Ever wondered what happens to the shiploads of soybeans that China is importing from the US? Wilmar International knows. It is crushing a stack of them.

Some goes into the Arawana edible oils, a household name in China, in which Wilmar is the major shareholder. Some goes into biodiesel. Wilmar has a Chinese subsidiary in that too.

The group has even got a handle on how stuff gets into China through its 95% ownership of Yihai Wharf, a docks management company. Oh, and it owns a majority stake in a company which built a port too.

In short, Wilmar has stepped with a huge footprint into the country widely viewed as the place to be. Indeed, China provides about half group revenues.

But that doesn't necessarily mean it should go the whole hog and get a Chinese listing too.

The good reasons

There are some good reasons for Wilmar to float off its Chinese operations in a separate subsidiary, as it announced on Wednesday.

One is to create value for its investors. Shares listed in Hong Kong command on average a multiple of earnings roughly 30% higher than those in Singapore, where Wilmar stock trades. For Shanghai, where Wilmar boss Kuok Khoon Hong would prefer to turn, multiples are more than double.

That suggests that diverting earnings from Singapore to China could potentially create a windfall for Wilmar investors.

A second is to gain currency for Chinese acquisitions. As a rule, investors reimbursed in stock for acquisitions find payment in domestically-listed shares significantly more attractive than foreign paper.

That's likely to be particularly true in China, which places restrictions on cross-border share ownership.

... and the bad

There is one bad reason, however, for getting a listing. And that is if Wilmar feels its arm has been twisted.

The group's astonishing growth hasn't just drawn investors – Wilmar stock has risen 14-fold over the last four years.

It has attracted attacks from Chinese concerned at the amount of the country's oilseed processing capacity now in foreign hands, of which Wilmar's have grabbed the biggest chunk.

Many critics view foreign ownership as a threat to food security. The Chinese government has taken the issue seriously enough to warn of curbs on new processing facilities – unless domestically owned.

It is a question investors should ask Wilmar – how much pressure has it felt in China for being an offshore enterprise?

It would be a great shame if Mr Kuok felt he needed to dress in Shanghai garb to fulfil his Chinese potential.