In an exclusive interview with Singapore-based bunkering publication Manifold Times, marine fuel logistics firm Banle Group recently shared insights on the recent successful listing of CBL International Limited, its listing vehicle, on the Nasdaq Capital Market. 

Mr. Teck Lim Chia, Chairman and Chief Executive Officer provides details on how much was raised in the initial public offering (IPO) and its plans on using the net proceeds to further grow and strengthen its bunkering business:

MT: Could you give our readers a brief introduction of the Banle Group? 

Banle Group is an established marine fuel logistic company in Asia Pacific providing customers with one stop solution for vessel refuelling. We are a bunkering facilitator as referred to in the bunkering industry.

Our main market is the Asia Pacific market with business activities taking place in the major ports of Japan, Korea, China, Hong Kong, Taiwan, Vietnam, Malaysia, Singapore, Thailand, and other countries like Turkey, Belgium.

We currently have a network of over 40 ports in Asia Pacific region to supply marine fuel to our customers, making us one of the few bunkering facilitators that can provide network-based service in this part of the world.

We strive to provide our customers with the best quality bunker services and to become our customers’ best partner in providing tailor made and flexible solutions for vessel refuelling.

MT: How much was raised during the IPO? Was it USD 13.3million or oversubscribed at USD 15.3 million?

Initially, we offered 3,325,000 shares at an offering price of US$4 per share, raising USD 13.3 million. At the time of the IPO, the underwriters exercised their over-allotment in part for an additional 425,000 shares, hence, totalling 3,750,000 shares being offered, raising USD 15 million.

MT: During the announcement of the IPO, Banle said it intends to use the net proceeds to ‘enlarge the number of local suppliers to enhance its competitiveness’. Could Banle elaborate what this means to the bunkering industry? 

We intend to establish new business relationships with additional local bunker suppliers in additional ports for which we will need the financial resources to make payments in advance for transactions before those local suppliers consider offering any trade credit to us.

Making use of the proceeds from the IPO, we intend to commence the business relationships with the new suppliers who may request payment in advance, or the issuance of letter of credit for their sales of the marine fuel.

MT: Banle also announced it intends to use the net proceeds to ‘increase the service options available in the Singapore and South Korea markets’? How does this trickle down into Banle’s bunkering business?

We constantly receive inquiries from customers for quotations and orders. However, in the past, we may not be able to fulfil all enquiries due to limitation of financial resources or lacking sufficient local bunker supplies in certain ports. As mentioned above, with the proceeds from the IPO and the expansion of our network of supply, we are now in a better position to establish new business relationships with additional local supplies, which in turn, will increase our ability to provide more bunkering options to our customers.

MT: In relation to the above two questions above on Banle’s intentions on utilising the funds, what is Banle’s plan to turn them into reality?

We intend to penetrate the market by soliciting new marine fuel suppliers to capture the demand from our existing customers or new customers in the Singapore market. In particular, we intend to establish such new business relationships with local suppliers for which we might need to pay in advance for transactions. To facilitate market development in Singapore, we have set up a new office in Singapore and employed two staff members.

Similar to Singapore, it is a challenge for us to obtain trade credit from local suppliers without established business relationships. With our aim to strengthen our supply network in South Korea, we plan to develop business relationships with potential suppliers in Ulsan and other ports in South Korea in order for us to provide a more flexible supply network to meet the demand of our existing customers and potential customers. To facilitate market development in South Korea, we have employed one staff member who is based in South Korea.

MT: Can you describe the challenges to execute Banle’s expansion plans and how will the company overcome them in current market conditions?

The fluctuations in marine fuel price may affect our working capital requirements. If the marine fuel prices increase substantially, we could only purchase less marine fuel from our suppliers with the same level of financial resources. We are therefore vulnerable to such unfavourable changes from the fluctuation of marine fuel prices. In the event that there is a significant increase in the price of marine fuel, we might require additional working capital in order to fulfil our customers’ needs.

To mitigate the effects of working capital limitation and unexpected increase in marine fuel price, it is our strategy to strengthen the financial resources available to us by utilising bank facilities and to obtain better trade credit from our suppliers.

Photo credit: Banle Group
Published: 13 June, 2023