Cargills (Ceylon) PLC Acquires Kotmale Holdings

Cargills is of the view that the anticipated double digit economic growth in the medium term and the consequent growth in per capita income and change in lifestyles provide vast opportunities for the FMCG business.

Nov 5 2010 --- Cargills (Ceylon) PLC has acquired Kotmale Holdings PLC as part of its accelerated expansion and diversification drive in the FMCG industry.

The agreement in this regard was sealed yesterday. The acquisition includes 3 production plants under Kotmale Holdings PLC located in Bogahawatta, Kaluthara and Colombo.

Cargills acquired a 73% stake at a maximum price of Rs. 40/- per share and a mandatory offer, as per regulations for the balance shares would follow shortly.

The move consolidates Cargills' interest in the dairy industry enabling the Company to enhance its dairy product range which is currently spearheaded by Cargills Magic, Sri Lanka's No. 1 dairy ice cream. This would also provide Cargills the opportunity to expand its dairy out-grower base from its present network of 5,000 and thereby further empower the local dairy industry. Kotmale at present collects over 12 million litres of fresh milk per annum.

Since its entry into the food manufacturing business over two decades ago, Cargills has enjoyed exceptional levels of growth in its FMCG businesses.

All Cargills manufacturing brands, Cargills Magic, Cargills Finest, Cargills Supremo and Cargills Kist are established market leaders being responsible for driving industry growth through an innovation driven strategy.

Cargills is of the view that the anticipated double digit economic growth in the medium term and the consequent growth in per capita income and change in lifestyles provide vast opportunities for the FMCG business. The Company is therefore looking to further diversify its businesses in line with its core business interests. The acquisition of Kotmale Holdings PLC comes in the wake of these identified opportunities and potential for sustainable long term growth.