The food giant is tipped to conclude a deal within four weeks, writes DITA DE BONI.
Goodman Fielder may be on the brink of selling its gelatin business.
The Australian Financial Review has tipped a $A300 million ($375 million) sale of Goodman's global gelatin business, and says French food concern Danone, German-based SKW Trostberg or United States-based Hercules are likely bidders.
It said the sale was expected to be complete within four weeks.
Goodman Fielder would not comment on the issue yesterday.
Its global gelatin operation consists of Leiner Davis Gelatin, which manufactures in nine countries and is the world's largest producer of edible gelatin.
In New Zealand, Goodman's ingredient division, which supplies almost all gelatin used commercially in the country, employs 50 staff in Christchurch.
The business could fetch up to $A350 million, based on analysts' estimates.
The potential sale coincides with a company-wide review, which will aim to slash $A50 million in costs from Goodman's operations.
The review is scheduled to be finalised in early March.
Market watchers and shareholders have long urged Goodman to sell its gelatin division, which is heavily reliant on the volatile North American gelatin market.
Goodman's pre-tax earnings from its gelatin business slumped 31.6 per cent in the company's last full year results to $A23.8 million.
That affected total profits and ensured that the first half-year results from the 2000-2001 financial period came in under the previous year's $67.9 million.
Goodman has steadily sold diverse business investments such as poultry and starch over the past two years, and analysts have picked that its gelatin business would be the next likely target.
The company has always denied looking for a buyer for the division.
But chief executive David Hearn has repeatedly vowed that non-performing assets "must go," including those in New Zealand, which returns a disproportionately high amount of the company's wealth for its assets.
The worldwide gelatin industry is valued at around $US1.2 billion, and is growing at 2 to 3 per cent a year.
Gelatin is widely used in all manner of foods, drinks and pharmaceuticals.
It is a supplementary source of protein, a carrier material, a bonding agent, a stabiliser and an emulsifier.
In New Zealand, a common source of gelatin is from hidesplits, connective tissue and the bones of sheep, although globally it is more likely to come from cattle.
For this reason, scientists continue to debate whether European gelatin is safe from the risk of Creutzfeldt-Jacob, or "mad cow," disease.
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