Malaysia’s IOI Corporation Bhd, which wants to expand its value chain, has agreed to purchase Cremer Oleo GmbH & Co KG’s entire oleochemicals business in Germany for EUR 89.4 million (USD 99.9 million). Based in Putrajaya, the company is one of the world’s leading suppliers of Certified Sustainable Palm Oil.
Cremer Oleo’s oleochemical production facilities are located in Witten and Zur Hafenspitze. The production plant in Witten offers a broad array of mostly branded oleochemical specialty 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. The two plants have a combined processing capacity of approximately 39,200 tonnes per annum.
“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.
“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 company said.
It will also 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. In addition, this also mitigates the increased import tariff on Malaysian oleochemical into EU post Generalised Scheme of Preferences (GSP) withdrawal in 2014.
“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 Corporation said the net book value of the assets (net of liabilities) based on the latest audited financial statements for the financial year ended December 31, 2014 was EUR 90.3 million (USD 102.2 million).