UPDATED: Global palm oil trader mulls bigger Goodman Fielder stake

Tuesday 28th February 2012

Wilmar International, the world’s biggest palm oil trader, is considering pushing for a bigger stake in Australasian food ingredients maker Goodman Fielder after building up a 10.1 percent holding in the company.

The Singapore Exchange-listed company has emerged as Goodman’s biggest shareholder, and “is currently assessing whether to increase its shareholding,” it said in a statement to the SGX. Wilmar spent some A$115 million on building the stake, which it will pay for through internal funds.

“We look forward to working with Goodman Fielder and its management team to improve Goodman Fielder’s performance over time,” chairman and chief executive Kuok Khoon Kong said.

Goodman’s shares surged 30 percent to 67 Australian cents on the ASX and 27 percent to 85 cents on the NZX. That values the company at A$987.6 million by market capitalisation.

Wilmar’s shares gained 0.2 percent to S$5.08 on the SGX.

Earlier today, Goodman said it hasn’t received any proposals from anyone to buy the company outright, but had engaged in early discussions with the Singaporean firm about the “possible divestment of Goodman Fielder’s non-core assets.”

Goodman is considering selling its Integro food ingredients unit and the New Zealand milling operation.

Wilmar said all of Goodman’s brands are complementary to its consumer pack business and its Australian Sucrogen unit, bought in 2010, and including the Chelsea sugar refinery in Auckland. The Integro unit fits in with the Singaporean company’s oil business.

Earlier this month Goodman reported a 77 percent slump in first-half profit to A$21.5 million. It is seeking to restructure itself as rising commodity prices and tepid consumer demand forced it to write-off A$300 million from its baking division last year.

Wilmar gathered some local notoriety a year earlier when its Indonesian palm oil joint venture with Fonterra Cooperative Group subsidiary RD1 was criticised by environmental lobby group Greenpeace, who claimed the JV was destroying rain forests and seizing indigenous land without proper process.

(BusinessDesk)

BusinessDesk.co.nz

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