Wilmar International plans to buy business assets of PCSMA

The purchase, pending approval, would increase subsidiary’s milling capacity by about two million tones.

Wilmar’s Australian-based sugar subsidiary, Sucrogen, has entered into an agreement with Proserpine Co-operative Sugar Milling Association Limited (PCSMA) to purchase the business assets of PCSMA, on a debt-free and cash-free basis, for A$115 million.

The agreement is subject to the approval of PCSMA members, the Australian Competition and Consumer Commission (ACCC) and the satisfaction of other customary conditions precedent.

Sucrogen currently owns and operates seven sugar mills in North and Central Queensland, producing almost half of Australia’s total raw sugar supply. Sucrogen CEO Ian Glasson said the purchase of PCSMA would increase Sucrogen’s milling capacity by about two million tonnes, to a total of 17 million tonnes, and increase raw sugar production by about 10 per cent, to 2.2 million tonnes.

Mr Glasson said, “We think Proserpine Mill is a good fit for our business. It’s a strong asset and there is great potential in the region for expansion of the cane-growing area. We will honour all existing cane supply and community support arrangements and provide continuing employment for staff and employees.”

PCSMA is a co-operative sugar mill, wholly owned by 214 sugarcane suppliers.