The disposal fits in with the Goole-based company's decision to dispose of lower margin businesses following the £410m purchase of Uniqema from ICI in 2006, which was a major step change in the group's development.

Chicago Oleochemicals, a leading North American supplier of fatty acids and glycerine which are used in personal care, household and industrial products, is being sold to H.I.G Capital.

During 2007, the business made an operating profit of £4.6m on turnover of £87.9m and had gross assets of £54.7m.

Going forward the business will function as a standalone operation led by the current local management team.

H.I.G. is a leading private equity investment firm with more than £2bn of equity capital which specialises in providing capital to small and medium-sized companies in buyout transactions.

The transaction is being effected by way of a sale of assets rather than shares with £38.1m payable in cash at completion and the balance as a loan note due in 2014, but repayable earlier in certain circumstances.

Croda will continue to source some products from the business under normal third party commercial terms.

The proceeds will be used to reduce Croda's net debts which stood at £356.8m at the end of March. Following the deal Croda's debts will fall to £319m.

Following the deal Croda will have just a few remaining businesses to dispose of.

In March it sold its 46.5 per cent interest in Baxenden Chemicals to Chemtura Corporation, the majority shareholder in the business, for £13m as part of its drive to focus on its core natural chemicals business.

Croda is enjoying strong global demand for its products as more skincare and cosmetics companies ditch synthetic chemicals in favour of naturally produced ones.

The company, which supplies raw ingredients to most of the big cosmetics manufacturers including L'Oreal, Chanel, Clarins, Estee Lauder and Procter and Gamble, said last week that continuing pre-tax profits rose 85 per cent to £27.9m during the first three months of 2008.

The group said the outlook for 2008 remains favourable and the board is confident of meeting current expectations for the full year.

It said the exceptionally strong trading momentum seen in the second half of 2007 was sustained throughout the first quarter as it continued to experience robust demand for its products around the world.

During the quarter average selling prices increased 16.5 per cent as the group managed to pass on raw material costs to customers.

The integration of Uniqema is on track to deliver synergies of at least £30m a year by the end of 2008. The group is benefiting from the significant increase in glycerine prices, which have more than doubled in a year and contributed an additional £4.5m to profits.

Oleochemicals are based on natural oils and fats, rather than petrochemicals, and are much sought after for their green credentials in areas like personal care, healthcare and homecare.