As panic buying of toilet paper continues, the owner of the Quilton and Cotton Soft brands, ABC Tissue, continues to persevere with its sale process.
It is understood that there are three or four parties looking at the business, including its supplier, China’s Hengan International and Japan’s Marubeni.
The other two possible bidders are offshore strategic groups.
Chile’s CMPC was thought to be one of them, but after buying SEPAC in Brazil, a deal might be off the agenda.
The second stage of the competition is due shortly.
ABC Tissue is owned by the family of the late Henry Ngai and the business is up for sale through Morgan Stanley.
The company has made strides in recent months of growing its market share to what is now about 50 per cent of the overall Australian tissue market.
It sources product from both Hengan, the largest producer of sanitary napkins and nappies in China, and CMPC, which provides its pulp.
Sources close to the company say that the latest panic buying will have little effect on the overall business, with a few slower months as people de-stock.
Apparently, the company has currently ramped up Australian production to accommodate the additional demand and is not solely dependent on its product from China, from where Hengan provides its jumbo roll.
While some of the product is made from the jumbo roll, cut down and processed into toilet paper, ABC can make jumbo roll locally from the pulp it imports from Chile, which produces better quality pulp than in Australia.
ABC Tissue generated $37.3m in profit last year and is considered highly cashflow-generative, paying out dividends of $44.2m.
Annual revenue was $427.6m, up from $415m.
On Wednesday, The Australian reported panic buying of toilet paper linked to fears about the spread of coronavirus.
Solaris Paper, the company that owns the Sorbent brand, had warned that panic buying threatened the nation’s supplies of toilet paper and its ability to replenish the supermarket chains.
Woolworths confirmed it had initiated customer limits for certain grocery items.
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