Mitr Phol Group, the world’s fourth-largest and Asia’s biggest sugar producer, and Olam International, a leading agri-business operating across the value chain in 70 countries, on Tuesday announced a strategic partnership to invest in Olam’s sugar business in Indonesia.
Mitr Phol will acquire a 50-per-cent stake in Singapore-listed Olam’s wholly owned subsidiary Far East Agri, which operates PT Dharmapala Usaha Sukses, a sugar refinery in Cilacap, in central Java.
Krisda Monthienvichienchai, chief executive officer and president of Mitr Phol Group, said: “We are extremely excited to begin our Indonesian journey by partnering with an established Indonesian player like Olam. Indonesia is the biggest sugar importer from Thailand and Australia. Our firm belief in the Indonesian sugar industry’s potential and in creating value will underpin industry growth.
“This will be a key strategy to ensure the strong development of the Indonesian sugar industry in the long term. We look forward to playing a meaningful role in helping Indonesia become self-sufficient in sugar production by working closely with all stakeholders, including farmers and authorities.”
Joe Kenny, managing director and CEO for Sugar & Dairy at Olam International, explained the rationale for the partnership: “Our potential expansion into sugar milling will transform our overall participation in Indonesia’s sugar industry. Mitr Phol is a natural partner given our shared vision, their strong sugar milling expertise and their long experiences in the industry.”
The new sugar-milling plant is expected to be completed and commence operations in 2020.
Upon completion, the facility will source up to 1.2 million tonnes of cane from farmers.