Robert Kuok’s little-known big business: edible oil

March 21, 2019 11:05
Robert Kuok's Wilmar International has over 500 palm oil planting and manufacturing bases across 15 nations. Photo: Bloomberg/HKEJ

Robert Kuok Hock Nien, an ethnic Chinese-Malaysian business magnate, controls nearly 10 listed companies including Kerry Properties (00683.HK), Kerry Logistics Network Ltd (00636.HK) and Shangri-La Asia Ltd (00069.HK).

Lesser known is the fact that the tycoon also owns an edible oil empire. His Wilmar International is one of the top agribusiness groups globally, with sales revenue of US$44.5 billion last year.

Wilmar is in the process of spinning off its Chinese subsidiary to list on Shanghai Stock Exchange.

Kuok built his agribusiness empire by taking advantage of abundant natural resources in Malaysia, Indonesia and other Southeast Asian nations and selling processed agricultural products worldwide.

Wilmar was established in Singapore in 1991 with a focus on palm oil. The company now has over 500 planting and manufacturing bases across 15 nations, with presence even in Uganda, Ivory Coast, Nigeria and Ghana.

Wilmar is ranked 248th by sales on the Fortune 500 list last year. It’s the world’s fourth-largest agribusiness group, after Archer Daniels Midland, Cargill and Louis Dreyfus.

Kuok, 96, has been paving the way for his retirement in recent years, and offloading several subsidiaries for public listing is seen as part of the plan.

Wilmar is now headed by Kuok’s nephew Kuok Khoon Hong, who is working on the initial public offering of a key unit, Jinlongyu.

Owning over 100 edible oil and grain brands, Jinlongyu has snapped up nearly half of China’s market share, even exceeding that of state-owned COFCO International.

Jinlongyu reported sales revenue of US$24.5 billion last year, representing 55 percent of Wilmar’s total revenue.

The IPO is not so much about raising funds, a senior executive at Wilmar International said. Rather, a listed status will turn Jinlongyu into a local company and help get rid of restrictions imposed on a foreign firm.

Jinlongyu is expected to be valued at more than 100 billion yuan (US$14.94 billion), exceeding the market value of Kuok’s flagship Kerry Properties.

Meanwhile, Kerry Logistics Network is also considering a spin-off of its courier service unit in Thailand.

Kook’s business empire spans shipbuilding, shipping, insurance, mining, entertainment, cinema, etc. Many of these businesses are also ripe for separate listings.

Kuok is ranked as the richest man in Malaysia by Forbes this year, with a personal fortune of US$12.8 billion. He is now the 17th richest Chinese in the world.

This article appeared in the Hong Kong Economic Journal on March 20

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist