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Abu Dhabi, UAETuesday 21 August 2018

Billionaire targets the coffee and avocado toast brigade

While Stephen Ross is chasing the millennial customer, Aliko Dangote plans to sell fuel from Nigeria by 2020

RSE Ventures, a fund that invests on behalf of Stephen Ross, the chairman of Related, is leading a fundraising round to acquire a significant minority stake in an Australian-style coffee and cafe brand. Photo: Bloomberg. 
RSE Ventures, a fund that invests on behalf of Stephen Ross, the chairman of Related, is leading a fundraising round to acquire a significant minority stake in an Australian-style coffee and cafe brand. Photo: Bloomberg. 

Stephen Ross

Billionaire Stephen Ross, the chairman of Related and owner of the Miami Dolphins, is betting that avocado toast and Australian coffee aren’t just fads.

RSE Ventures, a fund that invests on behalf of Mr Ross, is leading a fundraising round in which it will acquire a significant minority stake in Bluestone Lane, said Nicholas Stone, founder and chief executive officer of the Australian-style coffee and cafe brand. Other new investors include March Capital Partners’s Jamie Montgomery. Returning backers include Barry Sternlicht’s family office Jaws and Jason Wright of Apax Partners.

The $19.5 million capital raising will value New York-based Bluestone, which is undertaking aggressive expansion plans, at about $100m, according to people familiar with the matter, who asked not to be identified. Stone declined to comment on the company’s valuation.

“RSE has some amazing brands. They understand how to grow and incubate lifestyle businesses and we think they’ll be a great long-term, patient, partner who can take the company to the next level,” Mr Stone said. “This capital gives us a chance to help our Australian-influenced coffee culture reach more customers and ideally become part of their genuine, daily escape.”

Bluestone’s earlier investors include David Barber, a co-founder of Blue Hill, the Michelin-starred restaurant, and Freemark Partners, the private investment firm for billionaire Howard Marks.

Mr Stone said Bluestone, which has 30 stores, plans to be operating at least 100 stores in the next three years after expanding into densely populated cities in Canada, the UK and Asia. It’s seeking to be the first premium, independent coffee brand that achieves global scale, he said.

Consumers have increasingly flocked to non-mainstream coffee brands, a trend that hasn’t been lost on some of the world’s largest food and beverage conglomerates. Last year, Nestle acquired a majority stake in Blue Bottle and in 2015, JAB bought Stumptown Coffee Roasters.

“Millennial customers are discerning and focused on more than simply a caffeinated product,” Mr Stone said. That’s why Bluestone is focused on a providing a broader experience that includes service and aesthetic elements as well as freshly prepared food like avocado toast.

RSE, which was launched in 2012, invests Mr Ross’s capital into private companies.

Aliko Dangote, president and chief executive officer of Dangote Sugar Refinery, said his new refinery can transform Nigeria by weening it off fuel imports. Photo: Bloomberg
Aliko Dangote, president and chief executive officer of Dangote Sugar Refinery, said his new refinery can transform Nigeria by weening it off fuel imports. Photo: Bloomberg

Aliko Dangote

Africa’s richest man, Aliko Dangote, plans to start selling petrol, diesel and aviation fuel by early 2020 from an oil refinery he’s building near Lagos, Nigeria’s commercial capital.

The $10 billion refinery, set to be one of the world’s largest and process 650,000 barrels of crude a day, should be near full capacity by mid-2020, Edwin Devakumar, group executive director at Dangote Industries, said in an interview at the coastal site, about an hour’s drive east of Lagos.

“People still have difficulty believing we can do it on time and within those costs,” Mr Devakumar said. “But we believe we can. It’s something of the size that’s rarely been done before. It’s huge.”

Mr Dangote, worth $12.2bn, according to the Bloomberg Billionaire’s Index, has said the refinery can transform Nigeria by weening it off fuel imports and generating foreign-exchange through exports. Despite being Africa’s biggest crude producer and an Opec member, the West African nation ships in almost all its petrol and diesel from abroad because of the decrepit state of its government-owned refineries.

Mr Dangote’s facility will probably produce about 50 million liters a day of petrol and 15 million liters (3.96 million gallons) of diesel, though output can be changed according to the demand for each product, Mr Devakumar said.

While Nigeria, a country of almost 200 million inhabitants, currently consumes about 35 million litres of petrol daily, Mr Dangote can export whatever surplus it produces, Mr Devakumar said.

“Once we start producing, we’ll be able to meet all local demand and we’ll also be able to start exporting,” he said.

The company has been in talks with oil traders including Royal Dutch Shell, Vitol Group and Trafigura Group about supplying the refinery with crude and buying refined products, according to Mr Devakumar.

“We are establishing a rapport with them, but there’s been nothing specific so far,” he said. “We’re flexible in terms of our feedstock. We’ll be able to use all the African crudes, American crudes and Middle Eastern crudes. We don’t want to be dependent on Nigerian crude."

Elon Musk made a series of rescue suggestions for the Thai cave boys via Twitter. Photo: Reuters
Elon Musk made a series of rescue suggestions for the Thai cave boys via Twitter. Photo: Reuters

Elon Musk

Billionaire Elon Musk offered his help to the rescue of 12 boys and their football coach trapped in a flooded cave in Thailand, by proposing a "tiny, kid-size submarine" made from part of one of his space company’s orbital rockets.

The chief executive of Tesla and Space Exploration Technologies made the suggestion before the rescue was completed in a Twitter message, saying he’d received "great feedback from Thailand" as members of his engineering team descended on the scene.

“Construction complete in about eight hours, then 17 hour flight to Thailand,” he said in one of a series of Twitter messages.

The boys and their coach were successfully rescued from their plight on Wednesday after a lengthy operation involving Thai Navy Seals and international volunteers to free them.

In the run up to the rescue, Musk, who studied physics, floated a number of ideas on Twitter on how to bring the stranded team to safety.

He suggested a rescue employing "a tiny, kid-size submarine using the liquid oxygen transfer tube of Falcon rocket as hull. Light enough to be carried by 2 divers, small enough to get through narrow gaps. Extremely robust."

In another tweet he wrote: "Continue to be amazed by the bravery, resilience & tenacity of kids & diving team in Thailand. Human character at its best."

Musk previously proposed using a double-layer Kevlar pressure pod or a long inflatable air sock to penetrate the narrow passageways and provide a rescue conduit.

"No need for SCUBA mouthpiece or regulator," Musk wrote about his suggested pods. "Training unnecessary & less susceptible to panic attack." Musk said they were being tested Friday afternoon in a pool with a subject who had never been scuba diving.

Any air sock or tube would have to be tough enough to withstand high water pressure - potentially two tons of force at a depth of 15 feet - and sharp rocks, said Douglas Hart, a professor of mechanical engineering at the Massachusetts Institute of Technology.

At one point Musk tweeted there’s "some good feedback from cave experts in Thailand" and that he’s "iterating with them on an escape pod design that might be safe enough to try."

"Also building an inflatable tube with airlocks," he wrote. "Less likely to work, given tricky contours, but great if it does."

At one point a spokesman for Musk said that the billionaire’s companies could assist by trying to pinpoint the boys’ precise location using SpaceX or Boring Company technology.

Billionaire Dhanin Chearavanont, chairman of Charoen Pokphand Group, has a net worth of $4.2bn, according to the Bloomberg Billionaires Index. Photo: Bloomberg
Billionaire Dhanin Chearavanont, chairman of Charoen Pokphand Group, has a net worth of $4.2bn, according to the Bloomberg Billionaires Index. Photo: Bloomberg

Dhanin Chearavanont

Thai billionaire Dhanin Chearavanont’s retail subsidiary CP All is considering an expansion of wholesale operations in China and India to tap the might of consumers in the world’s most-populous nations.

CP All’s chief financial officer Kriengchai Boonpoapichart said the firm’s cash-and-carry unit Siam Makro is studying opportunities in the two countries, as well as the possibility of setting up a store in Myanmar, having already opened an outlet in Cambodia.

"Siam Makro is on a new journey of expanding in overseas markets,” Mr Kriengchai said. “It will be a tough and challenging road, but it’s a good opportunity with large populations to tap, compared with Thailand’s mature market.”

Thailand’s billionaire business tycoons have stepped up acquisitions and investments abroad as an ageing population and increased competition dim the long-term domestic growth outlook. Earlier this year, Siam Makro said it had set up Lots Wholesale Solutions in India and planned to invest more than 10bn rupees ($145 million) over five years.

Siam Makro intends to open its first store in India soon and a second outlet in Cambodia, according to Kriengchai. CP All acquired Siam Makro for about $6.1bn in the country’s biggest ever takeover.

"It’s a risky and large investment for Siam Makro to expand into new foreign territory," said Sasikorn Charoensuwan, the head of research at Phillip Securities (Thailand). "It will take some time to break even as economies of scale come when many more stores are opened."

Mr Dhanin, whose investments include telecommunication, agriculture and insurance businesses in Thailand, China and other countries, has net worth of $4.2bn, according to Bloomberg Billionaires Index.

CP All operates more than 10,000 7-Eleven stores in Thailand, the most outlets after Japan, according to 7-Eleven’s website.

The company plans to spend about 9 billion baht ($271 million) a year to open at least 700 new 7-Eleven stores, said Mr Kriengchai. It will stock shelves with more health and beauty items as income growth is leading to greater demand for such products, he said.

Henry Cheng, chairman of Chow Tai Fook Jewellery Group. His father ranks as Hong Kong’s fourth-richest man, with a net worth of $15.7bn. Photo: Bloomberg
Henry Cheng, chairman of Chow Tai Fook Jewellery Group. His father ranks as Hong Kong’s fourth-richest man, with a net worth of $15.7bn. Photo: Bloomberg

Henry Cheng

Hong Kong billionaire Henry Cheng’s jewellery-to-property business empire will acquire Dublin-based Sky Leasing for about $2.8bn, including debt, to bolster the group’s aviation business.

Though the Cheng family’s Goshawk Aviation announced the deal last month, it didn’t disclose the value at the time. Of the total, 70 per cent of the purchase will be funded with debt and the rest from Goshawk parents Chow Tai Fook Enterprises and NWS Holdings, Brian Cheng, one of the patriarch’s sons and an executive director at NWS, said in an interview.

“The growth driver will be aircraft leasing in the next five years,” the younger Cheng said at his office in the city. “The good thing is our fleet is young and liquid. It’s like a wet market where you can easily sell. There’s always demand there.”

NWS and Chow Tai Fook are the latest to join a slew of companies in Asia to bet on aircraft leasing as a travel boom in the region fuels demand for planes from airlines, many of whom prefer renting rather than purchase to help cap cost of ownership. Four firms with links to Chinese owners rank among the world’s top 12 lessors, the top one being HNA Group's Avolon Holdings at No. 3.

Goshawk said June 21 that it agreed to buy the unit of Sky Aviation Leasing International from the Public Sector Pension Investment Board, one of Canada’s largest pension investment managers, and private-equity firm ATL Partners.

The transaction, subject to approvals, will add 51 aircraft to its fleet of about 130, according to Goshawk’s website. Goshawk is in the process of getting a credit rating to help access cheaper funds, after which an initial public offering would be the next step, Mr Cheng said.

Mr Cheng’s father ranks as Hong Kong’s fourth-richest man, with a net worth of $15.7 billion, according to the Bloomberg Billionaires Index.

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