International trading company AST Group p.l.c. is preparing to raise funding through a bond issue on Prospects MTF, a market regulated as an MTF and operated by the Malta Stock Exchange in the coming weeks, in order to finance the acquisition of a multipurpose vessel which will serve as the company’s fully-owned distribution channel. Such set up will allow the AST Group to vertically integrate its operations into the logistics sector and provide value-added services to its clients.
The AST Group was founded in 2011 by Emmanouil Kalamaras, the Group’s Chief Executive Officer whereby it commenced trading in animal feed products to different European markets. The principal animal feed products which are traded by the Group are roasted guar meal korma, fish meal, Distiller’s Dried Grains and Soluble (DDGS) and HiPro Sunflower meal, sourced from suppliers based in India, Morocco, Hungary and Bulgaria respectively. Its clients range from smaller animal feed producers or end-users such as farmers who are equipped to produce their own feed, all the way to multinational companies with a global footprint and annual multi-billion Euro revenues.
Over the past years, AST Group has gone from strength to strength and now has branches in Greece, Cyprus, Hungary, Spain, France, as well as Malta. Mr. Kalamaras first came to Malta in 2013 and the island immediately drew his attention as a potential logistics hub for his operation. “As an EU member state, Malta is strategically positioned in relatively close proximity to the key existing markets and to other markets where the company intends to expand in the near future across the Mediterranean region and mainland Europe,” said Mr Kalamaras, whose own personal experience within the shipping industry spans over 10 years. “It also has a very strong trans-shipment ecosystem therefore facilitating the Group’s operations and access to market.”
To date, the AST Group has distributed the animal feed either by land – in containers loaded on trucks –or by sea – through chartering of third party vessels. The volume of stock held by the AST Group is minimal, given that sourcing only takes place after a contracted sales order. AST Group now aims to complement the animal feed operation by setting up a shipping operations and a logistics centre in Malta for the storage of animal feed products and distribution into markets around the Mediterranean and in mainland Europe, after it was awarded a Maltese licence to operate as a feed store and to import animal feed. The logistics centre will be situated close to the Malta Freeport Terminals and such set up will allow the AST Group to branch out into numerous growth areas, particularly in relation to fish meal given that “this is a seasonal product traded mostly in the summer months, so it needs a high level of inventory to maintain the continuity of supply and to expand the sales pipeline,” Mr Kalamaras explained.
Mr Kalamaras explained Malta’s appeal by saying that the country is open to business, has different sources of raising capital available, and has a highly reputable shipping registry. He also cited the vast supply of professional talent available in Malta – lawyers, accountants, financial advisors and corporate service providers – as reasons for Malta’s attractiveness as a logistics hub. Over the years, the Group has also enjoyed healthy partnerships with Maltese service providers within the logistics business. “A robust corporate structure made of companies registered in Malta is already in place to support the business expansion programme out of Malta,” Mr Kalamaras affirmed; Beppe Muscat serves as Non-Executive Director and Chairman of AST Group, together with William Wait and Dr Luca Vella as Independent Non-Executive Directors.
“The acquisition of the vessel will further contribute towards the Group’s vertical integration of its operations and to create a robust supply chain within the animal feed ecosystem,” Mr Kalamaras ended by saying. “We will be able to offer product sourcing at competitive prices, product warehousing in an EU jurisdiction close to the main markets, a strong product sales teams organised in offices located within target markets, and our own fully-owned product distribution channel.” With this investment in place, AST Group hopes its animal feed business will be further developed by introducing new products, cross-selling of its existing product lines, as well as expanding its distribution services from its hub in Malta into new territories throughout Europe.
Applications for the AST Group p.l.c. €2 million 5.5% 2018-2028 bond issue will be available from Financial Planning Services Limited in January 2018. Financial Planning Services Limited are the appointed Placement Agent, Manager and Registrar of this bond issue while Grant Thornton are appointed as Corporate Advisors to the Issuer.