10/2/06 Business Times (Malaysia) - Lam Soon Bhd, via its subsidiary Lam Soon Plantations Sdn Bhd, has acquired the remaining 65 per cent stake in its two joint ventures with Dutch multinational Akzo Nobel in Pasir Gudang, Johor, for Euro24 million (RM107 million).

The acquisition makes the two joint-venture companies, Akzo Nobel Oleochemicals Sdn Bhd (ANO) and Akzo Nobel Industries Sdn Bhd (ANI), Lam Soon Plantations' wholly-owned subsidiaries.

Lam Soon Plantations managing director Khoo Heng Suan said the purchase is a strategic fit for the company's core business in palm oil.

"As soon as the transition is completed, we will embark on our plans to expand our operations and upgrade related facilities at the plant.

"The same management team that has successfully run the companies all these years will remain in place," Khoo told Business Times.

Amsterdam-based Akzo Nobel, which has been in partnership with Lam Soon for 20 years, recently decided to divest its oleochemical operations in Malaysia.

Describing the share sale agreement as a deal among friends, Khoo said it was a natural step for Lam Soon to take up the rest of the equity once Akzo Nobel made its decision.

"Akzo Nobel has been an excellent partner in our 20-year joint venture, and we certainly see this close and warm relationship continuing into the future. They are after all still very much involved in related businesses.

"In fact, the speedy manner in which we came to an agreement speaks volumes for our excellent working relationship. For this, we are grateful to the management team at Akzo Nobel," he said.

Pasir Gudang-based ANO and ANI produce palm- and lauric-based fatty acids, glycerine and specialty products for a wide spectrum of industries ranging from food and pharmaceuticals to cosmetics and toiletries, metal and automotive.

Lam Soon began operations in 1958, milling and refining copra. The oil extracted was used to make laundry soap and cooking oil. The earliest branded products then were Axe and Labour.

From this humble beginning, Lam Soon diversified into the manufacture of toilet soap (under the Orchid brand), margerines and shortening using palm oil as raw material.

In 1970, Lam Soon built Malaysia's first oil fractionation plant to produce cooking oil.

Recognising palm oil's potential, the company moved upstream and set up plantations in Peninsular Malaysia and Sabah and Sarawak. By 1985, its oil and soap manufacturing businesses were restructured into the present Lam Soon Bhd to comply with the country's New Economic Policy.

Besides the joint-venture companies in Malaysia, Lam Soon is also said to be interested in acquiring Akzo Nobel's other oleochemical operation in Emmerich, Germany.