KUALA LUMPUR (Feb 27): SD Guthrie Bhd (KL:SDG) said it is seeking to grow a recent acquisition of a Netherlands-based animal feed and biofuel supplier, as the world's largest palm oil producer pushes further downstream and taps new markets.
The company intends to play an active role in Marvesa Supply Chain Services BV to drive overall growth, particularly through new product development and market expansion, SD Guthrie managing director Datuk Mohamad Helmy Othman Basha said at an earnings briefing on Thursday.
“With a stronger presence in Europe, we see opportunities to actively contribute to this business for the group’s benefit," he said. “We are looking at developing new products and tapping into new markets.”
SD Guthrie, which has been pushing downstream for growth amid limited opportunities for expansion upstream and volatile commodity market, acquired the 48% stake in Marvesa for €54 million (RM250 million).
The downstream segment contributed about 21% of SD Guthrie’s profit before interest and tax in FY2024, while upstream accounted for 79%. The company also has a renewable energy business which is still in its infancy.
For now, SD Guthrie’s share of earnings would be between US$10 million and US$15 million annually, chief financial officer Renaka Ramachandran said at the same briefing.
While the immediate contribution from Marvesa is not significant to SD Guthrie that made RM2.16 billion in 2024, SD Guthrie has an option to acquire full ownership over time, she noted.
The remaining 52% stake in Marvesa is currently owned by BGR Beheer BV controlled by Marvesa’s executive management.
SD Guthrie is also exploring additional business opportunities in Europe and beyond for expansion downstream, Mohamad Helmy added.
The downstream segment produces and markets oils and fats, oleochemicals, palm oil-based biodiesel, nutraceuticals and other palm oil derivatives being sold across 11 countries in Asia, Oceania, Europe, Africa and the US.