Business

Published: Monday November 9, 2009 MYT 3:38:00 PM

Pelikan International aims for RM8bil turnover by 2012


KUALA LUMPUR: Pelikan International Corp Bhd, a stationery and writing instrument manufacturer, aims to up its turnover to RM5 billion per annum by 2012, mainly via acquisition of strategic companies.

It announced Monday its proposed acquisition of 66 per cent stake in Herlitz AG and Falkensee Logistics Centre and its related assets for RM227 million (45 million euros), a deal that is expected to be finalised by year-end.

Established in 1904, Herlitz, listed on the Frankfurt Stock Exchange, is a leading manufacturer and distributor of office stationery and paper products in Europe and has entrenched market position in Germany and Eastern Europe including Czech Republic, Poland, Romania and Hungary.

"This acquisition is in line with our group strategy to increase business volume through expansion of new products and distribution channel," Pelikan president and chief executive officer Loo Hooi Keat said Monday.

The group's merged turnover will be close to RM3 billion per annum.

"We want to increase our turnover to one billion euro (RM5.04 billion) over the next 2-3 years. We need that kind of volume," he told a press conference.

He, however, declined to reveal further acquisition plans.

As for the purchase of Herlitz and its assets, he said it will be financed by internationally-generated funds and bank borrowings.

Loo also said Pelikan has made a general offer for the remaining 34 per cent Herlitz shares, which brings the total cost to RM262.08 million.

However, he was not sure if the offer will be taken by shareholders as Herlitz share price has jumped to 3.25 euro from 1.50 euro previously.

"After the announcement was made on Friday, it jumped to 3.25 euro. Our offer price is 1.85 euro per share. When we negotiated the deal, the share price was only at 1.50 euro. So, I wonder if people will take our offer."

Asked if the offer price will go up, he said: "We will stick to 1.85 euro." Elaborating on the benefits of the acquisition, Loo said it will increase products and distribution channels, thus enabling management and staff of both entities to broaden the revenue base through cross-selling opportunities.

"There will be larger potential for more product innovations, global branding and new market penetration," he said.

The acquisition, he said, would also result in cost-saving, amounting to RM100 million next year, from co-branding, marketing and sales position and integration of Pelikan's logistics facilities into Falkensee.

Others are centralisation of raw material, packaging material sourcing and improvement of margins arising from plant restructuring and central sourcing.

"By June 2010, we would have fully closed all our three logistics centres in Pelikan and fully move into Falkensee," he added. - Bernama


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