Cognis and Golden Hope agree to expand oleochemicals joint venture
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Cognis Deutschland GmbH & Co. KG ("Cognis") and Golden Hope Plantations Berhad ("Golden Hope") have formally agreed to expand the scope of their existing joint venture with the transfer of Cognis' global oleochemicals and plastics technology businesses. Following the signing of a memorandum of understanding earlier this year (July 13), and the successful conclusion of the subsequent contract negotiations, agreements respecting the transfer of the businesses to the joint venture and related aspects of the transaction were now signed.
With effect from January 1, 2006, Cognis' global oleochemicals business, comprising fatty acids, glycerin, oilfield chemicals, azelaic acid and pelargonic acid, and plastics technology will be transferred to Cognis Oleochemicals (M) Sdn. Bhd., the existing 50:50 Malaysian joint venture between Cognis and Golden Hope. The implementation is subject to the approval of the relevant authorities and Malaysian Bank Negara and MITI (Malaysian Ministry of International Trade and Industry). The transaction is expected to be formally completed with closing by the end of January 2006.
The businesses being added to the joint venture employ around 750 people, mostly in Germany, the USA and Canada, and generate revenues of around EUR 570 ($700) million (including sales to Cognis). Cognis and Golden Hope will continue to be equal shareholders in the company which is expected to remain consolidated in Cognis' financial accounts.
After this expansion, Cognis Oleochemicals (M) Sdn. Bhd. will rank as one of the leading global oleochemical companies, having total revenues of around EUR 690 ($850) million (including sales to Cognis) and around 1,100 employees.
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