3 Things You Should Know About Noble Group

Ser Jing - Let's Look at Noble Group's First Quarter Results (pic)Noble Group (SGX: N21) is a market-leading, global supply chain manager of agricultural and energy products, minerals and metals.

Founded in 1987 and headquartered in Hong Kong, Noble aims to source raw materials from low-cost producing countries (such as South America and Indonesia) to process, transport and deliver them to high-demand markets (such as Asia and the Middle East).

Agricultural products managed include grains and oilseeds, sugar, cocoa, cotton and coffee. The Metals segment includes iron and manganese ore, aluminium, steel and copper.

The company also deals with energy, supplying coal and coke, petrochemicals, ethanol and carbon credits. What’s more, the company is an independent ship owner and operator, providing sea transportation and vessel chartering.

Noble is the only global commodity company headquartered in Asia, employing over 100k people from 140 locations worldwide.

But did you know…

  1. Noble Group is ranked at position 76 in the 2013 Fortune Global 500 listing of the world’s largest companies, and position 713 in Forbes’ Global 2000 leading companies.
  2. Noble founder, Richard Elman began his career as a scrap metal labourer in England aged 15. Today, he and his family feature at position 29in Forbe’s 2013 list of Hong Kong’s 50 Richest, estimated to be worth US$1.8bn.
  3. Richard Elman attributes part of his good fortune      to an amber bead bracelet that he believes keeps bad energy out and good energy in. He’s been wearing it for 10 years and admits he’s “afraid to take it off”.

However, after a meteoric rise fuelled by a decade-long commodities boom, Noble Group is now facing difficult times having lost 16% of its value in the first half of this year, stating that its profits had been dragged down by losses at its agricultural unit.

Things may be starting to improve – its shares were up around 11% this month.

It is worth bearing in mind that companies such as Noble Group and for that matter any business that is involved in the commodities sector are not in total control of their own profitability. They are essentially price takers, which means they have little say in the prevailing price of the commodities they deal in.

As such their fortunes are in the hands of economic cycles, major consumers, production levels and, in the case of some commodities, even something as changeable as the weather. Under those tough operating conditions, a lucky amber bead bracelet seems like quite a good idea, or maybe we should call it a hedge.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.