22/4/06 (Business Times)  -  PAN Century Edible Oils Sdn Bhd, one of Malaysia's largest and oldest edible oils refiner, may be up for sale at between US$90 million and US$120 million (RM329 million and RM439 million).

Industry sources said owners of the Pasir Gudang-based company are mulling whether to sell the entire business or seek joint-venture partners, especially plantation companies.

"This is a preparatory measure to lock in steady crude palm oil (CPO) supplies as it competes for the raw material with overseas markets such as China and India.

"It also has to grapple with some 30 local biodiesel plants which are expected to come on stream in the next three years as well as shrinking profit margins," a source told Business Times.

The source said that either the Federal Land Development Authority (Felda) or plantation companies under Permodalan Nasional Bhd and Kulim (Malaysia) Bhd, would want a stake in Pan Century due to strategic and marketing reasons.

Pan Century president and chief executive officer Dilip Gaur was overseas and could not be reached for comment.

Pan Century is owned by India's Aditya Birla Group, which is listed on the Delhi Stock Exchange. It specialises in oil refinery, edible oils, and also makes rubber products.

It first set up operations in Malaysia in 1978 and commanded a quarter of the country's market share in the 1990s, competing with other refiners owned by Kulim, IOI Corp Bhd and the Kuok Group's Pasir Gudang Edible Oils Sdn Bhd.

It is one of the largest palm oil manufacturing complexes in the country, with an annual capacity of one milion tonnes of refined palm oil and palm oil products.

The company also churns out 120,000 tonnes of speciality products, including soap noodles, glycerine, fatty acids, shortening and margarine, and makes latex examination gloves.

In November last year, Japan's Nisshin Oillio Group Ltd made a bid to buy the rest of the shares it did not own in a Singapore-owned refiner, Intercontinental Specialty Fats Sdn Bhd, for RM81 million. This indicates that the industry is consolidating, industry executives said.

Aditya Birla has been among India's largest companies for over five decades, and globally for nearly 30 years, chalking revenues of over US$5.6 billion (RM20 billion).

The group has businesses in aluminium, viscose staple fibre, copper, cement, viscose filament yarn, branded apparel, chemicals, carbon black, fertilisers, sponge iron, insulators, power, telecommunications, financial services and insurance.

Aditya Birla, whic has been operating in India since 1947, is India's second largest company with 60 manufacturing units. It has overseas and international trading operations spanning Singapore, Dubai, the UK, the US, South Africa, Tanzania, Myanmar and Russia.