Sri Lanka’s Carsons group owned Singapore based Good Hope Asia Holdings (GAHL) has successfully concluded the takeover of 3 operating entities of Premium Nutrients Bhd. (PNB), a specialty fats manufacturer with operations in Malaysia and India, a stock exchange filing said.
According to the disclosure by Carsons Cumberbatch (CARS), GAHL Group has now acquired a 100% stake in the three operating companies namely Premium Vegetable Oils Sdn. Bhd. (PVO), and Premium Fats Sdn. Bhd. (PF) each having manufacturing facilities in Malaysia, and Arani Agro Oil Industries Ltd. (AAO) which has a manufacturing plant in Andra Pradesh, India.
“This will further compliment the expansion in upstream plantations and create a secure outlet for its increasing produce” the statement said adding that more importantly it enables GAHL to directly gain access to value-added segments of the industry moving from its current commodity business.
The moves come consequent to the recent restructuring and consolidation of the Oil Palm plantation sector assets of Carsons under Goodhope Asia Holdings Ltd (GAHL).
The notice further said that GAHL envisaged evolving as an integrated player within the edible oils and fats industry.
“The rapid changes in the industry structure and dynamics made it imperative that GAHL extends its operations across the industry value chain and enhances product and market reach.” The notice further said that consolidation of sector assets under one entity would thus facilitate GAHL in leveraging on its combined asset strength to expand both its upstream business and downstream business, complementing the other.
GAHL will be able to mitigate commodity risks prevalent with upstream plantation operations, whilst at the same time being able to derive greater margins and value addition through specialty products.
Among the recently acquired subsidiaries, Premium Nutrients, is a pioneer in the edible oils & fats industry with over 25 years of expertise in the manufacture of specialty fats. The Company has innovated specialty fats for the bakery, confectionary, creamers and ice-cream industries through advanced research and development capabilities.
Operations of the three manufacturing facilities encompass solvent extraction of Palm kernel oil, refining of multiple oils including Crude Palm Oil (CPO), Palm Kernel oil (PKO) and Coconut Oil (CNO). In addition to the manufacture of specialty fats, margarines and butter blends, it also caters to the animal feed industry.
Premium groups exports specialty products to over 55 countries, catering directly and indirectly to multi-national players as well as regional brand leaders in the chocolates, confectionary and bakery industries. Its primary markets cut across the Middle East, CIS, Australia, China, North America, india and Europe. A majority of products are tailor-made to customer requirements as food ingredients for reputed international brands.
Further, the acquisition of Arani Agro Oil Industries Ltd. (AAO), provides direct access to the indian edible oils & fats market, considering the tremendous growth potential with an increasing middle income group.
With the sustained economic growth and greater consumer demand, the edible oils industry as well as the specialty fats segment is poised to experience constant growth, thus providing further opportunities for AAO to expand from its current geographic locations to other locations and markets.
Most importantly, the acquisition of PNB subsidiaries will enable GAHL to expedite value chain integration strategy that would otherwise have takenover a decade of effort to build on its own, with the required competencies and products for global markets and customer portfolios.
This acquisition will also create management and operational synergies through the combination of diverse competences and skills of GAHL and PNB subsidiaries, thereby resulting in increased shareholder value creation.
Through the expansion of volumes created by the acquired downstream operating companies, as well as the envisaged new product and market developments, GAHL would be in a position to generate constant increases in revenues and profitability.
The combined current turnover of the three PNB entities acquired is approximately RM 800 m (Rs. 29 Billion) whilst their tangible total asset base (which does not include Brands, Patents & Trademarks etc) and debt portfolio is approximately RM 334 m (As. 12.1 Billion) and RM 265m (Rs. 9.6 Billion) respectively.
The total consideration paid by GAHL group for a 100% stake in the said three entities is RM 117.95 million (approx. Rs. 4.27 Billion).
source - www.dailymirror.lk
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