Hedge against commodity price volatility - Carson’s thrust into palm oil based manufacture in Malaysia & India


Carson Cumberbatch PLC, a major player in the global palm oil industry, last week announced the acquisition of a Malaysian oils and fats group with a strong presence in India in a Rs. 4.27 billion deal which gives it presence in value added products manufactured from palm oil.

The Sunday Island last week exclusively reported that this deal was in the pipeline and awaiting regulatory clearance.

A senior director of the Carsons Group said that this was the biggest recent acquisition of the group, remarking ``I can’t think of anything bigger we’ve done’’ and said that the investment will be part funded by internally generated cash and part by debt.

The acquisition involves the takeover of 100% of three of the operating entities of Premium Nutrients Bhd., a specialty fats manufacturer with operations in Malaysia and India.

The acquired entities are Premium Vegetable Oils Sdn. Bhd. and Premium Fats Sdn. Bhd., each with manufacturing facilities in Malaysia and Arani Agro Oil Industries Ltd. with a manufacturing plant in Andra Pradesh in India.

Carson’s said that Premium Nutrients is a pioneer in the edible oils and fats industry with a 25-year expertise in the manufacture of specialty fats for the bakery, confectionary, creamers and ice cream industries.

A total of 60,000 ha, of oil palm plantation have been developed by Carson’s in Malaysia and Indonesia with 40,000 ha. now mature. Crude palm oil production last year ran at 170,000 mt. and with expansion of plantations especially in Indonesia now slowing, larger players in the industry are sourcing new locations in other regions for land banks, Carson’s said in its latest annual report.

Entry into the downstream value addition chain will give Carson’s protection against volatile commodity price risks and also enable the company to earn better margins and value addition through specialty products, the company said.

The manufacturing facilities acquired encompass solvent extraction of palm kernel oil, refining of crude palm oil, palm kernel oil and coconut oil in addition to the manufacture of specialty fats, margarines and butter blends as well as servicing the animal feed industry.

The Premium Group exports specialty products to over 55 countries catering directly and indirectly to multinational players as well as regional brand leaders in chocolates, confectionary and bakery industries.

This group’s primary markets cut across the Middle East, CIS, Australia, China, North America India and Europe.

"A majority of the products are tailor made to customer requirements as food ingredients for reputed international brands,’’ Carson’s said.

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