News Release

2017.2.27Termination of business and capital alliance with Cheng I Investments Holding Ltd.

In February 2017, Fuji Oil Holdings Inc. (hereafter Fuji Oil Holdings) terminated its business and capital alliance in the Chinese and Taiwanese markets with Cheng I Investments Holding Ltd. (hereafter Cheng I Investments Holdings) which had been in place since September 2007.

Description


1. Background to business and capital alliance, and reason for termination

・Background to business and capital alliance
Market growth resulting from strong economic growth and changes in food cultures in China and Taiwan was anticipated, so by combining the strengths and expertise in sales, technology and logistics of both groups and leveraging them in Fuji Oil (Zhang Jia Gang) Co., Ltd.(hereafter Fuji Oil (Zhang Jia Gang)) ’s oils & fats, and processed foods business in the Chinese market and Cheng I Food Co., Ltd.(hereafter Cheng I Food)’s oils & fats business in the Taiwanese market, the Fuji Oil Holdings determined that it was possible to increase its corporate value and thus entered into a business and capital alliance with Cheng I Investments Holding in China and Taiwan, and increased its share in these markets.

・Reason for termination
Different intentions regarding business strategy and operational policy henceforth led to amicable discussions which resulted in the Fuji Oil Holdings deciding to terminate its business and capital alliance with Cheng I Investments Holding.



2. Details of the capital alliance to be terminated

Fuji Oil Holdings has purchased the 40% of Fuji Oil (Zhang Jia Gang)’s equity owned by Cheng I Investments Holding. By doing so, Fuji Oil Holdings’ ownership ratio has reached 98.06%. Further growth in the industrial use oils & fats, and processed foods business in China is currently expected, and it is an important market for the Fuji Oil group’s growth strategy so the Fuji Oil Holdings shall continue to develop its business and increase its market share.
Fuji Oil Holdings has also sold the 40% of shares it held in Cheng I Food to Cheng I Investments Holding.



3. Overview of companies

(1) Fuji Oil (Zhang Jia Gang) Co., Ltd.
1. Location YangShe Town Economics Development Zone, North Side of Zhangyang Highway, Zhang Jia Gang City, Jiangsu Province 215600, P.R. China
2. Established December 2, 1995
3. Capital US$ 33,000,000
4. Representative Chairman Masataka Minemura
5. Equity relation 98.06% of the equity is held by Fuji Oil Holdings, and the company is a consolidated subsidiary.


(2) Cheng I Food Co., Ltd.
1. Location No 148 Renlin Road, Wulin Tsun Renwu Hsiang, Kaohsiung, Taiwan
2. Established January 22,1976
3. Capital 240,000,000 NTD (¥840,000,000 approx.)
4. Representative Chairman Jonathan Ho
5. Equity relation This was a Fuji Oil equity method company, but with this sale of the equity it will become a consolidation exempt company.


(3) Cheng I Investments Holding Ltd.
1. Location P.O. Box 957, Offshore Incorporations Centre, Road Town,
Tortola, British Virgin Islands
2. Established October 4, 2006
3. Capital US$ 50,000
4. Representative Chairman Ing-Chou Wei
5. Equity relation There is no equity relation with Fuji Oil.




4. Schedule

(1) Acquisition of Fuji Oil (Zhang Jia Gang) Co., Ltd. equity
(1) Conclusion of equity transfer agreement  :July 8, 2016
(2) Equity acquisition :September 14, 2016


(2) Sale of Cheng I Food Co., Ltd. equity
(1) Conclusion of share transfer agreement  :July 8, 2016
(2) Sale of shares :February 17, 2017




5. Forecast

The impact on Fuji Oil Holdings’ consolidated financial results for the financial year ending March 31, 2017 is expected to be minimal.



End of report

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