August 11, 2008

Cargill Keen on Cocoa, Specialty Fats Businesses

By Ooi Tee Ching

AMERICAN agribusiness giant Cargill Inc, which owns palm oil refineries in Kuantan and Port Klang, is keen on buying into cocoa and specialty fats businesses in Malaysia.

"We've attempted to make a couple of acquisitions in Malaysia in the last few years but they fell apart in the final stage," said Cargill Asia Pacific Holdings Pte Ltd president Paul Conway.

"One deal fell apart because it appeared in the media. The vendor was upset and we were upset too," he said.

Back in 2005, Cargill bid for Port Klang-based Intercontinental Specialty Fats Sdn Bhd (ISF) but Japan's Nisshin Oillio Group Ltd beat them to it with a higher offer. Despite failing to acquire ISF then, Cargill has not given up hope on the food ingredient business in Malaysia.

"We are always on the lookout for acquisitions, we're interested in cocoa and specialty fats," he said.

Conway was speaking to reporters after officiating at the opening of its southeast Asia Application Centre for Food and Beverage in Kuala Lumpur yesterday.

Cargill's food scientists at the centre develop flavours for beverage, dairy, sugar and chocolate confectionery. They also carry out texturising tests on dairy and non-dairy products, juice beverages, confectionery (gummies, pectin fellies) and processed fruits (jams, baking jams and decorative jams).

While acquisitions in Malaysia were not forthcoming for Cargill, it focused on organic growth. Cargill has allocated an initial investment of RM5 million in a shrimp hatchery in Pekan, Pahang. "This is a first for Cargill to venture into aquaculture. We see niche opportunity in Malaysia while this sector is still at its infancy," he said.

Cargill Feed Sdn Bhd managing director Desmond Tham Yuk Sun, meanwhile, said the company hopes to start selling shrimp fries to farmers by year-end.

Cargill has been investing in Malaysia for 30 years and one of its main exports is palm oil. Conway expects increasing palm oil shipments to the US and Russia in the years ahead.

"The US and Russia are big growth markets because of the small base. We also see more orders from traditional markets like China and India," Conway said.

"Palm oil is playing a role in doing away with trans fats from the American diet. But the challenge (in food formulation) is to get the right balance between saturates and trans fats," he said.

In the nine months ended February 2008, Cargill Inc posted US$2.9 billion (RM9.45 billion) in profits. Headquartered in Minneapolis, the family-owned company employs 158,000 people in 66 countries.

(c) 2008 New Straits Times. Provided by ProQuest Information and Learning. All rights Reserved.