Wilmar to expand Indian business to half of China's

Wilmar International Ltd., the world's biggest palm-oil trader, aims to expand its India business to about half of China in 10 years as rising incomes lift demand for processed foods in the South Asian nation.

The Singapore-based company plans to expand more rapidly in India after tax breaks and rising incomes helped the country overtake China as the world's largest buyer of palm oil last year, according to chief executive officer Kuok Khoon Hong.

Palm oil futures climbed 37% in the past 12 months in Malaysia as the global economy rebounded from the worst slump since the Great Depression.

Wilmar shares, which more than doubled in the past year, rose 2.6% to SG$6.67 at the close of trading in Singapore, making it today's fourth-best performer on the Straits Times Index.

The company runs five crushing plants in the major oilseed producing areas in India, Kuok said.

Annual profit of the company in 2009 rose 32-fold to US$1.88 billion from US$58 million in 2005 as demand soared for vegetable oil in China, the world's largest consumer. China accounted for more than half of Wilmar's US$16.46 billion revenue in 2007, according to data reports.

Pre-tax profit from its oilseeds and grains business rose to US$145.8 million in the fourth quarter ended December 31, 2009, from a year earlier, even as prices of soy rose 12% in the period, boosting costs for companies in China, the world's biggest soy importer.

Soy futures rose to an average of US$10.05 a bushel on the CBOT in the fourth quarter from US$9 a bushel a year earlier.

Meeanwhile, Wilmar cancelled its plan to list its China unit in Hong Kong after its financial adviser told the company the shares will fetch a lower price-to-earnings ratio than planned, Kuok said.