Singapore Petra Foods completes JV agreement with Sime Darby
The move is to strengthen the Group's position in the chocolate confectionery business.
02/03/05 In a drive to strengthen the Group's position in the chocolate confectionery business, and to further strengthen its business in Singapore, Petra Foods Limited has announced that it has successfully completed the joint venture agreement with Malaysia's leading conglomerate, Sime Darby, which was announced in Petra's recent IPO Prospectus.
Jointly set up with Sime Darby Singapore, the JV company, Petra Sime Marketing Pte Ltd ("Petra Sime") will acquire Sime Darby's consumer distribution business, which distributes healthcare products and wine and spirits to retail outlets and other institutions in Singapore.
Under this agreement, Petra Foods will gain access to Sime Darby's established distribution channels and customers in Singapore, to further grow its branded chocolate confectionery business.
Petra Foods will hold a 60% stake in Petra Sime while Sime Darby will own 40%. From a growth perspective, the Group believes that the integration of its branded consumer distribution business and Sime Darby's consumer distribution business will greatly enhance Petra Foods' ability to grow and compete in Singapore's competitive consumer market.
At the same time, the partnership will allow the Group to leverage on the synergies offered by the complementary customer base in achieving distribution and administration cost efficiencies.
Currently, over 90% of sales of Petra Foods Branded Consumer Division come from Indonesia, in which the Group holds a leadership position, with a market share of 57.2%. Less than 10% of its branded consumer revenue comes from other markets including Singapore.
The Group believes that the strategic alliance will enable it to increase its sales in Singapore. Petra Foods had been working on the joint venture with Sime Darby Singapore since July last year, as indicated in its IPO prospectus.
