Wilmar buys Natural Oleochemicals for $140mln

The agribusiness company said the steady growth of the oleochemical industry is due to sustained economic development and increased global demand for an eco-friendly functional product.

Wilmar International Limited's 100% subsidiary PGEO Group Sdn. Bhd (PGEO) has signed a sales agreement dated 21 July, 2010 to acquire 91.38% of Natural Oleochemicals Sdn Bhd (Natoleo) from Kulim (Malaysia) Berhad (Kulim), for a cash consideration of RM 450,000,000, a Wilmar release said.

Based in Pasir Gudang, Johor, Natoleo is said to be one of the world’s largest oleochemicals producers with significant market share in Europe and Asia and a growing presence in USA. Its products such as glycerine, soap noodles, fatty acids, and esters are widely used in diverse industries such as detergents, home care, cosmetics and toiletries, plastics, pulp and paper, pharmaceuticals, food additives, grease and lubricants, paints and coatings, rubber and latex and polyolefins.

According to the announcement, the reason behind the investment is that the oleochemical industry is experiencing steady growth due to sustained economic development and increased global demand for an eco-friendly functional product which is viewed as a sustainable alternative to petrochemical products.

Natoleo’s well-established customer networks in Europe, USA and China are complementary to Wilmar’s, and its sizeable product portfolio and strength in high value-add downstream products enhances the company’s growth in oleochemicals, the release said.

The remaining 8.62% of Natoleo will be owned by the National Land Finance Co-operative Society, an independent third party.