Archive for July 2010

Desmet & UPM in specialty fats research

DESMET Ballestra, a Belgian process engineer, is collaborating with Universiti Putra Malaysia (UPM) to find competitive and energy-efficient ways to produce specialty fats. 


"We'll be carrying out joint research with UPM to optimise the process of churning a variety of specialty fats," said Desmet Ballestra (M) Sdn Bhd managing director Khoo Kiak Kern.

"We've been doing research work with universities in Europe and the US. For palm-based specialty fats, we want to work with a local university," he said.

"As the global demand for specialty fats to make chocolate, ice cream, cake icing and vegan cheese increases, our clients would be keen on processes that heighten the quality of the food ingredients at more competitive rates," he said.

"We'll be supplying the parts for the pilot plant to UPM's Engineering Faculty soon. It will initially be able to fractionate 200kg of palm oil per trial," he told Business Times at the signing of a memorandum of understanding with UPM to optimise production and expand the variety of specialty fats from palm oil.

UPM vice-chancellor Prof Tan Sri Dr Nik Mustapha R. Abdullah said the partnership with Desmet is in line with the government's new economic model that seeks to upgrade human capital and meet the needs of a knowledge-based economy.

"It is also important for Malaysia to invest more and stay in the forefront of palm oil nutrition. With closer working relations between the public and private sector, we can optimise our resources to arrive at definitive findings," he said.

"This initiative with Desmet Ballestra will give a better practical exposure to 100 engineering students at our university," he added. Also present were UPM associate professor Dr Chin Nyuk Ling and lecturer Dr Mohd Noriznan Mokhtar.

Wilmar keen to expand sugar ops

SINGAPORE: Singapore's Wilmar International, the world's largest listed palm oil firm, said yesterday it was keen to grow its sugar business by setting up operations in Indonesia and Brazil.

Wilmar, which also deals in soyabean, wheat and rice, identified sugar as another core business on Monday when it agreed to buy Sucrogen, Sydney-based CSR's sugar business, for US$1.5 billion (US$1 = RM3.22).

"Sucrogen will allow Wilmar to build a leading position in sugar, starting with Indonesia," the Singapore-listed firm said.

Wilmar plans to combine Sucrogen, the world's second largest exporter of raw sugar and Australia's top maker of sugar-based ethanol, with its fledgling sugar operations in Indonesia.

Wilmar, the second-largest listed firm on the Singapore bourse, has a concession to develop 200,000ha of grassland in Indonesia's Papua island for sugar cultivation which it will start later this year. "The priority is to build the Indonesian sugar operations." - Reuters

Mewah plans US$500 million IPO in Singapore

SINGAPORE: Mewah Group, a palm oil firm with refineries in Malaysia, is planning to raise as much as US$500 million (US$1 = RM3.22) in a Singapore initial public offering (IPO) for expansion, two sources involved in the IPO said yesterday.

The planned listing, which will result in new investors owning 12-20 per cent of Mewah's enlarged share capital, is scheduled for the fourth quarter of this year, sources said. Credit Suisse and BNP Paribas are managing the offer, they added.

Mewah, whose main shareholders are Singaporean, owns three palm oil refineries in Malaysia and produces vegetable oil products include cooking oil, margarine and specialty fats used in ice cream, according to its website (www.mewahgroup.com). The refineries, namely; Ngo Chew Hong Oils & Fats (M) Sdn Bhd,  Mewaholeo Industries Sdn Bhd and Mewah-Oils Sdn Bhd are located at Semenyih, Pasir Gudang and Pulau Indah.

The firm also has several sister firms in Singapore whose activities range from marketing Mewah products to providing transport and warehousing services. "The group has approximately US$2 billion turnover (and) the refineries have a combined output of about 2.5 million tons per annum," a source familiar with Mewah said.

Mewah preferred to be described as a "Singapore-based group with refineries in Malaysia" rather than as a Malaysian firm, he added. - Reuters

Wilmar buys CSR's sugar arm for US$1.5b

SYDNEY/SINGAPORE: Singapore's Wilmar International is buying Sydney-based CSR's sugar business for US$1.5 billion (US$1 = RM3.22) in a surprise deal that trumps China's Bright Food Group and gives it control of more than half of Australia's raw sugar output.

CSR, the world's fifth-largest sugar-refiner, said yesterday Wilmar had agreed to buy its Sucrogen sugar arm, ending a year-long effort to either spin-off or sell the asset and pushing its share price up as much as 5 per cent in a weak broader market.

After a 150-year history in sugar, CSR is selling Sucrogen, a household name in Australia, to focus on its core building materials operations. Wilmar, the world's largest listed palm oil producer, is using the deal as a springboard for further expansion into sugar.

"This latest acquisition proves that Wilmar is well on its way to becoming a dominant global sugar player and will significantly raise the possibility of the injection of (Malaysian tycoon) Robert Kuok's sugar business into Wilmar," said Alvin Tai, an analyst at Malaysian brokerage OSK Group. Kuok is the uncle of Wilmar chief executive Kuok Khoon Hong.

The deal was also a coup for CSR which has been trying to demerge Sucrogen from its core building materials business for a year.

The CSR board over the weekend rejected a lower formal offer from China's Bright Food Group, which has been chasing CSR since the start of the year. One source close to Bright Food said the price agreed was A$1.68 billion (A$1 = RM2.71) and news of Wilmar's rival bid had taken it by surprise.

CSR chief executive Jeremy Sutcliffe, who was brought in to run the company in April due to his experience brokering major deals in the metals recycling sector, said Wilmar won the race with an offer at the "very last gasp. At the end of the day they (Bright Food) didn't quite get there in terms of price or certainty," he said.

UBS and Lazard advised CSR on the deal. Australia & New Zealand Banking Group advised Wilmar.

It was one of two major takeovers for corporate Australia yesterday after Centennial Coal Co Ltd agreed to a US$2 billion offer from Thailand's Banpu Public Co Ltd. The Australian government's watered down plans for a big mining tax late last week were expected to clear the way for a string of deals in the resources sector.

Wilmar's purchase price was A$1.347 billion for equity and A$403 million for debt, 6 per cent higher than a conditional A$1.65 billion offer Bright Food made to CSR's board late last week. Wilmar's shares rose as much as 2.3 per cent to S$5.88, (S$1 = RM2.31) outperforming a slight fall in Singapore's headline index.

"This is positive news as it'll help jump start their strategy to expand in the sugar business and (represents) the next growth driver for Wilmar," said DBS Vickers analyst Ben Santoso. He expected the new business to see synergies from capitalising on Wilmar's extensive distribution to China and Asia.

CIMB analyst Ivy Ng said the deal was positive in the medium term as it gave Wilmar knowledge to expand to other parts of Asia. "But in the short term, based on what they have so far it does not appear the acquisition will significantly increase their earnings," she said. "In the longer term, it would be good if they can replicate the business in other parts of Asia like China, India and Indonesia, but you won't see that tomorrow."

CSR said the deal was expected to be completed by the last quarter of 2010, and is conditional on approval by Australia's Foreign Investment Review Board. - Reuters