Bahia-based company produces more than 50,000 tonnes of tissue paper per year
01/12/2023
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OL’s toilet paper mill in Bahia — Foto: Divulgação/OL
The Asian group Royal Golden Eagle (RGE) did not give up after losing the competition for Kimberly-Clark’s assets in Brazil to Suzano. Interested in expanding in the tissue segment in Brazil, it finally found an M&A deal in the country. RGE has just agreed to buy Bahia-based OL Papéis, sources told Valor’s business website Pipeline.
In Brazil, RGE operates through Bracell, one of the world’s largest pulp makers, which has production units in Bahia and São Paulo. The acquisition of OL brings forward by one year the Asian company’s entry into Brazil’s tissue market in relation to the organic investment schedule. The reason is that the company announced last year the construction of a tissue paper mill in Lençóis Paulista, with operations expected to start in the second quarter of 2024.
OL has three factories in Bahia and Pernambuco, which produce 50,000 tonnes of toilet paper per year, under Velud, Familiar and Absoluto brands, in addition to paper towels and tissues, and more than 30 million diapers per month under its own Fofura Baby brand.
The OL operation, based in Feira de Santana, began in 2007 and has expanded its scope in recent years, taking advantage of the demographics in the region and less local competition. The market estimates that the company now holds 20% of the Northeast region’s toilet paper market.
The transaction gave OL an enterprise value (equity and debt) of R$500 million.
Sources close to the companies say that RGE was advised by Bradesco BBI and OL Papéis by Fortezza.
The original story in Portuguese was first published on Valor’s business website Pipeline.
*By Maria Luíza Filgueiras — São Paulo
Source: Valor International