Cheetham Salt in play
Australia’s largest producer and refiner of value added salt, Ridley Corp’s Cheetham Salt is up for sale, and the share price of the ASX-listed holding company Ridley Corporation Ltd is jumping accordingly.
The salt business is operated within a subsidiary of Ridley Corporation, and the subsidiary has a book value of $240 million. The sale is attracting interest from potential buyers not only because of the sustainable nature of the salt business, but also for the potential following connection of Ridley Agriproducts.
Economists have predicted that if a sale of Ridley Agriproducts were to proceed, it could increase the worth of Cheetham Salt to at least $250 Million.
There is increasing demand for salt in North Eastern Asia, not just because of cooler climates making the evaporative salt process more difficult, but also concerns about possible nuclear contamination of sea water in the region. Currently Japan is the largest importer of land-based salt from Australia, inferring that Cheetham Salt will continue to increase in value.
Cheetham Salt currently operates 8 solar salt fields and five refineries in Australia, generating 1.4 million tones of salt annually.
With rumours of two indicative bidders, Ridley Corporation has said that it will only accept an offer that reflects the fair value of the business.