MALAYSIAN conglomerate Sime Darby has completed the takeover of New Britain Palm Oil (NBPOL), a move it says will see it produce about 26 per cent of the world’s certified sustainable palm oil output.
The news came as the company announced a 10.6% rise in revenue for the 2014 calendar year to US$617.9 million, due to an increase in total oils shipped as well as higher prices.
This helped take the company’s total comprehensive income for the year to US$43.4 million, well above the loss of US$98.5 million recorded in 2013.
The Sime Darby takeover offer, made in October last year, valued NBPOL at K4.32 billion or at K28.79 per share, and was unanimously recommended by the NBPOL board.
In an announcement, Sime Darby subsidiary Sime Darby Plantation said the acquisition of NBPOL’s 135,000 hectares of palm oil plantations would take its total land bank to almost one million hectares, spread out in five countries.
Sime Darby president Mohd Bakke Salleh said the acquisition was an historic one for the company.
“NBPOL was founded by Harrisons & Crosfield, the company that was part of a merger exercise that created the Sime Darby of today,” he said
“It is a family reunion of sorts.”
Sime Darby said it would focus on integrating the operations of both companies over the next few months, with Sime Darby Plantations managing director Franki Anthony Dass saying he expected NBPOL would make an immediate contribution to the company’s bottom line.
“We have been working on identifying the synergies and our immediate priority will be to unlock value from these synergies,” he said.
Apart from the expansion of its upstream business in Papua New Guinea, NBPOL also gave Sime Darby the opportunity to grow its downstream operations in Europe, the company said.
NBPOL already supplies to more than 110 customers in the United Kingdom and Ireland through its Liverpool palm oil refinery – which delivers food ingredients to European Union customers, and which Sime Darby said would complement its refinery in the Netherlands.
The refinery itself recorded strong earnings growth of 19.1% in the 2014 calendar year, driven by gross margin expansion and increased sales volumes.
NBPOL chief executive Nick Thompson said both companies had a long standing commitment to sustainability.
“This is a union of like-minded organisations and we’re excited to be part of the Sime Darby family,” he said.
Mr Salleh and Mr Dass will join new directors Rashidi Che Omar, Rosely Kusip and Henry Sackville Barlow, who is set to be appointed chairman, on the board of NBPOL.
They will replace outgoing NBPOL chairman Antonio Monteiro de Castro and board members Kamaruzzaman Abu Kassim and Ahamad Mohamad.
Speaking before the deal was finalised, Papua New Guinea Prime Minister Peter O’Neill announced that the government was negotiating the possibility of buying a 30% stake in the company.
“We must secure a partnership arrangement that will be beneficial to our people in the long-term,” he said.
“Just as we have done with our oil and gas assets, our people must also own and have a say in the development of our agriculture sector.”
The company’s expansion plans would create business opportunities for people in Milne Bay, West New Britain, and Morobe, where the NBPOL assets are located, Mr O’Neill said.