Malaysia - Japan's Itochu buys 25% of Malaysia's Agromate

KUALA LUMPUR: Japan's Itochu Corporation is acquiring a 25% stake in one of Malaysia's major fertiliser manufacturers, Agromate Holdings Sdn Bhd, for an undisclosed sum.

Itochu said on Wednesday the acquisition was to expand its fertiliser business in Asia while Agromate would be able to leverage on Itochu's network to expand its supply source.

According to Itochu's website, Agromate, one of the largest fertiliser distributors in Malaysia, has nine distribution centres and two in Indonesia.

"The company handles 1.3 million tons of fertilisers annually and furthermore, it owns a manufacturing company in the state of Sabah, which has a manufacturing capacity of 200,000 tons of NPK compound fertilisers per year, which is one of the largest in Asia," it said.

Itochu expected an increase in demand for fertilisers, in line with the growing need for food, especially in Asia due to the high economic growth and increasing income level. The move to acquire a stake in Agromate was based on expectations that fertiliser resource would become tight in the medium and long term.

"Itochu is aiming to put its resource to collaborate with Agromate to promote new investment in this fertiliser resource industry to build solid business foundation with its main focus in Asia," it said.

Agromate recorded RM1.7bil in sales in 2011. It markets and supplies fertilisers to plantations, in particular oil palm, rubber and cocoa as well as fruit orchards and vegetable farms in Malaysia and overseas.

Joseph Chin

http://biz.thestar.com.my/

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