Global Sweeteners buys out sorbitol JV partner
has taken a new step towards its aim of becoming a leader in the
Asian and worldwide markets for corn sweeteners by buying out
Mitsui's share of their sorbitol joint venture.
Sorbitol is a sugar alcohol derived from corn starch that is widely used in a range of food products, including confectionery, baked goods, jams and preserves, ice cream and diabetic foods. Crystalline sorbitol powder has a relative sweetness of 60 per cent on sugar. Global Sweeteners formed the joint venture for a sorbitol plant in Changchun, China, with Japan's Mitsui in February 2004. At the outset it owned 51 per cent to Mitsui's 49 of the company, called Global-Nikken (Hong Kong). (Mitsui's share was actually split between three Mitsui companies - Mitsui Tokyo 31 per cent, Mitsui HK 16 per cent, and Nikke, which has a 30 year history of producing sorbitol in Japan, 2 per cent). The new owner of the entire enterprise said the acquisition would help improve efficiency and management flexibility. Mitsui, for its part, did not give any reasons for why it is pulling out of the venture. Global Sweeteners is to pay US$2.5m to become the sole owner of Global-Nikken, which will become an indirect wholly-owned subsidiary. The plant has the capacity to produce some 60,000 tons of sorbitol per year. For the year ended December 31 2007, Global-Nikken reported a net loss of HK$11m - a considerable reduction in the loss reported at the end of 2006. Consolidated net assets were valued at HK$85m at the end of last year. The range of corn-derived sweeteners manufactured and sold by Global Sweeteners is comprised of glucose syrup, maltose syrup, high fructose corn syrup, crystallized glucose and maltodextrin and sorbitol. Its total annual corn sweetener capacity is 960,000 metric tonnes. The Chinese company listed on the Hong Kong Exchange main board in September 2007. For the six months ended June 30 2007 it reported a turnover of HK$728m, up 42 per cent on the prior year period, and net profit of HK$100m (up 36 per cent). Basic earnings per share were 14.2 per cent.