MALAYSIAN CO. BUYS KTV OIL MILLS

BILLIONAIRE Robert Kuok gas acquired KTV Oil Mills, a large cooking oil company in South India, to introduce imported oil under its own internatonal brand names. The deal, worth around Rs 80- crore, is the second largest in the sector after Bunge took over HLL's Dalda. But don't think of the buyers as barbarians at the gate. Foreign capital is bringing with it the much needed muscle and deep pockets that are cital for staying power in a fickle buisness like food. Asian tycoons are making strategic investments in India's food industry as they know it is the sure-fire money-spinner of the future.

Billionaire Robert Kuok has acquired KTV Oil Mills, a large cooking oil company in south India, to introduce imported oil in its own brands. The deal, worth around Rs 80-crore, is the second largest in the sector after Bunge took over HLL's Dalda.

Ranked 94th on the 2005 Forbes list, the Malaysian industrialist runs a diversified conglomerate whose business interests include trading, finance, property, media like the South China Morning Post newspaper, hotels like the Shangri-La chain, shipping, manufacturing, and retail.

The group's businesses span Asia, Western Pacific Rim and Canada. It also a Coca-Cola bottling franchise in mainland China, and a cigar company in the Philippines.

Rising incomes have pushed India into depending heavily on imported cooking oil. And the Kuok group comes well-prepared. It has already registered a slew of brands as trademarks in India for foods ranging from edible oils and milk products, to biscuits, flour, packaged water, sugar, beverages, and vanaspati.

The Singapore-based group has already registered three brands - Simply K, and Blue Team - in India, through its subsidiary Kuok Oils and Grains Pte Ltd.

Kuok Oils has now formed a new company in India - KOG KTV Food Products India Pvt Ltd, which has taken over the assets of KTV Oil Mills.

For KTV Oil the deal brings not just cash, but the significant muscle and money of the Kuok group that would be enough to beat most local competition.

As KTV has been importing crude oil from Kuok Foods for the last eight years, which has added to the "comfort-factor" in the relationship.

For Kuok, the attraction lies in acquiring two refineries based in Chennai and Tuticorin, a vanaspati plant and an oilseed crushing plant, that would give the company immediate access to the Indian retail market. KTV also has two local refined oil brands - Rubini and Sunland - which would continue to be used by the new company.

That should change the market dynamics for other new MNC players like Cargill, Bunge, and Archer Daniel Midlands, who are struggling to gain a toe-hold in the Indian packaged foods market.

And the fight could well be to the finish as Kuok has deep pockets, wide experience, and just emerged as the top retailer of branded cooking oil in China.