EAC Industrial Ingredients acquires Indian business

EAC Industrial Ingredients continues to strengthen its specialty chemical business in India and has today completed the acquisition of the Food and Pharmaceuticals distribution business from S. A. Pharmachem P. Limited (SAP) in Mumbai. The acquired business consists of sale and distribution of a range of specialty ingredients in India, which complements the current activities of EAC Industrial Ingredients in the country. The acquisition will double Industrial Ingredients' business in India, thereby providing better scale and creating a stronger platform for further growth.

India is considered an attractive market with a growing economy, and the acquisition is in line with EAC's strategy to expand in South Asia leveraging on the business' expertise and performance in South East Asia . There is a good strategic fit between EAC's existing business and the acquired business that predominantly sells specialty ingredients to the Food and the Pharmaceutical industries. The business is experiencing positive growth and is generating an attractive operating margin. The two businesses are expected to integrate smoothly, and capture minor operational synergies only.

The transaction will only have limited impact on EAC Industrial Ingredients' results for 2008.

EAC Industrial Ingredients' distribution network covers nine Asian markets - Thailand , India , Bangladesh , Vietnam , Indonesia , the Philippines , Malaysia , Singapore and Cambodia – operating out of 19 offices, and representing more than 150 international manufacturers of industrial ingredients. The business strategy is to become the market-leading solutions provider to selected industries in existing markets, and at the same time expand the regional footprint in South and South East Asia .

Acquisitions are an important tool in this process, and EAC Industrial Ingredients will continue to investigate attractive acquisition opportunities, which complement and add value to the existing business.  

September 2007

EAC Industrial Ingredients has acquired ACI Trading Ltd. on October 1, 2007. ACI Trading is involved in sales, marketing, and distribution of specialty chemicals and industrial ingredients in Bangladesh.

ACI Trading has been a subsidiary of ACI Limited, which is listed on the Dhaka stock exchange. Soon the business will be changing its name to EAC Industrial Ingredients (Bangladesh) Ltd.

The company with 18 employees and facilities in Dhaka and Chittagong holds a leading market position as a distributor to the rapidly growing industrial sector, especially within plastics, leather and textiles.

In 2005 EAC II entered South Asia through the acquisition of the former ICI trading company in India. Bangladesh is an important next step in EAC Industrial Ingredients’ market development strategy in South Asia leveraging on our market leading position in Thailand and South East Asia. South Asia is a high growth region with GDP of 7.5% dominated by India, Pakistan, Sri Lanka and Bangladesh.

EAC Industrial Ingredients will focus on expanding and growing the ACI Trading business in Bangladesh providing existing and new customers with technical support services, formulation and supply chain management as well as strengthening ACI Trading’s industrial focus, thus making the company an even more attractive partner to international suppliers of industrial ingredients.

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August 2007

EAC Industrial Ingredients has acquired Phil-Asiachem Inc. on August 9, 2007. Phil-Asiachem is involved in sales, marketing, and indent distribution of specialty chemicals and industrial ingredients in the Philippines, primarily into the Pharma, Feed, and Food industries.

Phil-Asiachem was founded in 1980 and has been a Joint Venture between an Asset Management company and Asiachem. The company has been located in an office in Makati Manila. Phil-Asiachem is a focused distributor of active pharma ingredients for the pharmaceutical industry, and of additives and ingredients for the feed industry as well as for the food industry. The company’s customers comprise some of the same core industries, which EAC Industrial Ingredients is addressing, in particular manufacturers of feed and food products. The suppliers of Phil-Asiachem and EAC Industrial Ingredients Philippines complement each other without conflicts. The employees of Phil-Asiachem will move into the offices of EAC Industrial Ingredients in the Philippines with immediate effect.

We expect that the combination of the strengths of the existing business and the portfolio and knowledge in the acquired company offers very strong growth opportunities in terms of broadening the product assortment offered to the Food, Feed and Pharma industry in the Philippines, and in South East Asia as a whole.

July 2007

EAC Industrial Ingredients has acquired Akashi Sdn. Bhd. on July 30, 2007. Akashi is involved in formulation, sales, marketing, and distribution of specialty chemicals and industrial ingredients in Malaysia. As a result of the acquisition EAC will also become 50% shareholder of the Malaysian company Amochem Sdn. Bhd.

Akashi was founded in 1991 by a group of Malaysian investors. The company has 57 employees at an integrated facility in Shah Alam in the outskirts of Kuala Lumpur with offices, warehouses, laboratories and production/formulation facilities. Akashi is an exclusive distributor for a number of international manufacturers/producers of among others, polyurethane, ingredients for paint and coatings, adhesives, optical fibres, silicone products, and food ingredients.

As part of the operation, Akashi also formulates certain silicone and polyurethane products. The company’s customers comprise some of the same core industries, which EAC Industrial Ingredients is addressing, including manufacturers of food products, personal care products and industries within rubber and paint. The suppliers of Akashi and EAC Industrial Ingredients Malaysia complement each other without conflicts.

We anticipate that the combination of the existing and acquired company in Malaysia will offer ample opportunities for growth as the strengths of both businesses complement and reinforce each other and offer us a much stronger and broader presence in Malaysia and in South East Asia as a whole.