Sucrogen to Acquire Proserpine Mill for $115 million

“It will also increase our presence in the Mackay central region, where we already have operations in raw sugar production, sugar refining, ethanol and liquid fertiliser production,” Mr Glasson said.

6/3/2011 --- Wilmar International Limited wishes to announce that its Australian-based sugar subsidiary, Sucrogen, has entered into an agreement with Proserpine Co-operative Sugar Milling Association Limited (PCSMA) to purchase the business assets of PCSMA, on a debt-free and cash-free basis, for A$115 million.

The agreement is subject to the approval of PCSMA members, the Australian Competition and Consumer Commission (ACCC) and the satisfaction of other customary conditions precedent.

Sucrogen currently owns and operates seven sugar mills in North and Central Queensland, producing almost half of Australia’s total raw sugar supply. Sucrogen CEO Ian Glasson said the purchase of PCSMA would increase Sucrogen’s milling capacity by about two million tonnes, to a total of 17 million tonnes, and increase raw sugar production by about 10 per cent, to 2.2 million tonnes.

“It will also increase our presence in the Mackay central region, where we already have operations in raw sugar production, sugar refining, ethanol and liquid fertiliser production,” Mr Glasson said.

“We think Proserpine Mill is a good fit for our business. It’s a strong asset and there is great potential in the region for expansion of the cane-growing area. “We will honour all existing cane supply and community support arrangements and provide continuing employment for staff and employees.” PCSMA is a co-operative sugar mill, wholly owned by 214 sugarcane suppliers. It is Australia’s 5th-largest raw sugar mill, with a crushing capacity of two million tonnes of cane.

“The mill currently crushes about 1.7 million tonnes of cane to produce about 250,000 tonnes of sugar and other by-products, including molasses and electricity,” Mr Glasson said.

“PCSMA has also recently invested in facilities to manufacture and market furfural, which is a globally traded industrial chemical used in solvent extraction, foundry resins and pharmaceuticals.”

PCSMA Chairman Lou Raiteri said Sucrogen’s offer would provide PCSMA members with a cash return for their economic share of the co-operative.

“It also shores up access for the mill to sources of capital and sugar expertise to sustain the future growth and prosperity of the sugar mill,” he said. Mr Glasson said Proserpine members would have several weeks to consider Sucrogen’s offer before it was put to a vote by postal ballot, expected to be held in late July.

“We think our offer represents a fair deal for growers and will provide a secure future for the local sugar industry,” he said.

“Wilmar is keen to work with growers to help expand the industry in the Proserpine area.”

Mr Glasson said Proserpine Sugar Mill employees would have the opportunity to further their professional development as part of Wilmar’s global sugar interests.