Singapore-based Wilmar International, one of Asia’s leading agribusiness groups and the world’s largest palm oil trader, is a “good strategic partner” to support the growth of its agri-food business in India. I’m looking for. The old relationship with Adani Group is scheduled to end in 2025.
In an exclusive interview with Fortune India, Wilmar International Chairman and CEO Kuok Koon Hong, 75, confirmed the group’s plans. “We believe that India will become a very large and important player in the global agricultural and food business, and that its influence will extend not just to India, but to the entire Indian subcontinent,” he said, co-founding Wilmar in 1991. Kuok, who can be counted, says. He is one of the top 15 billionaires in Singapore, with a net worth of nearly $4 billion.
Adani Wilmar (AWL), known for its Fortune edible oil brand, was initially engaged in edible oil business, but later expanded into other businesses such as rice, flour and oilseed milling, oleochemicals, specialty oils and home care. diversified into agriculture and food-related businesses. products, pulses, besan, soybean value added products. The company posted consolidated sales of 51,262 million rupees and profit of 148 million rupees in FY24.
Given that India is the largest importer of edible oils and the largest exporter of rice, India is extremely important as a source of demand, export and market information for many of the products that Wilmar is involved with. . “The Indian market is very important for many products, especially some of Wilmar’s core businesses such as edible oils, grinding, oleochemicals, rice, flour and specialty oils and fats,” said Kwok.
Regarding Wilmar’s relationship with Adani, Kuok was full of praise. “Succeeding in new markets, especially large and complex markets like India, requires technical expertise, local market knowledge and the ability to build strong local teams. They were invaluable in finding local talent for the project and advising on local strategy and government relations,” says Kuok.
In fact, AWL is the only joint venture run entirely by locals, and Wilmar has never had a full-time expatriate there since the joint venture’s inception 25 years ago. For many years, AWL operated independently with little direct control from either partner. “We can do that because we have a great management team,” Hong said.
While AWL is a leading player in the edible oils, oleochemicals, castor oil, flour and rice businesses, Wilmar plans to strengthen its market position in all agricultural and related food businesses, also through M&A. Especially in edible oils, regional brands have a 50% share, which is not surprising given their potential to strengthen their market share.
In fact, last year, AWL increased its presence in the staples (oleochemicals) sector of the FMCG industry by acquiring a 67% stake in specialty chemicals company Omkar Chemicals. This acquisition is a strategic step for Adani Wilmar to establish a strong production footprint in the specialty chemicals market, including home and personal care products, food additives, plastics and polymers, agrochemicals, lubricants, and petrochemicals. It was.
Prior to the Omkar deal, AWL had acquired several brands, including the famous Kohinoor brand, from McCormick Switzerland GMBH in 2022 to strengthen its leadership in the food business. With this acquisition, AWL has exclusive rights to the Kohinoor branded basmati rice, Ready to Cook and Ready to Eat curry and meal portfolios in India under the Kohinoor brand.
The company’s edible oil business recorded a profit of Rs 1,146 crore in FY24, with a decline of Rs 172 crore in food and FMCG.
Excluding acquisition costs, Wilmar’s investment in AWL, currently valued at over Rs 42,000 crore, cost about $94 million, according to Wilmar, which is currently valued at about $2 billion. According to the agreement announced a few days ago, Wilmar will acquire a 31.06% stake in the Adani Enterprises (AEL) joint venture by March 2025, and AEL will sell the remaining 13% stake through an offering. Adani plans to use the $2 billion he received from the exit to support the group’s core businesses, including energy, utilities, transportation, logistics and other industrial sectors.
On the other hand, JP Morgan has repeatedly given Adani Wilmar shares an underweight rating with a target price of 320 ₹20, while domestic research and brokerage firm Investec has given it a hold rating with a target price of 397 ₹97. One emphasizes promoter ownership. as a favorable factor. The stock is currently trading at ₹327 levels and has fallen over 10% in the past year.
