Announcement No. 16/2007: Acquisition introduces EAC Industrial Ingredients in Bangladesh

Résumé:

EAC Industrial Ingredients concludes two minor acquisitions: The acquisition of
ACI Trading Ltd. brings the business into Bangladesh, while the acquisition of
Phil-Asiachem Inc. strengthens the activities in the Philippines. The
acquisitions are the most recent steps in the effort to build strong positions
in all significant markets in South and South East Asia, thereby doubling the
business' revenue until 2009. 

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EAC has entered into an agreement to acquire ACI Trading Ltd. in Bangladesh
effective as of 30 September 2007. ACI Trading markets, sells and distributes
specialty chemicals and in-dustrial ingredients. The company with 17 employees
and facilities in Dhaka holds a leading market position as a supplier to the
rapidly growing industrial sector, especially within leather and textiles. 

The acquisition is an important step in EAC Industrial Ingredients' strategy to
establish the same regional position in South Asia as the business already
holds in South East Asia. The industrial development in the South Asian
countries India, Pakistan, Sri Lanka and Bangla-desh proceeds with high growth
rates and international manufacturers of specialty chemicals and industrial
ingredients show increased interest in these new markets. EAC Industrial
In-gredients entered South Asia in December 2005 through the acquisition of an
Indian com-pany, which most recently reported revenue growth of 83% in H1 2007
compared to H1 2006. 

ACI Trading has experienced annual growth rates of 22% (CAGR) since 2003 and
expects to generate revenue of BDT 265m (approx. DKK 22m) this year. Going
forward, EAC expects the company to sustain annual growth rates of approx. 20%
supported by sound, underlying economic growth in Bangladesh with GDP growing
by approx. 6.5-7% p.a. and industrial production growing by approx. 14% - not
least driven by the textile industry. Furthermore, EAC Industrial Ingredients
will introduce this new access to Bangladesh to existing suppliers and provide
ACI Trading with competencies within technical services, formulation and
sup-ply chain management as well as strengthen the company's industrial focus,
thus making ACI Trading an even more attractive partner to international
suppliers. 

ACI Trading is a profitable company and is expected to achieve an operating
margin (EBIT) of approx. 9% in 2008. Furthermore, EAC has also taken into
consideration that ACI Trading initially was part of the ICI Group as has been
the case with some of EAC Industrial Ingredi-ents' activities in other
countries. Business culture and routines are therefore more easily inte-grated. 

ACI Trading's total assets are expected to amount to approx. DKK 12m this year,
primarily consisting of inventories and receivables related to the company's
distribution business. 

In the Philippines, EAC Industrial Ingredients in August acquired the small
company Phil-Asiachem Inc., which primarily distributes ingredients for the
pharmaceutical industry as well as FDA-licensed additives and ingredients for
production of feedstuff and foods. EAC Industrial Ingredients sees a particular
potential within the feedstuff activities, which the busi-ness for some time
has wished to develop into a focus industry - initially in the Philippines and
in the longer term in other markets. EAC Industrial Ingredients expects to
multiply Phil-Asiachem's sales by changing the activities from commission
business to inventory sales, but the growth will be initiated from a modest
base. Phil-Asiachem has been integrated into EAC Industrial Ingredients' local
organisation in Manila, which hereafter counts 50 employees re-ferring to
General Manager Mr. Aldwin A. Mitra. 

The two acquisitions will only have marginal impact on EAC Industrial
Ingredients' 2007 re-sults. In H1 2007, the business' revenue amounted to DKK
577m (+ 17% in DKK) and the operating margin stood at 8.8% (+ 0.7 percentage
points). Full-year revenue growth is still expected to be approx. 20% in local
currencies with an operating margin of approx. 8.5%. From 2008, a more
significant positive effect from the acquisitions is expected. 

Following the acquisitions, the business has 19 offices in nine South and South
East Asian countries - India, Bangladesh, Thailand, Indonesia, Vietnam,
Cambodia, the Philippines, Ma-laysia and Singapore - and represents more than
150 international producers of industrial in-gredients. The strategy is to
become the market leading “one-stop” supplier for selected in-dustries in the
current markets and at the same time enter into new markets. EAC Industrial
Ingredients' financial goal is to double the revenue from around DKK 1bn in
2006 to at least DKK 2bn in 2009 through a combination of organic growth and
acquisitions. In addition to ACI Trading and Phil-Asiachem, EAC Industrial
Ingredients in July this year acquired the somewhat larger Malayan distributor
Akashi and the business is currently exploring the pos-sibilities for
additional acquisitions on present and new markets. 


Yours sincerely,

The East Asiatic Company Ltd. A/S
(A/S Det Østasiatiske Kompagni)





For additional information, please contact:

President & CEO Niels Henrik Jensen, +45 3525 4300,  nhj@eac.dk
Group CFO Michael Østerlund Madsen, +45 3525 4300,  mom@eac.dk
www.eac.dk

This English version is provided for convenience only and in case of
discrepancy the Danish version shall prevail.