Penrice Soda Products Pty Limited, in operation for almost 60 years, is the only manufacturer of sodium carbonate and sodium bicarbonate in South East Asia and supplies over 85% of the soda ash and over 90% of the baking soda used by Australian industry. Located in Adelaide, South Australia, Penrice also operates a nearby salt field and a limestone mine in the Barossa Valley, whose products are used as key inputs in the production of soda ash and baking soda. Penrice also generates significant external sales of limestone and salt. Soda Ash is used in a wide variety of glass products, including container glass for jars, wine and soft drink bottles, flat glass for windows and fibreglass for insulation and reinforced plastics.
CHAMP together with management acquired 100% of the company in October 2001. Prior to the acquisition, Penrice was a non-core subsidiary of a U.S. listed entity. Representing less than 3% of this U.S. parent’s business, Penrice’s growth opportunities were not a priority and access to capital was limited. In its 2 1⁄2 year ownership period, CHAMP invested over $25 million into the business in maintenance and growth related capital expenditure, helping to diversify Penrice’s revenue streams and position the company for long term growth. These funds were used to significantly increase salt making capacity, assist Penrice in becoming the world’s largest exporter of sodium bicarbonate into Japan, and allow Penrice to improve its leadership position in the core soda ash market. CHAMP successfully exited its investment in Penrice in a secondary buy-out in May 2004 for A$110M generating an IRR of 50% on funds invested.
