Netherlands-based Loders Croklaan Group has entered with the Malaysian-based Ugreat holdings into a conditional share sale agreement to acquire 100 per cent of the issued and paid-up share capital of Soctek. The company operates from a 9-hectare production site in the southern Malaysian port of Pasir Gudang.
The purchase comes a few months after the announcement of Loders Croklaan's plan to build a 2,500 million tonnes per day refinery in Rotterdam, the Netherlands. Since its acquisition by IOI Group in December 2002, Loders Croklaan has pursued a strategy to expand its palm oil-based manufacturing capabilities and strengthen its integration with the upstream oil palm plantations of its holding company.
"This acquisition is in line with the strategy of Loders Croklaan to become a world leader in the supply of palm based products to the food industry," said CEO Etienne Selosse. "Soctek will bring us a competitive manufacturing site in Asia for palm oil and palm kernel oil-based specialty products."
The subsidiary has 200 employees and specialises in the refining and fractionation of palm oil and palm kernel oil with a capacity of over 300,000 million tonnes of oil per year.
"The purchase will allow Loders Croklaan to grow in new geographical markets, particularly in Asia, and to re-enter product segments elsewhere in which we were previously not competitive", said Selosse.
He went on to say that the Pasire Gudang site would also be key to optimizing the company supply chain, adding that the facility would boost production overall production currently supplied by its Wormerveer, Netherlands and Illinois, US facilities, as well as a host of other smaller sites.
The Soctek division has been building up it revenue during the course of the past three years. In 2001 its turnover stood at MYR 127 million (€27.4m) but by 2003 fiscal year the turnover had jumped to MYR 234 million. However the increasing turnover has not always reflected in the company's bottom line, with a profit of MYR 50 million reported in 2002 and a loss of MYR 2.7 million last year.
Although Loders Croklaan did not reveal how much it was buying Soctek for, it did say that the financing of the acquisition would not present the company with any difficulties, adding that it had been ready to make such a purchase for some time now.