Etika acquires 70% of Indonesian instant noodle manufacturer and distributor

Company completed S$3.5mln purchase expected to bring in new revenue stream and stronger foothold in Indonesia.

Further to the announcement dated July 5, 2010, Etika International Holdings Limited (“Etika”), one of the world’s largest manufacturers and distributors of sweetened condensed milk and a leading regional Food and Beverage (“F&B”) Group, announced on Wednesday the completion of acquisition of 70% equity in PT. Sentrafood Indonusa (“PTSF”) and PT. Sentraboga Intiselera (“PTSB”) (jointly referred to as the “Target Companies”) for an aggregate consideration of approximately Rp24.2 billion (approximately S$3.5 million). Etika has the option to acquire the balance 30% equity within twelve months for a nominal sum, according to Etika report.

Etika’s Chairman, Dato’ Jaya Tan, said, “We are pleased to welcome another member into Etika Group this year. For us, it signifies the beginning of a new F & B segment in the vast Indonesian market, and we are now one step closer towards achieving a stronger foothold there.”

The Target Companies are engaged in the business of manufacturing and distributing instant noodles in Indonesia. PTSF manufactures and distributes its instant noodles under the trademark of “Salamie” and “Cintamie” and is also an OEM manufacturer for a few private label products (eg. Mie Sehati and Pandaroo). PTSF’s products are currently distributed locally in Indonesia and overseas via authorised distributors to countries such as Saudi Arabia, Malaysia and Brunei Darussalam. PTSB is the main distributor for PTSF in the Central and East Java regions.

Etika’s Group Chief Executive Officer, Dato’ Kamal Tan said, “This is a strategic deal for us. This acquisition will provide us with an immediate entry into the instant noodle segment in Asia’s second largest market. At the same time, we now have access to additional factory space to expand production of our condensed milk line in Indonesia. This is in line with our plan to grow our core dairies business following the acquisition of PT. Vixon Indonesia in September last year.”

“Further, our combined distribution network will allow Etika, PTSF and PTSB to cross-sell our different products and extend the reach of our condensed milk in Indonesia, and instant noodles in Malaysia and over 60 countries around the world.”