On 14 June, 2016, COFCO Tunhe Co., Ltd. (COFCO Tunhe) announced to acquire 7
subsidiaries of China National Sugar & Alcohol Group Corporation (CNSAGC).
Source: Baidu
Accordingly, the targets include 100% of shares in Guangxi CNSAGC Logistics
Co., Ltd., 100% of shares in Hebei CNSAGC Logistics Co., Ltd., 100% of shares
in Hunan CNSAGC Logistics Co., Ltd., 87.50% of shares in Hebei CNSAGC Huayang
Logistics Co., Ltd., 100% of shares in Liaoning CNSAGC Logistics Co., Ltd.,
97.15% of shares in Zhangzhou CNSAGC Logistics Co., Ltd. (CNSAGC Zhangzhou) and
100% of shares in CNSAGC (Chengdu) Co., Ltd. (CNSAGC Chengdu). When the
acquisition finishes, CNSAGC will only have 2 fully-owned subsidiaries,
Langfang CNSAGC Industry Co., Ltd. and Zhanjiang CNSAGC Trade Co., Ltd.
The estimated net assets of the said 7 companies are the same as the
transaction prices, with no premiums, totalling USD82.56 million (RMB544
million). By 30 June, 2015, only CNSAGC Zhangzhou and CNSAGC Chengdu made
profits (net), at USD21,000 (RMB138,600) and USD716,900 (RMB4.72 million),
whilst the other 5 were at small losses.
CNSAGC is a fully-owned subsidiary of China Huafu Trade & Development Group
Corp., a fully-owned subsidiary China National Cereals, Oils and Foodstuffs
Corporation (COFCO). Early in Aug. 2015, its sugar business was taken over by
COFCO Tunhe. After the acquisition this time, most of CNSAGC’s sugar business
will be transferred to COFCO Tunhe, signalling a start in sugar business
integration.
COFCO and CNSAGC are both subsidiaries of COFCO. The acquisition is expected to
help avoid internal competition, and to make up COFCO Tunhe’s deficiency in
storage capacity, to solidify its position in sugar business.
Earlier COFCO Tunhe was mainly involved in tomato processing, ever as the
largest tomato product producer in the world. In 2013, it began focusing on
sugar business - sales made up 85% of the total that year and nearly 90% in
2015.
COFCO Tunhe is developing sugar business based on Xinjiang Uygur Autonomous
Region (beet sugar) and Guangxi Zhuang Autonomous Region (cane sugar), capacity
given at 400,000 t/a (beet sugar) and 200,000 t/a (cane sugar) respectively. In
addition, it is running a sugar plant in Australia, namely Tully Sugar Ltd.,
capacity given at about 300,000 t/a.
According to its financial reports, its sales fluctuated largely, impacted by
the sugar and tomato business.
-
2013 - USD1.71 billion (RMB11.27 billion),
down by 11.22% YoY
-
2014 - USD1.36 billion (RMB8.94 billion),
down by 20.64% YoY
-
2015 - USD1.78 billion (RMB11.67 billion),
up by 30.52% YoY
In regard to net profit,
-
2013 - +USD12.44 million (RMB80 million),
vs. -USD60.56 million (RMB399 million) in 2012
-
2014 - +USD5.01 million (RMB32 million),
down by 59.73% YoY
-
2015 - +USD11.78 million (RMB76 million),
up by 135.13% YoY
Early in 2015, COFCO Tunhe ever claimed to build up itself into the world’s top
sugar producer, and to become the domestically top 1 sugar producer. Currently,
it is developing well: being financially strong, it is capable of acquiring
sugar plants and purchasing sufficient raw materials, for capacity operation
and output. Notably on 22 June, it won the auction of Chongzuo Yongkai Zuojiang
Sugar Making Co., Ltd.
CCM believes that COFCO Tunhe will achieve large profit growths in sugar
business and will improve its market position, thanks to the strongly
increasing sugar price.
COFCO Tunhe’s financial performance, 2013-2015
Source: COFCO Tunhe Co., Ltd
This article comes from Sweeteners China News 1606, CCM
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Tag: sugar COFCO sweeteners