July 22, 2008
PTT Chemical and Sime Darby Form Joint Venture to Own and Operate Cognis Oleochemicals
KUALA LUMPUR, Malaysia and BANGKOK, Thailand, July 22 /PRNewswire/ -- PTT Chemical Public Company Limited (PTT Chemical), a leading producer and distributor of chemical products, through its wholly owned subsidiary PTT Chemical International Private Limited (PTT Chemical International), today will sign a joint venture agreement with Sime Darby Plantation Sdn. Bhd. (Sime Darby), the world's largest producer of palm oil, creating a strategic partnership for the joint ownership and control of Cognis Oleochemicals (COM), the world's largest producer of natural-based oleochemical products. Cognis Oleochemicals produces a wide range of oleochemical products derived from natural renewable raw materials such as palm oil, palm kernel oil, other vegetable oils, and tallow that are used in a vast range of applications, including soaps and detergents, cosmetics, pharmaceutical products, textiles, preserving agents, plastic additives, and oilfield drilling chemicals.
Prior to signing the joint venture agreement today, PTT Chemical International also signed a share purchase agreement with Cognis BV, a wholly owned subsidiary of Cognis GmbH, to acquire Cognis BV's 50% stake in Cognis Oleochemicals for the transaction cost of ~euro 104 million in cash. Sime Darby retains its 50% share stake in Cognis Oleochemicals, which will continue to operate under the Cognis Oleochemicals name for an interim period until the new name is established.
The joint venture agreement will take effect upon completion of the share purchase transaction, which is expected to close in late September. The share purchase agreement, which is subject to standard closing conditions, has been approved by PTT Chemical International's Board. Standard Chartered Bank acted as financial advisor to PTT Chemical International for the share purchase.
Under the terms of the joint venture agreement, PTT Chemical and Sime Darby will share control of Cognis Oleochemicals once the joint venture agreement takes effect. Each partner will be represented by an equal number of Directors on Cognis Oleochemicals' Board and the existing Cognis Oleochemicals management team will remain in place.
"PTT Chemical is delighted to join with Sime Darby in a strategic partnership that builds a solid platform and provides unprecedented opportunities for Cognis Oleochemicals' long-term growth and stability," said Mr. Aditheb Bisalbutr, PTT Chemical President and CEO. "We share a vision of Cognis Oleochemicals becoming the global leader in value-added and diversified oleochemicals through a long-term commitment to invest in growth and a renewed focus on customer needs, market driven R&D, and innovation. PTT Chemical's investment in Cognis Oleochemicals represents our strategy to pursue international growth opportunities that leverage our strengths and track record of successful innovation."
"This partnership between Sime Darby and PTT Chemical is unique in the industry in that it combines unmatched expertise and synergy in plantations, oleochemicals, and petrochemicals that will allow Cognis Oleochemicals to leverage opportunities for upstream and downstream integration and provide a comprehensive range of application-driven business solutions for Cognis Oleochemicals' customers", said Mr. Dato' Azhar, Sime Darby Managing Director.
"The backing of strong joint venture partners with solid financial positions will ensure that Cognis Oleochemicals is able to seize market opportunities, ensure long term relationships with its customers, and build on its position as the world's largest and truly global oleochemical company with secure sources of raw materials and a diversified customer base," said Mr. Raymond Yap, Cognis Oleochemical CEO. "Customers of Cognis Oleochemicals will continue to see the same high commitment to customer service and, over time, will benefit from the enhanced product offerings made possible by the upstream and downstream synergies provided by our joint venture shareholders."
About Cognis Oleochemicals
Cognis Oleochemicals is the world's largest producer of natural-based oleochemicals. The company's products, which include fatty acids, fatty alcohols, glycerin, triacetin, ozone acids, plastic additives, and oilfield chemicals used in a broad range of home care, personal care, and industrial applications, are made from natural oils and fats such as palm kernel oil and tallow. Headquartered in Kuala Lumpur, Malaysia, Cognis Oleochemicals has production facilities in Germany, USA, Canada, and Malaysia and sales and service centres in the UK, Brazil, Japan, China and Hong Kong.
About PTT Chemical International Private Limited
PTT Chemical International Private Limited is a wholly owned subsidiary of PTT Chemical Public Company Limited (PTT Chemical). PTT Chemical is a fully integrated producer and distributor of chemical products, is the third largest olefins producer in Asia and the number one chemical producer in Thailand. The company's key businesses include olefins and other base chemicals, polymers, performance products, oleochemicals, and other industrial-related services. PTT Chemical's vision is to be a global leader and innovative chemical company. This transaction represents a strategic step towards achieving its ambition to realize international growth. PTT Chemical is listed on the Stock Exchange of Thailand (SET ticker symbol: PTTCH).
About Sime Darby Plantation Sdn Bhd
Sime Darby Plantation Sdn Bhd, a wholly owned subsidiary of Sime Darby Berhad, is involved in the management of 524,626 hectares of planted oil palm in Malaysia and Indonesia. It is the world's largest listed plantations company and the world's number one palm oil originator, accounting for about six percent of global palm oil production, totaling 2.2 million tonnes of Crude Palm Oil (CPO) a year. The operations involve the management of 208 estates and 65 mills. Sime Darby Plantation is also involved in downstream business activities, including edible oil refining, production of oils and fats products, oleochemicals and biodiesel.
Alongside oil palm, it is also involved in agri-business activities and cultivation of rubber. Backed by Sime Darby Berhad, one of Bursa Malaysia's top 10 companies with business interests spanning across 22 countries worldwide, Sime Darby Plantation Sdn Bhd is well on track to grow a business that is sustainable for generations to come. Other core businesses of the Sime Darby Group include property, industrial, motor, energy and utilities.
Sime Darby is listed on the Kuala Lumpur Stock Exchange (KLSE ticker symbol: SIME).
Cognis is a worldwide supplier of innovative specialty chemicals and nutritional ingredients, with a particular focus on the areas of wellness and sustainability. The company employs about 7,600 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. Another main focus is on
products for a number of other industries, such as coatings and inks, lubricants, as well as agriculture and mining.
Cognis is owned by private equity funds advised by Permira, GS Capital Partners, and SV Life Sciences. In 2007, Cognis recorded sales of about euro 3.52 billion and an Adjusted EBITDA (operating result) of euro 410 million.
CONTACT: Malaysia: Sivaraman Sabapathy, Hill & Knowton (Kuala Lumpur),+603 2026 0899, [email protected], Thailand: OrawanChuenwiratsakul, Hill & Knowlton (Bangkok), +662 627 3501,[email protected], Germany: Beate Reins, Hill & Knowlton(Frankfurt), +49 699 7362 27, [email protected], USA: AnnMangold, Hill & Knowlton (New York), +1-212 885 0518,[email protected]