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Agricultural commodities have been in sharp focus in recent months as food price rises have attracted headlines and, with commodity prices still close to record highs, what better time to float an agricultural commodities trading business?
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Greek company Soya Mills announced its intention to float on Aim this week, with a €50m (£39.5m) fundraising to plough into its internal expansion programme as it seeks to take advantage of investor demand for exposure to this booming sector.
Of course there is always the possibility that in the current torpid Aim market, raising €50m could be beyond Soya Mills - but initial interest is reported to be promising and the company is presenting to investors across the UK, Europe and even in New York. The company can fall back on a strong track record over several decades of operation since its establishment in the 1970's.
Soya Mills fills a crucial gap in the market between producers of agricultural commodities such as soya and wheat, and users. It imports significant amounts of soya from South America before processing it into either oil or meal in Greece and shipping it on to end customers. It does the same with grain, where it also has a joint venture in Bulgaria. Soya Mills also owns an olive oil bottling subsidiary and its own port at Kalamaki. Building on this, the funds from its Aim float will be put towards setting up a shipping joint venture with Tsakos Group and also later this year a biodiesel refinery should be completed, adding another leg to the business.
Although it may seem like madness to plough into a fundraising at the moment there are one or two Aim floats getting away and agricultural commodities are in demand right now. Soya Mills appears well placed to take advantage of market conditions with a significant upgrade in its activities, providing it can raise the necessary funds. Only time will tell, but this could be one to watch should it achieve its Aim ambitions - and just look at the performance of some other quoted fund groups (as highlighted in Twenty top performers).
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
