Sugar Wholesaler Proposal on Merar for a trade partner

7/30/2019 Sugar Wholesaler Proposal on Merar for a trade partner

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Containerized Sugar Operation(12,500 MT Monthly) Seeks JV

Partner/Financial Guarantee of$6.625 million. We Offer 68%

Annual ROI.Initial growth (first revenues) investment project in United States

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Country: United States

(/investors/investment-

projects/?country=United

States) Industry: Wholesales Trade


projects/?industry=Wholesales

Trade)

Stage: Initial growth (first

revenues)


projects/?stage=initial)

Project tags: Container


projects/?tag=container),

Sugar (/investors/investment-

projects/?tag=sugar), Sales


projects/?tag=sales)

Years in operations: 2

Employees: 3

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Page 1 of 5Containerized Sugar Operation (12,500 MT Monthly) Seeks JV Partner/Financial Guarant...

5/7/2013https://www.merar.com/investors/investment-projects/wholesales-trade/united-states/contai...


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Our company seeks a JV partner willing to provide afinancial guarantee (SBLC/BG) in the amount of $6.625million to enable a containerized sugar operation (sales of

12,500 MT monthly) to commence in South America. ROI of68% ($4.5 million) will be paid for use of the guarantee,which will be returned in full and unused at the end of 14months.

Our company is a direct mandate of the sugarsupplier/owner. Virtually all sugar sold from Brazil requires aone month guarantee and rolling monthly payments to payfor the sugar.

We have arranged with freight forwarders in the free zoneof Montevideo, Uruguay, to unload 12,500 MT per month ofour Brazilian sugar into a warehouse, and re-package it for

us into 20' containers and reship them where directed.Because both Brazil and Uruguay belong to the MERCOSUR,some tax facilities are added to those already provided byMontevideo, a city with complete and modern bankingfacilities for international traders.

During the last 18 months, we have had requests for tens ofthousands of tons of containerized sugar from smaller endbuyers wanting 100 to 5,000 MT monthly. Large sugarsuppliers choose not to supply buyers wanting less thanminimum 12,500 MT bulk shipload amounts.

In order to offer the smaller end buyers of containerized

sugar a contract, we must first sign a one-year contract withthe supplier.

In order to sign the contract with the supplier, we mustprovide them with a one-month shipment value guarantee.

The guarantee we seek from a JV partner is valued at ourcost of the sugar/freight forwarding of US$ 530.00 MT, orUS$ 6.625 million for an initial amount of 12,500 MT permonth in a one-year contract.

Required Investment:

$6,625,000

Minimum Investment:

$6,625,000

Date submitted: 27 April 2013

Project views: 37

Unique project views: 30

Project impressions: 801

Customer base: 500

ROI: 68% in 1 years

Type of investment: Other

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With the supply contract in hand, we can then offer mirrorimage contracts to the smaller end buyers of the sugar,which bundled will total the 12,500 MT amount available.

The end buyers' contract will require the end buyer toprovide an MT-103/23 payment instrument in advance ofany sugar shipment. This is simply a wire transfer of thebuyers funds to our bank with conditions for payment

release, stipulated in their contract, which requires thepresentation of the appropriate shipping documents normalfor any commodity sale.

Because the buyers' payments will have always beenreceived in our bank before a ship is ever loaded, there iszero risk that the JV Partners "guarantee" will ever becalled.

The guarantee we are seeking from a JV partner will entitlethat partner to a obtain a share of the profits at the rate ofUS$ 30.00 per metric ton: thats US$ 375,000 per eachmonth of the contract, or US$ 4,500,000 per year, a profit

of 68% over one year for the value of the SBLC/BG.Payment of profit share shall be made monthly after allcontainers for that month have been shipped.

The guarantee (fully funded, non-divisible/non-transferable)can be in the form of a Bank Guarantee (BG - from non-U.S.banks), or Standby Letter of Credit (SBLC). Again, with theend buyer's money already in the supplier's bank prior toshipping sugar, and with the sugar insured for 110% of thebuyer's purchase price value throughout the entireshipping/repackaging/re-shipping process, the JV partner's"guarantee" payment instrument is never at risk. Theduration of the guarantee instrument needs to be for 14

months, allowing for 30-45 days for first shipment, and 1-2weeks to collect payment for last shipment of the 12monthly shipments. Following receipt of payment for thelast contract shipment, the JV partners guaranteeinstrument is returned in full.

The JV partner can participate for one year, or opt in for upto 2 additional years (3 year total), if he simply wants to rollover the guarantee for the next 12-month operation for upto 3 years participation.

Interested investors can establish contact with us on Merar.

Competitive advantage:

Currently, there is no existing competitive operation asdescribed here. Freight forwarding of containers in Brazil issubject to a 30% export tax, which is not incurred if thesugar is shipped CIF out of Brazil, as we intend.

Rationale for the deal:




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Each month we receive requests from agents we use inseveral countries from numerous smaller end buyersseeking containerized sugar in amounts less than aminimum shipload (12,500 MT). No one company iscurrently specializing in taking care of the smaller endbuyers of sugar.

Our company is comprised of five companies already

established in 4 countries that provide the corporateframework in these countries necessary to operate thisoperation immediately. We are partnered with a longestablished freight forwarder and a sugar owner. Weanticipate that this operation can expand to 100,000 MT permonth during the course of one year.

Use of financing:

The financing required is in the form of a guarantee. We donot seek a cash investment of any type. The actual fundsbacking the guarantee will always remain in the JV partner'sbank account. The guarantee provided will not be called

because the smaller end buyer will have already provided acash payment instrument in advance of any sugar beingshipped to them. No payment, no sugar.

The total of the end buyers' payment instruments willALWAYS surpass the value of the JV partner's guaranteevalue PRIOR to any sugar being shipped to the end buyers.By contract, the guarantee cannot be used unless thebuyer's payment is defaulted. Because we require thebuyer's payment in advance and approved in advance byour bank (Santander, Montevideo, Uruguay), it is impossiblefor the buyer to default on the payment. Following receiptof the last payment from end buyers in the 12th month of

shipments, the guarantee is returned IN FULL unused to theissuer.

Opportunity for the investor:

By utilizing a guarantee instead of a cash investment, the JVpartner can earn a return of $4.5 million, paid out over thecourse of 12 months worth of shipments. Please note thatthe first shipment will take approximately 45 to 60 daysfrom receipt of the guarantee to occur. This is due to thenormal process of arranging the shipment of the sugar fromthe mills to dockside warehousing (12,500 MT requiresloading 500 trucks), and arranging with the shipping line for

a cleaned 12,500 MT vessel to arrive at the loading docks inSantos, Brazil.

There are typically anywhere from 75 to 130 vessels queuedup in the harbor area waiting for their turn at loading.Following loading, the ship needs 4-5 days to transit toUruguay, then unload into warehousing, then begin thereloading operation. This is the reason the guarantee mustbe available for 14 months instead of 12. Still, with no cash




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infusion required, the return of $4.5 million should beincentive for participation, in addition to the return of theunused guarantee at the end of the operation.

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Sugar Wholesaler Proposal on Merar for a trade partner