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Tereos spurs Asian growth with corn starch deal

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France's Tereos group further reduced its reliance on the volatile sugar market, and boosted its exposure to developing markets, by investing in Indonesia's only corn starch producer.

Tereos, the world's fourth-ranked sugar producer, said it had taken an "important step" in its drive to expand in developing markets by buying a 50% stake in Redwood Indonesia, which processes about 330,000 corn a year.

The acquisition, which takes Tereos into partnership with FKS, one of Indonesia's biggest agribusiness groups, will give the co-operative exposure to the largest economy in South East Asia, and the world's fourth most populous country, with a population of nearly 250m.

"It is also Asia's third largest market for sweeteners and one of the world's main importers of corn starch and sugar," Tereos said.

"Considering its demographic growth and its rising middle class, Indonesia has significant potential for development."

Alexis Duval, the Tereos chief executive, said: "This acquisition is an important step in our strategy for development in growing markets."

Developing market expansion

The deal comes only two months after the co-operative received regulatory consent from Beijing to buy-into a corn starch joint venture with Wilmar International in Tieling, northern China with capacity for 700,000 tonnes of grain a year.

This represented a second tie-up with Singapore-based Wilmar - one of Asia's top agricultural trading houses, with Noble Group and Olam International – after the formation of a joint venture to build a wheat starch plant in Guangzhou in south east China, with capacity to process 500,000 tonnes of grain a year.

Also in 2011, Tereos bought a 68% stake in Brazil's Halotek, a maker of cassava starch.

Michelin tie-up

Tereos, which has its roots in France's sugar beet industry, one of Europe's most competitive, has also diversified from sugar by last month creating a joint venture with Michelin to create a rubber based on beet, grain and waste.

The group, whose cane and grains division Tereos Internacional is listed in Sao Paulo, is Europe's biggest ethanol group and second-ranked starch producer.

By Agrimoney.com

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