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NATURAL rubber supplier Halcyon Agri Corporation is buying four Indonesian crumb rubber factories for S$105.3 million in cash.
The group said on Thursday that a memorandum of agreement it entered into on Dec 5 with the vendors - Liauw Chiang Sioe and Sjahrir Iskandar - to buy the entire stake in PT Sumber Djantin (PTSD) and PT Sumber Alam (PTSA) has become legally binding.
The four factories that these companies own in West Kalimantan can produce numerous grades of Standard Indonesian Rubber, with a total annual licenced export capacity of 132,000 tonnes.
The purchase consideration is subject to due diligence findings, said Halcyon. It will be satisfied by cash, and fully funded through existing internal resources.
The acquisition will increase the scale and scope of Halcyon Agri's natural rubber processing segment, and propel it to be the largest crumb rubber producer and exporter in Indonesia, with a total processing capacity of 1.55 million tonnes per year.
"The targets are strategically located in close proximity and are complementary to the Halcyon Agri group's existing operations in Pontianak, Indonesia," said the firm. "These are expected to derive synergic benefits through common corporate infrastructure, supplier consolidation and sharing best practices and economies of scale."