Golden Agri Resources Ltd., (GAR) established a new subsidiary, Golden Agri-Resources Brasil Sociedade Limitada Unipessoal (GAR Brazil), to enter sugar business in Brazil - Photo by Sinar Mas CEPSA Office

JAKARTA (TheInsiderStories) – Golden Agri Resources Ltd., established a new sugar unit, Golden Agri-Resources Brasil Sociedade Limitada Unipessoal (GAR Brazil), to enter Brazilian market, said the company today (10/08). The parent, PT Sinar Mas Agro Resources & Technology Tbk (IDX: SMAR), has acquired the entire sugar business division of Singapore’ RCMA Group Pte. Ltd., on November 2019 to run the plans.

According to head of global vegetable oil & oilseeds GAR, Paul Hickman, said the company’ has identified trade opportunities in the sugar business, especially in South America. He added,”Establishing a subsidiary in Brazil, which is one of the largest sugar exporting countries in the world, is a logical strategy.”

Apart from Brazil, the new entity also operates in Singapore and Netherlands, as part of food business diversification. Currently, Golden Agri manages palm oil plantations with a total planted area of ​​499,563 hectares in Indonesia.

Last year, the producer’ annual production was 21.5 tons of fresh fruit bunches per hectare. Their factories produce crude palm oil extract from the fruit kernel with a combined capacity of 13.4 million tons per annum. As of first half of 2020, the unit of SMAR, posted a revenues of US$3.39 billion, or up 7 percent compared to the same period last year of $3.16 billion.

However, the issuer’ EBITDA was depressed 4 percent to $187 million from $198 million earlier. Golden Agri also booked net loss $157 million from last year $46 million. One of the triggers was the company’ sales volume was decreased by 7 percent also the CPO price which dropped significantly due to the pandemic.

Persitence Market Research sees, by end of 2025 end, the global palm sugar market is expected to reach a value of more than $2.00 billion. In terms of volume, the global palm sugar market was stood at 747,525 metric tones (MT) by end 2017, and is expected to reach 958,512 MT by 2025.

In terms of value, the liquid segment by form is expected to witness fastest growth and is likely to expand at a CAGR of 4.2 percent in eight years period since 2017. In terms of value, the powder segment is projected to be the most attractive form in the global palm sugar market during the forecast period.

The global palm sugar market is primarily characterized by a large number of local and regional players. An approximate share of 70 – 75 percent is accounted for by local players. North America and Western Europe are the two main target regions due to an increasing number of health conscious consumers and rising demand for organic and healthy food products in the market.

While, Indonesia is the largest producer of palm sugar, local manufacturers and regional players become the price regulators of the market. The market share held by multinational players is very low, accounting for just about 10 percent, owing to the high prices of palm sugar.

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