East Asiatic Company (EAC) Thailand, one of the oldest foreign companies in Thailand with Danish roots, will soon be history as the German company Brenntag Holding has purchased its industrial ingredients business.
”From a historic perspective, I feel saddened that this iconic name that has been intimately associated with Thais from all walks of life during more than 125 years, will soon cease to exist,” said Anders Normann, the outgoing chairman of East Asiatic (Thailand).
”However, from a strictly business perspective, I’m convinced that Brenntag is the right owner and EAC’s former business will continue to prosper.”
The history of EAC dates back to 1884 when the Danish sea captain H.N. Andersen established a trading company in Bangkok on Oriental Avenue. In 1897, he formally set up East Asiatic in Copenhagen. The industrial ingredients business started in Thailand in 1932 and has been headquartered in Bangkok ever since.
EAC Thailand, said Mr Normann, had divested a number of non-core consumer businesses in order to focus on building the industrial business in the region. ”I’m proud that these efforts have been highly successful.
”In consequence, EAC has kept a low profile in the Thai market during the last 15 years as the company’s products are not consumer-oriented, but sold directly to various industries ranging from personal health care to paint and glass manufacturers”.
The official announcement issued last month to the stock exchange in Copenhagen stated that EAC had entered an agreement with Brenntag to divest EAC Industrial Ingredients for a total of 1.2 billion Danish kroner (equivalent to 6.75 billion baht) on a cash and debt-free basis. The transaction does not include EAC’s portfolio investments in three associated companies _ Akzo Nobel Paints (Thailand), Asiatic Acrylics Company Ltd and Thai Poly Acrylics Plc.
The statement said the sale was ”highly satisfactory to the company and its shareholders and the proceeds will pro vide EAC an optimum platform to accelerate growth in its remaining business units”.
EAC has pursued a strategy to focus on high-growth markets for each business through acquisitions. However, in recent years growth through acquisitions in Asia has not reached the desired scale. Following Asia’s recent strong emergence from the recession, a new wave of global consolidation is taking place in most sectors, including industrial ingredients.
”The entry into the Asian markets by global chemical distributors will increase competition for desirable acquisition targets and reduce EAC In dustrial Ingredients’ potential for growth,” said the statement.
Mr Normann said the deal was a win-win for both seller and buyer and he is particularly pleased that all staff will be retained. ”It is business as usual _ just a name change,” he added.
He said the regional industrial ingredients business was growing fast and even during the political unrest sales in Thailand did not suffer. ”I’m confident that Brenntag, being a global market leader in full-line chemicals distribution, will add substantial value to the business for the benefit of all stakeholders _ not just shareholders _ but as importantly staff, customers and partners.”
