2 Mar 2012

Asian food giants eye up struggling food sector firms

6:56 am on 2 March 2012

Asian food giants are believed to be eyeing companies in the struggling food sector.

Shares in Goodman Fielder shot up sharply earlier this week, after Wilmar International of Singapore took a significant slice in the Australasian food group.

The company is now Goodman's biggest shareholder after paying $A115 million for a 10% stake.

Wilmar says it is still deciding whether to increase its shareholding further, but analysts believe it could be interested in the Integro business, which Goodman says it wants to sell.

Integro includes edible oils manufacturing as well as milling in New Zealand.

Australian Food and Grocery Council chief executive officer Kate Carnell says Goodman Fielder is not the only food business being sized up by Asian companies.

She says the level of pressure on Australian food and grocery manufacturing companies has never been higher.

Ms Carnell says there's been number of significant profit downgrades and a lot of it is due to the downward pressure on margins that Coles and Woolworths have put on the industry due to their price war.

She says there is a number of companies in the Asia that do have money to spend.