Malaysia's Sugar King Kuok has gone global

PETALING JAYA: The Sugar King has gone global.

Months after Tan Sri Robert Kuok-controlled PPB Group Bhd sold its entire local sugar operations to Felda, the billionaire once dubbed the Sugar King of Malaysia acquired Sydney-based CSR Ltd’s sugar business for A$1.75bil (RM4.73bil).

The deal gives Singapore-listed Wilmar International Ltd control over half of Australia’s raw sugar output.

Wilmar, headed by Robert Kuok’s nephew Kuok Khoon Hong, is 18.34% owned by PPB Group. The two firms are controlled by Kuok Brothers group of companies.

“This latest acquisition proves that Wilmar is well on its way to becoming a dominant global sugar player and will significantly raise the possibility of the injection of Robert Kuok’s sugar business into Wilmar,’’ OSK Research analyst Alvin Tai said in a quick update on Wilmar after the deal was announced yesterday.

According to OSK, Robert Kuok owns some 200,000ha of sugar cane plantation in Indonesia.

Yesterday, CSR announced that it had accepted Wilmar’s bid to buy its sugar and renewable energy unit, Sucrogen Ltd.

In March this year, Wilmar said it plans to start a venture into sugar cane plantation in Indonesia. Wilmar is already the world’s biggest palm oil trader and derives half its revenue from businesses in China.

Wilmar’s purchase price was A$1.347bil for equity and A$403mil for debts, which was 6% higher than the offer by China’s Bright Food Group Co to the CSR board late last week.

“Wilmar intends to build a significant sugar business, utilising its proven integrated agribusiness model to replicate its success in other agri-commodities,’’ it said in a statement posted on its website yesterday.

“The acquisition of Sucrogen will jumpstart this strategy to expand into sugar,’’ it said.

Sucrogen is the largest raw sugar producer in Australia, and through Queensland Sugar Ltd (QSL), the second largest exporter of raw sugar in the world.

Wilmar said it intended to use Sucrogen’s proven expertise in the sugar business to pursue growth strategies in “Indonesia and other high potential Asian markets.’’

Shares in Wilmar shot up 13 cents, or 2.3%, to S$5.88 in Singapore yesterday, while PPB Group shares declined six sen, or 0.4%, to RM15.92 on Bursa Malaysia.

CSR said the deal was expected to be completed by the final quarter of 2010, and was conditional on approval from Australia’s Foreign Investment Review Board.

In November last year, PPB Group sold its sugar refineries and sugar cane plantation in Malaysia to Felda for RM1.25bil after four decades in the business. The deal was completed earlier this year.

Malaysians consume some 1.3 million tonnes of sugar a year, and the country needs to import almost all its raw sugar requirement from producers in countries like Australia.

Currently, there are four sugar refineries in the country. Kilang Gula Felda Perlis and Malayan Sugar Manufacturing are now controlled by Felda, while both Kilang Gula Padang Terap and Central Sugar Refinary Sdn Bhd belongs to Tradewinds (M) Bhd.

  WILMAR-C3 :  [Stock Watch]  WILMAR-C4 :  [Stock Watch]For latest Bursa Malaysia indices, charts and other information click here

For latest Bursa Malaysia indices, charts and other information click here

Related Stories: Wilmar plans to invest US$2bil in Indonesia Wilmar says tax office probing Indonesia units PPB awaits outcome of Wilmar probe Singapore’s Wilmar looking into tax fraud claim Wilmar profit up, slow sales growth seen Wilmar Q4 profit up 18%, capping record year

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Business News

F&N posts higher sales in Q3, but rising costs dent earnings
Political turmoil weighs on Bursa
As China's recovery wobbles, economists expect more policy easing
Thai holds key rate at record low amid COVID-19 surge
Sony posts Q1 profit jump on pandemic demand for devices and content
LBS Bina records property sales of RM684m as at end-July
Airline industry statistics confirm 2020 as worst year on record
Merchantrade Asia, NPCI offer real-time remittances to India
DNeX’s SilTerra bags RM1.69b long-term contract from China’s Chipone
Solarvest bags RM66m contract for solar PV plant in Perak

Stories You'll Enjoy