Press Room
July 13, 2005
German Version
Targeting future profitable growth: Cognis Deutschland GmbH & Co. KG (“Cognis”) and Golden Hope Plantations Berhad (“Golden Hope”) announce intention to expand oleochemicals joint venture
Cognis and Golden Hope today signed a memorandum of understanding stating their intention to target future profitable growth by expanding the scope of Cognis Oleochemicals (M) Sdn. Bhd., the existing joint venture in Malaysia, through the contribution of Cognis’ global oleo basic and derivatives businesses, comprising fatty acids, glycerin, oilfield chemicals, azelaic acid and pelargonic acid (“ozone acids”) and plastics technology.
The two companies have successfully cooperated in the production, marketing and sale of fatty acids, fatty alcohol, glycerin and associated products in Malaysia since 1989. Expanding the scope of this relationship globally will integrate and improve the future competitiveness of both companies’ operations. Cognis and Golden Hope both see substantial opportunities through the expansion of the 50:50 joint venture, which will rank as one of the leading global oleochemical companies with total revenues of more than €690 ($850) million (pro forma 2004, incl. sales to Cognis).
Golden Hope, already one of the leading plantation companies in Malaysia, will progress further towards becoming a fully-integrated vegetable oils and fats producer and processor. The expansion of the joint venture is thereby an integral part of Golden Hope’s strategy to further improve its competitive position by moving up the value chain. In addition, consistent with Golden Hope’s international expansion plans, the global scope of the new joint venture reinforces and expands European presence and offers direct access to the North American market. Golden Hope’s CEO Dato’ Sabri Ahmad comments: “This transaction will help us achieve significant downstream integration and provides us better access to the relevant markets in Europe and North America.”
For Cognis, this step ensures that the oleochemicals and other businesses contributed can fully exploit the benefits of close co-operation with a leading producer of natural oils. The expanded joint venture provides a platform for future investment and expansion with a long-term oriented partner. As Cognis CEO Dr. Antonio Trius explains: “This new oleochemical organization will have greater freedom to respond to global market needs and will benefit from the advantages offered by three regional businesses based on a single, globally-integrated supply chain.“
In preparation for the expansion of the joint venture, Cognis has initiated a carve-out of the businesses to be contributed, namely its oleo basic and derivatives businesses, comprising fatty acids, glycerin, oilfield chemicals, azelaic acid and pelargonic acid (“ozone acids”) and plastics technology. This process affects around 700 employees mostly in Germany, the USA and Canada. Together with staff of the existing Malaysian joint venture, the new organization will include around 1,100 employees. Contract negotiations are ongoing and the contribution of the businesses, which will be headquartered in Malaysia, is expected to occur around the end of 2005.
About Cognis
Cognis is a worldwide supplier of innovative specialty chemicals and nutritional ingredients. The company employs about 8,100 people, and it operates production sites and service centers in 30 countries. Cognis has dedicated its activities to a high level of sustainability and delivers natural source raw materials and ingredients for food, nutrition and healthcare markets, and the cosmetics, detergents and cleaners industries. Additionally, Cognis provides solutions for a number of other industries, such as coatings and inks, lubricants, textiles and plastics, as well as agriculture and mining.
Cognis is owned by private equity funds advised by Permira, Goldman Sachs Capital Partners, and SV Life Sciences. In 2004, Cognis recorded sales of €3.07 ($3.81) billion and an adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization and exceptional items) of €362 ($449) million euros.
About Golden Hope
Golden Hope has been in the plantation business for more than 160 years. It is one of Bursa Malaysia’s top 30 companies in terms of market capitalization with 26,000 employees. Golden Hope is also the first Malaysian public listed plantation group with downstream refineries and activities in oils and fats industries in Europe and South Africa. Golden Hope is a strong environmental advocate with global awards including the Forest Stewardship Council Certification (FSC), ISO 14001, ISO 9000, ISO 9001 and COC. It is the first plantation company in Malaysia to receive the Global 500 Award by the United Nations Environment Program (UNEP) for its “Zero Burning” practices. It has operations in seven countries (The Netherlands, Vietnam, China, Bangladesh, Indonesia, Germany and South Africa).
Since completing its rationalization exercise with Island & Peninsular Berhad in November 2004, Golden Hope focuses only on its core competency which is plantations and its downstream activities. It now owns 190,000 hectares of oil palm plantation land in Malaysia and Indonesia.
Contact
Wulf Klüppelholz, Corporate Communications Manager
Cognis Deutschland GmbH & Co. KG
Phone: +49-2173-4995-221
E-mail: wulf.klueppelholz@cognis.com
Internet: www.cognis.com