Unilever has announced that it is selling its edible oils business and palm oil plantation interests in the Ivory Coast, and will instead invest in a soap business in the country.
The Anglo-Dutch consumer goods firm has in place a strategy to focus on its core businesses, and the sale of the edible oils business, which has an annual turnover of €85m euros, is said to be part of this. The buyers of the business plus Unilever's interests in palm oil plantations Palmci and PHCI are Ivorian agro-industry company SIFCA and a 50:50 joint venture between SIFCA and two companies based in Singapore, Wilmar International and Olam International.
At the same time, Unilever is to acquire SIFCA soap subsidiary Cosmivoire, which has an annual turnover of €45m and a presence in West Africa. Buying this company is expected to boost Unilever's presence in the Francophone region.
Financial details of the transaction have not been disclosed. Approval is required by regional authorities, however, and if this is granted Unilever expects both elements to be completed by the end of 2008. A company spokesperson was not immediately available to explain the impact of this news on Unilever's supply of palm oil, which is used in a variety of food products and toiletries.
Sustainable palm oil Last month Unilever made a pledged to use only palm oil certified as sustainable by 2015, and supported calls for a moratorium on further deforestation for palm oil in Indonesia.
"Suppliers need to move to meet the criteria, by getting certified both the palm oil from their own plantations and the palm oil they buy from elsewhere," said Patrick Cescau, Unilever CEO. The announcement was made at the Prince of Wales' May Day Climate Change Summit in London.
Unilever said it plans to take a leading role in establishing a certified supply chain for palm oil production. Cescaus added: "We also intend to support the call for an immediate moratorium on any further deforestation for palm oil in Indonesia."
Divestment plan Last August, Unilever said it was planning to divest of businesses with a combined turnover of €2bn, but which are neutral to its operating margin due to costs that can't be covered.
So far since then it has made agreements to sell its Lawry's and Adolph's seasoning blends and marinades business in the US and Canada for €410 million; and its Boursin brand to Le Groupe Bel for €400m. Unilever is also expected to sell its US laundry business.
Other improvements to its margins include a plan to group countries by clusters and streamline regional structures, reduce supply chain costs, and reduce its annual cost base by around €1.5bn by the end of 2010.