United International Enterprises Limited (UIE), with a 46 per cent slice of the cocoa replacer company Aarhus, has told the Copenhagen stock exchange that a new partner might better serve Aarhus.
"UIE has resolved to initiate an investigation concerning its interest in Aarhus.
The purpose is to determine whether the long-term investment interests might be better served if UIE's controlling interest in Aarhus United was to be relinquished."
Industry rumours suggest that Swedish fats firm Karlshamns could be interested in picking up the UIE chunk of Aarhus.
It is also possible that US ingredients giants ADM or Cargill - currently driving deeper into the European market - might be interested in buying the shares in Aarhus United, a maker of cocoa butter replacers.
Earlier this year results for the fats and oils firm were hit by a cut in demand from the food industry for bulk oils, declining exchange rates that shaved margins and higher raw material prices.
Aarhus warned investors in March that based on the disappointing results for 2003, an 'efficiency programme' had been built into the firms strategy for 2004-2006 to carve a deeper position in the chocolate market.
"In order to meet the highly intensified competition, the strategy will place increased emphasis on measures to enhance cost efficiency. This will involve both short and long-term cost optimisation, " said the company in a statement, that has since cut 24 jobs.
Aarhus has also seen a disappointing take-up in cocoa butter replacers following the European Union's new chocolate law. The rule sets in stone that up to 5 per cent of the cocoa butter in chocolate may be replaced by vegetable fats and still qualify as chocolate. A move that opened up the market for CBE (Cocoa Butter Equivalents) sold by companies like Aarhus United and Swedish firm Karlshamns.
Vegetable fats are cheaper to use than cocoa butter and manufacturers can slice a considerable sum off production costs when replacing the cocoa butter thereby pitching their prices to the consumer below pure cocoa competitors.
In addition to UIE, a pension fund owns over 10 per cent of Aarhus, and another fund with 5 per cent, while private investors make up the remaining approximate forty per cent.