Cognis is selling its 50 percent stake in the Cognis Oleochemicals joint venture to PTT Chemical International Private Ltd. for 104 million (U.S. $162 million) in cash. The transaction is expected to be completed by the end of September, pending closing conditions and regulatory approvals.
PTT is a Singapore-based subsidiary of PTT Chemical Public Co. Ltd., a Bangkok, Thailand-based company that produces olefins and associated products. Cognis Oleochemicals will continue to operate under its current name for an interim period until a new name is established. Its products include fatty acids, fatty alcohols, glyercin, triacetin, ozone acids, plastic additives and oil field chemicals used in industrial applications, home care and personal care.
According to PTTs July 23 notification letter to the stock exchange of Thailand, it expects the Cognis Oleochemicals transaction to help the company to expand, grow and create more value added in oleochemicals and their derivatives, which are natural-based products with stable demand growth. PTT said it will be able to develop its international market presence through Cognis Oleochemicals global marketing channel. Moreover, the partnership with Sime Darby, which is the worlds largest palm oil producer, will help strengthen the companys oleochemical feedstock position, PTT added.
Headquartered in Kuala Lumpur, Malaysia, Cognis Oleochemicals was a fifty-fifty joint venture between Sime Darby Plantation Sdn Bhd. and Cognis. It operates production sites in Europe, North America and Asia. Cognis and Sime Darby collaborated on the production, marketing and distribution of fatty acids, glycerin and associated products for almost 30 years. In 2006, both companies expanded the scope of the joint venture by transferring Cognis global oleochemicals and plastics technology businesses into an operating company.
On the basis of our excellent experiences with Sime Darby and PTT Chemical over many years, we are convinced that the new joint venture offers synergies that will help Oleochemicals to further develop its businesses, said Cognis CEO Antonio Trius. By selling our stake to well known partners, we ensure a stable supply of our oleochemical basestocks is secured, as we are intending to continue sourcing products from the business under normal third party commercial terms.
In 2005, Cognis and PTT Chemical founded Thai Ethoxylate Ltd., a fifty-fifty joint venture and Thailands first producer of fatty alcohol ethoxylate. In 2006, Cognis and PTT Chemical subsidiary Thai Oleochemicals founded Thai Fatty Alcohols Co. Ltd., for the production and marketing of fatty alcohols.