Bourbon dissolves its sugar holdings

French-backed Bourbon Group, the holding company of Sucrerie de Bourbon Tay Ninh Company (SBT) in Tay Ninh province, last week finished offloading its 97 million shares (68.41 per cent stake). Transactions were conducted via agreements.

On November 18, 2010, the Paris-based group officially trumpeted on its website the disposal of its stake in SBT to a group of Vietnamese investors for €34 million ($46.5 million).

“With this disposal, Bourbon will be fully divested from the sugar company located in Vietnam,” said a Bourbon release.

“Bourbon thus affirms its position as a “pure player” in offshore oil and gas marine services,” the release said.

Bourbon began its Vietnam operations in 1995 with the establishment of SBT. Its Gia Lai Bourbon sugar mill was established in 1997, but the French group pulled out of the venture in 2007 when this limited liability company was turned into a shareholding firm.

Bourbon also used to manage a system of supermarkets named Cora in Vietnam. However, in 2003 Cora was merged with BigC without any announcement on the value of the transfer.

For SBT, local sugar maker Thanh Thanh Cong Joint Stock Company bought 35.2 million out of the 97 million shares on offer.

SBT’s spokeswoman Nguyen Thi Thuy Tien declined to name the rest buyers.

Tien told VIR there was nothing sinister behind Bourbon’s latest move. She said Bourbon had wanted to stop its sugar business in Vietnam since 2007, when Bourbon Gia Lai became a joint stock company. During 1995-2005, the group faced many difficulties related to low sugar prices and sugar cane material shortages. Since 2005, Bourbon had been gaining profits in Vietnam, though SBT’s $52.6 million sugar mill often processed just 8,000 tonnes of sugar cane per day, or half of its design capacity due to sugarcane material shortages.

“However, the group’s leaders just want to focus on its strong points namely shipping-related sectors as a long-term effective strategy,” Tien said.

Tien added that Bourbon’s ended sugar business in Vietnam could “kill two birds with one stone” because this would help Bourbon focus its capital into its core production industries, while Thanh Thanh Cong could multiply its strength. The deal between Thanh Thanh Cong and Bourbon had been negotiated for long time.

In August this year, the world’s leading agri-processor Tate & Lyle LLC announced that the UK-based company would sell its entire stake at Nghe An Tate & Lyle Sugar Company as part of its global business restructuring. The sale would end the 14-year presence of Tate & Lyle in Vietnam and an end to the group’s sugar refining business globally.

Tate & Lyle’s factory in central Nghe An province is the largest sugar refining factory in Vietnam.