Cargill snaps up Indonesian starch, sorbitol player
The acquisition of 85.01 per cent of Sorini’s ordinary shares in two separate deals will bring it new manufacturing and supply capabilities in starch and starch derivatives, sorbitol, maltitol, dextrose monohydrate, maltose and maltodextrine. Present in Indonesia since 1974, Cargill’s existing plants make animal nutrition, cocoa, grain and oilseeds, palm, and sugar.
Bram Klaeijsen, president and regional director of Cargill Asia Pacific, said: “This acquisition will be an anchor point for future growth of our food ingredients business in Asia, particularly in Indonesia and South East Asia.”
Ingredients in Sorini’s product range also all have applications in cosmetics, personal care, and pharmaceutical products.
The two deals Cargill has struck, with PT AKR Corporindo and UOB Kay Hian Pte Ltd, have a combined value of IDR 2720bn (around US$300m). The former, subject to shareholder agreement, will see it acquire all of AKR’s shares in Sorini for IDR 3500 a share, leaving AKR to focus on energy, chemical distribution and infrastructure interest. The latter is said to be a “block” of shares.
The two deals are expected to close at the same time and Sorini will become a Cargill subsidiary. After that Cargill will have to make a tender offer to acquire the remaining shares of Sorini, as required under Indonesian law.
Sorini, which is listed on the Indonesian Stock Exchange, has seen sales of its sorbitol soar in Indonesia recently, but its customers are not limited to the high-growth Asia. Indeed, it supplies multinationals in some 70 countries worldwide.
Sorini and its subsidiaries operate two starch sweetener plants and five starch plants across East Java and Lampung provinces.
Klaeijsen said the acquisition will open up new synergies with Cargill’s existing starch and sweeteners set up, with customers to benefit from “new product offerings, enhanced technology and application capabilities, as well as the supply chain and risk management capabilities we bring to the business.”
Cargill has three regional starch and sweetener businesses: for Europe, Brazil and Asia. Cargill Starches & Sweeteners Asia has its headquarters in Shanghai, China and its products are sold directly to domestic customers through local sales teams or exported to other Asian countries.
It has a corn milling joint venture located in Song Yuan, Jilin province of China for native starch, modified starch, dextrose, glucose, and spray-dried products; and another joint venture in Shanghai that supplies high fructose 42. Two new plants also produce high fructose 55 mainly for cola bottlers in northern and eastern China.
A tapioca starch product line was launched April 2006 following the acquisition of a tapioca plant in Thailand.