IOI Oleochemical Industries Berhad (“IOI Oleo”) is pleased to announce that its indirect wholly-owned subsidiary, Alstersee 217. V V GmbH (to be renamed as IOI Oleo GmbH in the future) has reached a conditional asset purchase agreement with Cremer Oleo GmbH & Co KG to acquire Cremer Oleo’s entire oleochemicals manufacturing business in Germany for €89.4 million or RM433.3 million on 9 September 2015.
Cremer Oleo’s production facilities are located in Witten and Wittenberge respectively. The production plant in Witten offers a broad array of mostly branded oleochemical specialty products for the pharmaceutical, personal care, 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. Both plants combined offer a processing capacity of approximately 39,200 metric tonnes per annum.
As one of the leading oleochemical producers in the world, IOI Oleo sees the acquisition as a timely and synergistic opportunity for the company to move further up the value chain into a more specialised downstream oleochemical manufacturing business. The acquisition will enable IOI Oleo to expand into the higher margin pharmaceutical, cosmetics, food, and performance chemicals markets worldwide.
IOI Oleo regards the location of the production facilities as strategic as they are situated at the centre of the European Union Region which gives close proximity to key markets in Western Europe and emerging ones in Eastern Europe. The acquisition will also enable the transfer of advanced technical, research and development, application development and process know-how back to Malaysia, benefiting IOI Oleo’s existing oleochemical production sites in Malaysia.
Dato’ Lee Yeow Chor, the Chief Executive Officer of IOI Corporation Berhad (“IOI Corporation”) says: “This acquisition is an important step in the downstream diversification of IOI Corporation’s integrated palm oil business, following our successful acquisition and subsequent integration of the Netherlands-based Loders Croklaan’s specialty fats business about twelve years ago. We are confident about the future growth of this business and will work closely with the management to ensure minimal interruption to the customers and employees during the transition period before the completion of the acquisition”.
The acquisition is subject to regulatory approvals by the relevant authorities of Germany and Malaysia.