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Inchcape unloads timber business

Terence Wilkinson,Deputy City Editor
Friday 26 February 1993 00:02 GMT
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INCHCAPE, the motors, marketing and business services group, is selling its loss-making Far Eastern timber business to local investors for pounds 24m. The deal will net Inchcape a profit of pounds 3.5m.

Inchcape Berhad, a 63 per cent-owned subsidiary of Inchcape, is selling the timber interests for pounds 16m in cash immediately, with the balance payable no later than 24 February 1995.

The sale marks Inchcape's complete withdrawal from commodities and the final shedding of its historical image as an 'overseas trader'. In 1991 it sold its tea interests and has since been concentrating on developing its three core businesses of motor distribution - it has the Toyota franchise in the UK - marketing and business services on a worldwide basis.

Inchcape's timber business has operations in Malaysia, Indonesia, Papua New Guinea, Singapore and Hong Kong. It extracts tropical hardwood and softwood logs and processes and trades timber products.

The operations have struggled in the past three years after its main logging concession expired and because of problems at its new logging concession in Papua New Guinea since 1990 and recession in timber markets.

Inchcape believes profitability is unlikely to return to historical levels. The buyers are companies controlled by Anthony Chen, a Singapore-based businessman.

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