Australia’s CSR has sold Sucrogen to Singapore’s Wilmar International Limited for AUD 1.75 billion (USD 1.5 billion), after rejecting offers by Shanghai’s Bright Food Group. CSR is the world’s second-largest exporter of raw sugar; it accounts for 40 percent of Australia’s raw sugar production, and is Australia’s largest producer of sugar-based ethanol and renewable energy from biomass. The deal was announced on 5 July and includes AUD 403 million in assumed debts.
CSR had its sugar business under Sucrogen, with seven factories in Queensland that have a combined annual capacity of 2.1 million tonnes of raw sugar. It also has a 75 percent interest in the two refining companies, Sugar Australia and New Zealand Sugar Company, which makes it the largest refiner in the two countries. The sale to Wilmar also includes three mineral wool factories in China, Malaysia and Thailand; a panel plant in China.
According to a CSR Ltd spokesperson the company will use the proceedings to address its asbestos liabilities, to restore capital to shareholders, and help focusing the company on the construction sector, supplying aluminum and building materials to the Australia and New Zealand markets.
Earlier attempts to demerge CSR sugar and the building materials businesses were blocked by the Federal Court because the “new” CSR might not be able to deal with the potential liabilities of the asbestos cases. The cases arose from exposure of workers to blue asbestos, which is reckoned as the most toxic form of asbestos, while employed in the mines at Wittenoom, Western Australia in the 1948-1966 period. Family members and community residents were also exposed, and cases of asbestosis, mesothelioma or lung cancer, continue to grow according to press reports.
On 10 July, Internet news reported that Wilmar International was talking to three Singaporean banks seeking to borrow over USD1 billion to finance the purchase of CSR’s sugar business. Wilmar is a major player in the edible oils market, has interests in oil palm cultivation, oilseed crushing, specialty fats, oleochemicals and biodiesel manufacturing. It operates in 20 countries, with focus on Indonesia, Malaysia, China, India and Europe.