IOI Corp buys oleochems business of Germany's Cremer for RM433m

PETALING JAYA: IOI Corporation Bhd is buying the entire oleochemicals business of Germany's Cremer Oleo GmbH & Co KG for 89.4 million euros, or about RM433 million.
Cremer has two oleochemical production facilities at Arthur-Imhausen-Strasse (Witten Plant) and Zur Hafenspitze (Wittenberge plant) in Germany respectively. The plants offer a combined processing capacity of some 39,200 tonnes a year.

In a stock exchange filing yesterday, IOI Corp said the acquisition will be made through its investment vehicle, Alstersee 217 VV GmbH, which entered into an asset purchase agreement (APA) with Cremer yesterday.
In a separate announcement, IOI Corp said Acidchem International Sdn Bhd, the wholly owned unit of its subsidiary, IOI Oleochemical Industries Bhd, yesterday acquired 25,000 1 euro shares for a 100% stake in Alstersee from Foratis Gründungs GmbH for 27,600 euros cash.
The APA entails Alstersee, which is to be renamed IOI Oleo GmbH, to acquire Cremer's entire oleochemicals assets.

The net book value of the assets (net of liabilities) based on the latest audited financial statements for the financial year ended Dec 31, 2014 was 90.3 million euros (RM442.84 million), it said.
"The proposed acquisition represents a timely and synergistic opportunity for the group to move further up the value chain with an investment in more specialised downstream oleochemical manufacturing business, which has two production plants and an established customer base comprising a number of multinational and large European companies," IOI Corp said.

"The proposed acquisition will enable the group's oleochemicals division to expand into a new product range to serve the higher margin but difficult to penetrate pharmaceutical, cosmetic, food and performance chemicals markets worldwide."
The production plant in Witten offers a broad array of mostly branded oleochemical speciality products for the pharmaceutical, cosmetic, food and performance chemicals markets worldwide. The Wittenberge plant provides high performance capacities for esterification with multi-step short-path distillation, distillation and fractionation of fatty acids and production of medium-chain triglycerides.

IOI Corp said it will establish new production sites in the centre of the European Union, taking advantage of close proximity to key markets in Western Europe and emerging ones in Eastern Europe.

"Lastly, the proposed acquisition will enable the transfer of advanced technical, research and development, application development and process know-how back to Malaysia and benefiting the existing oleochemical production sites within the Group's oleochemicals division," IOI Corp said.
The group expects to complete the transaction by the first quarter of 2016.