KUALA LUMPUR: Guan Chong Bhd, the world’s fourth largest cocoa grinder, is buying a European chocolate maker to expand its presence in the continent.
Guan Chong said it had signed a sale and purchase agreement to buy all 25,000 shares in Schokinag Holding BV (SHG) for €29.93 million or about RM137.84 million.
Germany-based SHG manufactures, sells and distributes industrial chocolates, including chocolate couvertures, from liquid to solid, in various sizes, shapes and packaging types, as well as liquid compounds.
It has an annual bean grinding capacity of 7,000 tonnes, to grind cocoa beans into cocoa liquor/cocoa mass, and industrial chocolate manufacturing capacity of 90,000 tonnes per annum.
“The proposed acquisition is part of the group’s global expansion strategy, to expand our presence to Europe and position the group to target new growth opportunities in the world’s largest chocolate consuming market,” Guan Chong said in a Bursa Malaysia filing today.
“Through the proposed acquisition, the company expands its product range into the downstream industrial chocolate B2B (busines-to-business) market,” it added.
Guan Chong had, last month, announced a 38 per cent jump in net profits to RM60.5 million in the third quarter ended September 30 2019 from RM43.9 million, a year ago.
This was due to higher sales volume of cocoa ingredients and enhanced operating efficiency.
In line with larger volume, group revenue rose 24.4 per cent to RM744.6 million from RM598.8 million, previously.
For the nine months, group revenue rose 33.3 per cent to RM2.1 billion from RM1.6 billion previously, on higher sales volume.
Its nine-month net profit rose 38.4 per cent to RM174.7 million from RM126.2 million a year ago.
“At the current rate, we are set for a bumper year with record performance for FY2019,” Brandon Tay Hoe Lian, managing director and chief executive officer of Guan Chong, said in mid-November statement on the results.
“We are targeting significant growth, in the next five years, to strengthen our position as a global cocoa ingredients supplier,” he added.