Brenntag moves from Asian foothold to operational network

By Jess Halliday

- Last updated on GMT

Related tags: Asia pacific, Southeast asia, Asia

Brenntag is to acquire Asian chemicals distributor EAC Industrial Ingredients for €160m cash in a move that will significantly expand its presence in the Asia food, cosmetics and pharmaceutical sectors.

Brenntag already has assets in the Asia Pacific region with 17 sites in 11 countries, but EAC, which it is acquiring from Copenhagen-based The East Asiatic Company, is said to hold “important market share”. It has local presence in Thailand, Vietnam, Indonesia, Philippines, Malaysia, Singapore, Cambodia, India and Bangladesh.

Stephen Clark, Brenntag’s CEO, called the acquisition “a strategic milestone [that] develops our market position from a foothold in Asia to an established operational network, supporting our continued growth path in the region”.

The acquisition is expected to close during the course of this month, and the owner-to-be expects EAC to bring in around €220m in sales in 2010. In 2009, Brenntag saw total sales of €6.4bn.

Growing demand

The ingredients and chemicals distributor has observed considerable opportunity opening up in Asia for ingredients in foods, cosmetics and pharmaceuticals. Economic growth is pushing up incomes, which is stimulating demand for more Western-style products as well as better health care.

However Brenntag acknowledges that there are big regional differences across Asia Pacific, so it is important to have a good level of knowledge in regional markets. It is said that the EAC Industrial Ingredients Brenntag, as the Asia Pacific operation will be known, will be one of the few players operating across the whole geographic area.

Henri Najade, president of Brenntag Asia Pacific, said: “The acquisition will support our ability to better serve local demands in these fast-growing countries. I am convinced we will continue the Brenntag success story in Asia Pacific which is a major growth area for the global economy and consequently for Brenntag, too.”

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