Salim enters Malaysia

Salim enters Malaysia

KUALA LUMPUR (AFP): Indonesia's largest conglomerate has bought 20 percent of a Malaysian flour-milling company to spearhead its entry into the local market, a newspaper here reported yesterday.

Salim Group, controlled by Indonesian tycoon Liem Sioe Liong, paid 32.5 million ringgit (US$13 million) for a 20 percent stake in Kuantan Flour Mills (KFM), The Star daily quoted industry sources as saying.

The acquisition involved five million shares at 6.50 ringgit each.

Salim will use KFM to make its debut in Malaysia, starting with flour milling and possibly moving on to financial, timber and other resource-based industries, The Star said.

Salim, which is also one of the largest conglomerates in Asia, owns the world's largest flour milling complex located in Jakarta, with a daily milling capacity of 5,600 tons of wheat.

Its other factories in Surabaya and Ujungpandang have a combined daily capacity of 3,500 tons.

KFM, in turn, can process up to 14,000 tons of wheat per month, and also has plans to manufacture pre-mix flour for bakeries.

Salim is expected to double KFM's milling capacity by injecting management expertise and funneling flour into the Indonesian market, which is currently experiencing a shortage.