JAKARTA, Indonesia, Dec. 18, 2017 /PRNewswire/ —
- World’s fourth largest and Asia’s largest sugar producer Mitr Phol enters strategic partnership to boost Indonesia sugar production
- Mitr Phol to acquire 50% stake of Olam’s sugar refinery in Indonesia
- JV will then jointly explore developing new sugar mill that would source 1.2 million metric tonnes annually
- Potential new mill will help Indonesia reduce imports of raw sugar, boost livelihoods for farmers and generate wider economic benefits
Olam International Limited ("Olam"), a leading agri-business operating across the value chain in 70 countries, and Mitr Phol Sugar Corporation ("Mitr Phol"), the world’s fourth largest and Asia’s largest sugar producer, have announced that they will jointly explore the development of a new greenfield sugarcane milling facility in Indonesia.
If plans for the greenfield sugar milling facility proceed, it could source up to 1.2 million metric tonnes of cane from local farmers upon its completion in 2020.
This exploration of a new sugar mill forms part of a broader strategic partnership between Mitr Phol and Olam announced today to boost sugar production in Indonesia. The tie-up sees Mitr Phol investing in a 50.0% stake in Olam’s wholly-owned subsidiary Far East Agri, which operates PT Dharmapala Usaha Sukses — a sugar refinery in Cilacap, Central Java.
The new mill, if plans proceed, will leverage on the joint strengths of Mitr Phol and Olam to simultaneously improve operating efficiencies while enhancing livelihoods by ensuring farmers have sustainable incomes. Sourcing activities will be matched with initiatives to help growers improve yields via upskilling support and the introduction of cutting-edge initiatives such as ModernFarm and DTF Cocoa. In addition to the joint venture, Mitr Phol will join Olam’s programme of extending Good Agricultural Practices to farmers across Indonesia, which has been in place since Olam entered the country in 1996.
Joe Kenny, Managing Director and CEO for Sugar & Dairy, Olam International, explained the rationale for the partnership: "This partnership brings together two responsible, leading sugar players with long-term ties in Indonesia. We are fully committed to support the government’s goal for self-reliance in sugar production and will deliver quality, safe products to customers and create value for all stakeholders; in particular, we would focus on continuing to improve the livelihood of farmers we source from by introducing cutting-edge technology, and working with them to improve yields and practices to ensure they generate sustainable incomes."
Krisda Monthienvichienchai, CEO of Mitr Phol Sugar Corporation, also highlighted Mitr Phol’s commitment to Indonesia: "We are excited to begin our journey in the country by partnering with an established player in Olam. Our shared belief in Indonesia’s potential and in creating long-term value will underpin our growth strategy here. We look forward to playing a meaningful role in helping Indonesia become self-sufficient in sugar production by working closely with Olam, the authorities, farmers and all stakeholders."
About Olam International Limited
Olam International is a leading agri-business operating across the value chain in 70 countries, supplying various products across 18 platforms to 23,000 customers worldwide. From a direct sourcing and processing presence in most major producing countries, Olam has built a global leadership position in many of its businesses. Headquartered in Singapore and listed on the SGX-ST on February 11, 2005, Olam currently ranks among the top 30 largest primary listed companies in Singapore in terms of market capitalisation. In 2016, Fortune magazine recognised Olam at #23 in its ‘Change the World’ list. More information on Olam can be found at www.olamgroup.com. Olam is located at 7 Straits View, Marina One East Tower #20-01, Singapore 018936. Telephone: +65 63394100, Facsimile: +65 63399755
About Mitr Phol Sugar Corporation
Mitr Phol Sugar Corporation is the world’s fourth largest and Asia’s largest sugar producer with 16 sugar mills, eight power plants and four ethanol distilleries, contracting 143,000 farmers across Thailand, Laos, China and Australia. It is also Asia’s largest bio-energy producer and has business interests in wood substitute materials, fertilisers and agriculture-related logistics.