Malaysia merger creates Asia agribusiness major

14 December 2006 14:48  [Source: ICIS news]

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LONDON (ICIS news)--The merger between palm oil refiner Wilmar and Malaysian Kuok group’s plantation and agribusiness assets would make it Asia’s leading agribusiness group with a stock market value of about $7bn and estimated revenues of $12bn.

The company said on Thursday that the merged entities would have a significant presence in the processing and merchandising of palm and laurics oil in Malaysia and Indonesia.

It added that in China, it would have a major presence in the processing and merchandising of agriculture products.

Integrated agribusiness group Wilmar International said on Thursday it planned to merge with the Kuok group’s palm plantation, edible oils, grains and related businesses in a deal worth up to $2.7bn in the latest shake-up of the Malaysian palm oil industry.

These businesses are held by PPB Oil Palms Berhad, PGEO Group and Kuok Oils and Grains.

In a separate deal, Wilmar would also acquire the edible oils, grains and related businesses of its parent company Wilmar Holdings, including interests held by Archer Daniels Midland Asia Pacific and its subsidiaries for $1.6bn.

The combined palm oil refining capacity of the two companies would be 9.6m tonnes/year, Kuok Khoon Hong, Wilmar’s chairman and chief executive, said at a press conference.

Wilmar will also become a significant biodiesel producer with a total capacity of 1.15m tonnes/year by end-2007, he added.

The companies are due to start up three plants in Indonesia, with a capacity of 350,000 tonnes/year each, in the first, second and third quarters respectively.

Kuok was confident that the company would survive in the biodiesel business in the long term as energy prices continued to look favourable.

Indonesian palm oil prices were lower than Malaysia and its biodiesel plants were vertically integrated, he added.

The combined group would also be a dominant processor and merchandiser of agricultural products such as edible oil, oleochemicals and specialty fat in key markets like China, India and the Middle East, Kuok said.

By: Hilde Ovrebekk
+44 20 8652 3214

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