15 Dec Petra selling cocoa division for US$950m

15 Dec Petra selling cocoa division for US$950m
Above photo is Mr John Chuang.

SINGAPORE - Singapore Exchange-listed Petra Foods is selling its cocoa ingredients division to Zurich-based Barry Callebaut for US$950 million to focus on growing its branded consumer division.

Petra shares, in which trading was halted for part of the day yesterday pending the announcement, shot up to a high of $3.40 before closing the day at $3.31, up 56 cents or 20.4 per cent.

Petra's cocoa ingredients division manufactures and sells cocoa ingredients such as cocoa powder, cocoa butter and cocoa liquor under its "Delfi" brand to more than 30 countries, making it Asia's biggest supplier of cocoa products.

The divestment will include its seven factories in Asia, Europe and Latin America as well as sales offices in Singapore, the Netherlands and the US.

Petra chief executive officer John Chuang, who was named Businessman of the Year at the 2012 Singapore Business Awards, said at a press conference yesterday that while informal talks had been ongoing, things started "getting serious" over the last year or so.

Industrial supplier Barry Callebaut sells to businesses across the food industry, from consumer goods manufacturers such as Cadbury and Hershey's to chocolatiers, pastry chefs and bakers.

Aside from becoming the largest cocoa processor in the world, Barry Callebaut will be able to count Asia as a strong cocoa sourcing base in addition to existing operations in West Africa, amid industry-wide concerns of scarcity.

It expects its sales volume in emerging markets such as Asia and Latin America - where demand for chocolate is on the rise - to jump 65 per cent to account for nearly one third of the group's total sales volume.

"At the same time, it allows us to become a leader in cocoa powder," said Juergen Steinemann, CEO of Barry Callebaut, adding that the market for cocoa powder will grow 2-5 per cent on a global basis.

Under a long-term agreement, Barry Callebaut will supply Petra with cocoa products for its branded consumer business, covering 75 per cent of its total needs.

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