Globalizing Malaysia s Palm Oil industry with EXIM Bank

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1 Globalizing Malaysia s Palm Oil industry with EXIM Bank The information and materials contained in this document are subject to change. Unauthorized use of EXIM Bank logo, name and copyrights are strictly prohibited. Not all products and services are available in all geographical areas. Whilst every effort has been made to ensure accuracy of the information contained herein, EXIM Bank cannot be held responsible for any inaccuracies, delays or omissions in information provided herein given the varied nature of risks, laws, rules and regulations in which EXIM Bank ventures into.

2 Introduction Malaysia s sole development bank dedicated to the promotion of external trade (cross-border). Shareholder Minister of Finance Inc., Malaysia (100%) Authorized Capital Paid-up Capital RM3.0 billion (USD million)* RM2.7 billion (USD million)* International Rating Fitch: A- Moody s: A3 Current Staff Strength 287 Offices Business Coverage Global Coverage Head Office in Kuala Lumpur and 3 Rep. Offices in Penang, JB & Kuching. Banking, Trade Credit Insurance & Advisory Financed & insured in 104 countries across 5 continents 4

3 Our Role To support exports & imports of goods and services AND overseas investments by Malaysian corporations via financing & export credit insurance services. Based on conventional and Islamic principles.

4 Focus of the Day Insurance Financing Short Term Buyer Credit Medium/Long Term Overseas Investment Financing Supplier Credit EXIM ADB TFP

5 Buyer Credit Financing to foreign buyers for purchasing goods & services from Malaysia. Financing is disbursed directly to Malaysian suppliers. Repayment is by the foreign buyers. 5

6 Buyer Credit Financing Structure 4. Agree to become Guarantor Honduran Bank 2. Introduce importer & guarantor bank 7. Check on buyer s financing availability 8. Issue LC or LU 10. Disburse payment 3. Requests to become Guarantor Malaysian Exporter 1. Signs sales agreement 6. Place order Honduras Importer 9. Ships goods

7 Benefits to Foreign Importers n Access to low borrowing cost in Malaysia. n Enhance Malaysian suppliers confidence in negotiation. n Enhance purchasing power. n Alternative to home borrowing. 7

8 Benefits to Malaysian exporters n Eliminate non-payment risk. n May become effective marketing tool. n Strategy to improve sales. 8

9 OVERSEAS INVESTMENT FINANCING

10 Terms and Conditions Purpose Financing of Cross border business ventures i.e. investment in plant, building, plantations etc. Margin of Financing Eligibility Tenor of Financing <80% of Project Cost Malaysian Co/JV partner <10 years inclusive of grace period (<2 years) Interest rate Currency Disbursement Cost of funds + spread USD or other applicable currencies Direct to Suppliers/Contractors Repayment From Project proceeds :- Monthly or Quarterly

11 SUPPLIER CREDIT FACILITY

12 Supplier Credit Facility n For Malaysian manufacturing & trading companies. n A short term trade financing for exports of Malaysian goods. 12

13 Type of Financing (a) Pre-Shipment Financing To finance purchase of raw materials, finished goods & overhead expenses prior to shipment. Note: Financing of overhead expenses is for manufacturers only. (b) Post-shipment Financing To finance receivable i.e. to enable Malaysian exporters to sell on credit. Note: Subject to no discrepancies on the Export Documents, exporters can obtain immediate funds upon presentation of Export Documents after shipment. 13

14 Margin & Period Of Financing Pre Shipment Manufacturer < 85% of export order. Trader < 90% of export order. <120 days Post Shipment < 100% of export value <180 days 14

15 Transaction Diagram 15

16 Joint initiative between ADB & Exim Bank to promote Malaysia s trade with Asia s emerging economies. Exim Bank is able to guarantee payment (by confirming LCs) of 79 participating banks from 16 emerging Asian countries.

17 Countries & No. of Banks Involved Afghanistan (1) Mongolia (4) Armenia (6) Nepal (8) Azerbaijan (5) Pakistan (13) Bangladesh (14) Philippines (4) Bhutan (1) Sri Lanka (4) Cambodia (1) Tajikistan (1) Georgia (2) Uzbekistan (3) Indonesia (2) Vietnam (10)

18 PAKISTAN BANGLADESH 1. Askari Bank Ltd 1. Asia Bank Ltd 13. United Commercial Bank Ltd 2. Allied Bank Ltd 2. Bank Asia Ltd 14. National Credit & Commerce 3. Bank Al Habib Ltd 3. Basic Bank Ltd 4. Bank Alfalah Ltd 4. Dhaka Bank Ltd 5. Faysal Bank Ltd 5. Dutch Bangla Bank Ltd 6. Habib Bank Ltd 6. Eastern Bank Ltd 7. MCB Bank Ltd 7. Standard Bank Ltd 8. Meezan Bank Ltd 8. Export Import Bank Bangladesh Ltd 9. National Bank of Pakistan 9. National Bank Ltd 10.NIB Bank Ltd 11.Soneri Bank Ltd 12.Habib Metropolitan Bank Ltd 10.Premier Bank Ltd 11.Prime Bank Ltd 12.South East Bank Ltd 18

19 SRI LANKA VIET NAM 1. Bank of Ceylon 1. Asia Commercial Bank 2. DFCC Vardhana Bank Ltd 2. Bank for Investment and Development of Vietnam 3. National Development Bank PLC 3. Hanoi Building Commercial Joint Stock Bank 4. Nation s Trust Bank PLC 4. Military Commercial Joint Stock Bank PHILIPPINES 5. Saigon Thuong Tin Bank* 1. Allied Banking Corporation 6. Vietnam Bank for Agriculture and Rural Development 2. Devt. Bank of the Philippines 7. Vietnam Export Import Commercial Joint Stock Bank 3. Philippines National Bank 8. Vietnam International Commercial Joint Stock Bank 4. Rizal Commercial Banking Corp. 9. Vietnam Joint Stock Commercial Bank for Industry and Trade 10.Vietnam Technological and Commercial Joint Stock Bank 19

20 EXIM BANK S EXPOSURE ALL AROUND THE WORLD

21 Geographical Exposure Middle East 8% Oceania 4% Africa 3% America 3% Europe 10% ASIA Asia (excluding Middle East) 72% Note * : as at 30 September

22 Industry Exposure Agriculture, 7.4% Transport, Storage & Communication, 2.3% Finance, Insurance & Real Estate Activities, 1.0% Others, 0.1% Mining & Quarrying, 8.4% Manufacturing, 21.5% Wholesale and Retail Trade, and Restaurant and Hotels, 11.3% Construction, 18.3% Electricity, Gas & Water Supply, 12.6% Government (Buyer Credit Facility), 17.2% Note * : as at 30 September

23

24 Thank You 24

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