Wilmar restructures China operations, mulls separate listing
Singaporean agribusiness company's Q1 profit grew 51%
JUSTINA LEE, Nikkei staff writer
SINGAPORE -- Singapore's Wilmar International, the world's largest palm oil company, said Thursday that it is restructuring its operations in China, and is considering a separate listing, as it continues to expand in the country.
The company said in a press release that the proposed listing "is still at evaluation stage." It added that there is "no certainty or assurance as at the date of this announcement that the listing proposal will be carried out."
A Wilmar spokesperson said the company first considered a separate listing of its China business back in 2009. She added that since then, Wilmar has not ruled out this possibility and that it will depend on timing and valuations.
China is the largest market for Wilmar, and the company has a substantial footprint in the country. Wilmar has around 45% of the market share for edible oils in China, and is also one of the largest wheat and rice millers in the country. Its China revenue stood at almost $20 billion and made up close to half of Wilmar's revenue for its financial year in 2016.
The latest announcement indicates that Wilmar is continuing its growth expansion in China. In its 2016 annual report, the company noted that the Chinese government had recently lifted restrictions on oilseed and grain processing capacities owned by foreign companies. "This will benefit our operations in China as it provides flexibility to expand if needed," it said.
The group also announced its net profit ended March, which grew by 51% to $361.5 million, mainly due to gains from its investment securities and strong performance by its oilseeds, grains and tropical oils segments. Its revenue also enjoyed 17.4% growth to $10.5 billion on the back of higher commodity prices and larger sales volume by its tropical oils and sugar businesses.
Kuok Khoon Hong, chairman and CEO of Wilmar, said that the company expects its flour business to continue its growth, while volume for consumer products is expected to recover from the seasonal reduction in the first quarter. He added that recent volatility in sugar prices is expected to impact its sugar operations.