Australian Salt Producer Bought by Overseas Investor

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Researched by Industrial Info Resources (Perth, Australia)--Cheetham Salt, Australia's largest producer and refiner of solar salt products, has been acquired by CK Life Sciences International (Hong Kong) in a deal worth $157 million (AUD$150 million).

Ridley Corporation (Melbourne, Australia) has been looking to offload Cheetham Salt for some time. John Murray, the chief executive officer of Ridley Corporation, first announced plans to sell Cheetham Salt in April 2012. Murray, a former head of Cheetham Salt, made the call to offload Cheetham to ensure shareholders were getting the best value from their investment.

"I have to say it was a hard decision," Murray said, adding he had mixed feelings about the potential sale. "There's a lot of great people in the business and I'm sure whoever owns that business will end up with a really fine company. We've spent a long time getting that business in very much better shape than it was some years ago. It mightn't yet show it on the bottom line, but certainly the nuts and bolts of the business are more robust. But there comes a time when my role as MD of a publicly listed company is to make sure shareholder value is achieved, and I thought the market was certainly not reflecting that value."

Cheetham, established in 1888, operates 10 solar salt fields and three refineries in Australia. As part of a joint venture with Dominon Salt (Mount Maunganui, New Zealand), it is the largest producer and refiner of salt operating in New Zealand.

With a 2,000-hectare salt field under development in southern Indonesia, Cheetham will be the biggest producer of solar salt in Southeast Asia once the field is producing.

Not all of Cheetham Salt's assets are included in the deal. Ridley Corporation will still hold on to the Dry Creek salt field near Adelaide in South Australia and the non-operational Bowen, Lara and Moolap salt fields. Ridley has not announced its plans for Bowen, Lara and Moolap, but intends to develop the Dry Creek field into a housing development. Ridley management has already begun holding discussions with property developers.

Salt is in big demand in markets such as Hong Kong, mainland China and Japan, as it's used to make soy sauce, a key ingredient in Asian cuisine. With incomes in China rising sharply, that's spurring consumption of soy sauce as the middle classes splash out more on restaurant dining.

CK Life Sciences International is part of the Cheung Kong Group (Hong Kong), which has interests in everything from real estate and property development to telecommunications and energy infrastructure. CK Life Sciences International's activities are focused on the research and development of biotechnology products.

Li Ka-shing is the founder and chairman of Cheung Kong. He is believed to be the richest person of Asian descent and the ninth-richest person in the world, with an estimated wealth of $25.5 billion. Li is also regarded as Asia's most generous philanthropist, having donated more than $1.41 billion to charities and other philanthropic causes.

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