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.