOLDER PRODUCTION EXPANSION LAND

DEKELOIL ● A VERTICALLY INTEGRATED PALM OIL PRODUCTION COMPANY ● JULY 2014

OVERVIEW

An AIM quoted palm oil developer

51% ownership of Ivory Coast palm oil project

Producing revenues from its 60 t/hr mill, which is

one of West Africa’s largest

Strategy to expand the Company’s existing

plantation assets with the objective of becoming a

leading West African CPO producer

Demand for palm oil estimated to double by 2020

Likely to attract interest from south east asian

palm oil giants

Ve

rtica

lly Inte

gra

ted

1m plants pa

Nursery

2,000 ha of

Planted

Estates

5,000

Smallholders

Providing FFB

Production

from 60 t/hr

Mill

26,000 ha

Expansion

Land


MILESTONES SINCE LISTING

Mar 2013 Apr-Jun 2013 Jul-Dec 2013 Feb 2014 Mar-Apr 2014 Jun 2014

• AIM listing

• Arrival of

Mill on site

• Commenced

construction

• Award of

Effluent

Treatment Plant

contract

• Mill Operational

• Nubuke

Investment

• 2nd off take

• First

production

• First CPO

Sales

• First hub site

• First quarterly

production

• Improvement of

extraction rate

• Second hub site

• Operations team

recruited

• Software

implementation

• 1st off take


ASSETS WELL POSITIONED IN COTE D’IVOIRE

Expansion Plan

• 24,000 ha for plantations

• 60t/h mill

• New Nursery (subject to

funding)

Existing

• 27,000 ha small-

holders

• c.1,900 ha company

plantations

• 60t/h mill

• 1M plants Nursery

Guitry

Ayanouan

Advantageous location

and existing

infrastructure

Existing operations are

located in Ayanouan,

2hrs from Abidjan’s port

Expansion land is located

in Guitry, 4hrs from

Abidjan’s port

Good road links to the

port and to Ghana


DEVELOPMENT STRATEGY

CURRENT

• Produce 16,000-20,000 tons of CPO in 2014

• Proof of logistics solution from smallholders

• Implementation of ERP system

• Diversification of offtake partner base

IMMEDIATE, SUBJECT TO FUNDING (1-2 Years)

• Develop a further 3,000 to 5,000 ha of company plantations in close proximity to the first mill and

increase yields of smallholders’ plantations

• Construct a palm kernel oil crushing facility

• Commence operations at 24,000ha Guitry including new nursery and 1,000ha of estates

• Finalise first land acquisition in Ghana of 10,000ha

MEDIUM TO LONG TERM (2-5 Years)

• Expand planting at Guitry and construct second 60tphr palm oil mill

• Commence first nursery and pilot planting in Ghana

• Review new projects in Cote d’Ivoire and bordering countries

Increase production as quickly as possible from the first project and

fast track development of Guitry project


GLOBAL PALM OIL MARKET & CORPORATE ACTIVITY

Palm oil is the most widely used edible oil in

the world

Demand estimated to double by 2020

Supply side limited by lack of land availability

in traditional growth zones in Malaysia and

Indonesia

Palm Oil ‘000t Production Consumption Balance

Benin 35 110 (75)

Cote d'Ivoire 300 170 130

Ghana 120 160 (40)

Guinea 50 75 (25)

Liberia 42 61 (19)

Nigeria 850 1240 (390)

Sierra Leone 36 44 (8)

Togo 7 90 (83)

Source: USDA, 2012Note: Data for ECOWAS palm oil producing countries, as of 2011

International palm oil majors currently entering or expanding in West Africa to address lackof land in Malaysia and Indonesia

Worlds three largest palm oil companies; Wilmar, Sime Darby and Golden Agri have enteredWest Africa

2014 - KLK, one of the leading global plantation companies, has acquired a 63% interest inLiberian-based Equatorial Palm Oil at a significant premium to DekelOil

DekelOil is currently one of the only established, palm oil developers with contiguous landnot in partnership with a major asian palm oil company

RECENT CORPORATE ACTIVITY IN WEST AFRICAN PALM OIL SECTOR: A SNAPSHOT


COTE D’IVOIRE: AN IDEAL ENVIRONMENT

Cote d’Ivoire has a well established palm oil industry

with an estimated 250,000ha of palm oil plantations

Modern infrastructure: land, sea (largest port in West

Africa), air, electricity and communication

The Directors believe the market is relatively

fragmented with potential acquisition opportunities

Company No. of

Mills

Hectares Annual

tons FFB

Palm Oil

production

PalmCI

(SIFCA, Wilmar &

Olam)

12 39,000 1,107,443 250,000

SIPEFCI 2 11,035 264,083 56,778

Palm Afrique 2 7,100 295,200 59,040

SOGB 1 6,041 110,000 22,000

17 63,176 1,776,726 387,818

Highly dominant agriculture industry:

Existing agriculture workforce

Existing commodity trading

infrastructure

The world's largest producer and

exporter of cocoa beans and significant

producer and exporter of coffee and

palm oil

Economy grew by 8.7% in 2013 (source

IMF – official figures not yet available)


AYANOUAN – HOME TO ONE OF WEST AFRICA’S LARGEST MILLS

60 ton/hour mill, largest in West Africa, now

operational as at March 2014

Total Mill site size - c.14 hectare, mill floor base

- c.9,000 s.q.m.

At full capacity, the Mill can produce 75,000

tons of CPO (potential revenue of $US64m at

palm oil price of $US850/tn)

An effluent treatment plant (‘ETP’) is being built

– leading provider KIS Group

Completed recruitment of all Mill operational

management and the operational team,

including the Mill manager, the Mill maintenance

manager and Shift Managers

Simple CPO Processing Methods

Smallholder fruit

delivery

DKL pays price

proportionate to

CPO price


MILL SITE – 2014 - POST CONSTRUCTION


LOGISTICS: RUNNING SMOOTHLY

The recruitment of logistics zone managers has beencompleted to coordinate the delivery of fruits to thecollection points and Mill

Undertaking detailed planning with local cooperatives toenable the adequate and efficient delivery of feedstockfrom local smallholders to the Mill

The first two Collection Points now operational providingmultiple drop-off points for smallholders and managescongestion as trucks make deliveries for processing

The reception area at the Mill has been designed to betwice the size of those at traditional 60 tph mills forefficiency purposes

Contract signed with a subcontractor to transport fruitsfrom the Logistics Collection Points to the Mill

Developing an effective logistics network to ensure timely delivery of fresh fruit

bunches ('FFB') to the Mill via Collection Points


FIRST MILL FEEDSTOCK

Small Holder Estates

Contracts with over 5,000 small

holders over 27,000 ha of existing

plantations

Estimated annual yields from small

holders of 8-12 tns/h of Fresh Fruit

Bunch

Company Estates

1,900 ha planted to date at Ayanouan,

partly yielding

Costs to maturity: US$2,000/ha to

US$2,700/ha, lower than West African

competitors

Mature plantations in Côte d’Ivoire have a

peak yield of 20-24t


PRODUCTION AND SALES

Month/s CPO

Production

(t)

Kernel

Production

(t)

FFB

Processed

(t)

Extraction

Rate

(%)

CPO Sales

(‘t)

Average

Sales Price

(US$)

March 1,617 189 7,891 21 594 882

April -

June5,943 1,077 24,936 23.8 4,965 936

Total 7,550 1,266 32,827 5,559

AIPH Pricing achieved base on CIF Rotterdam CPO price

Operating profitability achieved in the Company’s first full month of operations

Three off take agreements in place, all with local refineries

By selling the CPO locally, the Company benefits from reduced transportation, insurance and

marketing costs


INCREASING FFB STRATEGIES

Step 1 Step 2 Step 3 Step 4 Step5 Step 6

Additional

Hub Sites

Agreements

with large

farmers

Performance

Bonus system

(discount on

fertilizer and

plants, Free

EFB)

Local PR

Village to

Village

Appointed

extensive

supervisor

network

Natural Improvement

• Full year

operation -

improved

payment system

• Increased local

awareness

• Confidence in

operations


FIRST MILL ECONOMICS AT MATURITY

Description Calculation

FFB Received 350,000

CPO Produced Extraction Rate – 23%

Pricing $US900/tn $US72.5m

Kernels Produced Extraction Rate – 5%

Pricing $US250/tn $US4.5m

Total Revenue $US77m

EBITDA Margin Mid point 28% $US21.5m

Interest Expense 10.5% on $US20m $2.1m

Tax 13 year zero tax exemption nil

Net Profit After Tax $US19.0m

DekelOil Public Share 51% Share 9.7m


EXCELLENT VALUE IN COMPARISON TO PEERS

Name Market

Capital

(£m)

Asset

Ownership

(%)

Planted

Hectares

(Ha)

Small

holder FFB

Crude Palm Oil Production

(‘000)

Mill

Production

(Tonnes)

2014e 2015e 2016e

Asian

Plantation 103.57 100% 13,000 100,000 52 78 95 60

Equatorial

Palm Oil33.40 50% 1,400 10,000 1 1 1 5

Palmci193 100% 39,000 620,000 250 250 250 360

DekelOil

Public Ltd18.91 51% 1,900 220,000 17 31 32 60


BOARD OF DIRECTORS

Andrew Tillery

Non Executive

Chairman

25 years operational management and private equity experience in Africa and other emerging markets

including 10 years as a CEO in Cote d'Ivoire, West Africa where he had responsibility for managing a group of oil

palm operations and founded a natural rubber business. Holds two Masters degrees from Oxford University, an

MBA from the University of Chicago. Currently a Non executive director on 3 African agribusiness boards and

adviser to several agribusiness investment funds in sub-Saharan Africa

Youval Rasin

Chief Executive

Officer

Founder of DekelOil and has held senior management positions in various companies within the Rina Group, a

family holding company with interests in agriculture, mining, hotels etc. Qualified lawyer and active in Ivory

Coast since 2002 with 7 years’ experience in agro-industrial projects including 5 years in the Palm Oil Industry.

Shai Kol

Chief Financial

Officer

Co-Founder of DekelOil. CPA & MBA graduate. 13 years work experience in finance, with significant business &

international exposure. former KPMG corporate finance. Financial director for an international software

company, Director of finance and business development for Yellow Pages leading fund raising and M&A

activities.

Lincoln Moore

Executive

Director

For the past 5 years Lincoln has been active in the West African oil palm industry in Liberia and Sierra Leone

including establishing and raising finance for palm oil developments. Former CFO of Sierra Leone Agriculture

Ltd and former executive director of AIM listed Northcote Energy Ltd. Chartered Accountant and former senior

manager at Deloitte and Touche.

Richard Amon

Non Executive

Director

Richard Amon is an Ivorian national and member of the Royal family of Abengorou, part of the Agny which is

one of the largest ethnic group in Cote D’Voire. Mr Amon is a former Notary and is a co-founder of DekelOil. Mr

Amon’s key role is to assist with relations with the community, small holders, co-operatives, in addition to

government relations. Mr Amon holds a law degree from Montpellier University, France.


SOCIAL AND ENVIRONMENTAL

RSPO member and certification process to

commence shortly

Majority of planting over previously cultivated

areas

Planting in partnership with local communities

Palm Oil effluent treatment plant under

construction – completion in 2014

All environmental permits in place

Employ over 300 staff – majority local

management

Small holder initiatives in place

Various local community projects in place


INVESTMENT SUMMARY

Production Revenues and operating profitability achieved from production at palm oil mill in Cote d’Ivoire

Good mill performance – high extraction rate.

Three local Off-take agreements to diversify sales outlets

Expansion Ramping up production at Ayanouan in 2015

Plans to expand company owned planted land at both project areas to become a leading

West African CPO producer

Continued assessment of synergistic project opportunities in Cote d’Ivoire and region

Location

Cote d’Ivoire is a leading palm oil and agricultural producer in West Africa – suitable

infrastructure

West African palm oil projects in strong demand by majors looking to expand production

outside of Malaysia and Indonesia

Asset Backed 51% interest in one of West Africa’s largest CPO mills

28,000 hectares of brownfield land in Cote d’Ivoire – 2,000 ha of which is already planted

World-class nursery producing world-class plants

Support Ayanouan is under a 51:49 JV with Indian conglomerate The Siva Group

Increased institutional representation across shareholder register

Government support by way of 13 year tax relief across operations


CONTACTS

Youval Rasin

Chief Executive Officer

Mob: +972544 60467

Email: [email protected]

Lincoln Moore

Executive Director

Mob: +447500 090 139


DEKELOIL

Andrew Craig

Tel: +44 (0) 20 7496 3000


Elisabeth Cowell/Frank Buhagiar

Tel: +44 (0) 20 7236 1177


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