Home News Olam International Sells 50% Shares of Indonesia’s Far East Agro

Olam International Sells 50% Shares of Indonesia’s Far East Agro

For US$85 Million

Singapore' Olam International has sell its remaining 50 percent stake of Far East Agri Pte. Ltd. for around US$85.0 million to its joint venture partner Thailand-based Mitr Phol Sugar Corporation - Photo by Industry MInistry Office

JAKARTA (TheInsiderStories) – Singapore’ Olam International has sell its remaining 50 percent stake of Far East Agri Pte. Ltd. for around US$85.0 million to its joint venture partner Thailand-based Mitr Phol Sugar Corporation. After the transaction, the global food and agriculture supplying company food book a capital gain about $40.0 million.

Olam divest is part in the sugar joint venture is in line with its six-year Strategic Plan announced in 2019. The transaction is expected to be completed by end-March 2020, subject to customary closing conditions.

In 2017, Mitr Phol announced will invest $100 million for a 50 percent stake in Far East Agri Pte Ltd, which operates a sugar refinery in Indonesia through PT Dharmapala Usaha Sukses in Cilacap, Central Java. The producer acquired 100 percent shares of Dharmapala on Oct. 7, 2007 through direct wholly-owned subsidiary Far East Agri. 

Under the new agreement, Far East will explore the development of a green-field sugar milling facility in East Java. Upon completion in 2020, the sugar mill will source 1.2 million metric tons of cane from farmers.

Krisda Monthienvichienchai, CEO & President of Mitr Phol added: “Our shared belief in the country’s potential and in creating long-term value will underpin our growth strategy there. We look forward to playing a meaningful role in helping Indonesia become self-sufficient in sugar production by working closely with each other, the authorities, farmers and all stakeholders.”

Indonesia is predicted to continue importing sugar until 2019 because of the ongoing revitalization of sugar factories run by state-owned sugar company. The revitalization process of several factories had been completed, but they could only produce 50 percent of their capacity because the country’s sugarcane farms were still in the process of expansion

The national sugar supply was sufficient for early 2017 after an additional 600,000 tons had been imported last year. However, later this year the deficit could reach 500,000 tons, he added.

Its estimated that after the state-owned company had been revitalized, national sugar production would reach up to 3.2 million tons by 2019, which would meet domestic consumption of 235,000 tons per month.

Indonesia is predicted to continue importing sugar until 2019, because of the ongoing revitalization of sugar factories run by state-owned sugar company. The revitalization process of several factories had been completed, but they could only produce 50 percent of their capacity because the country’s sugarcane farms were still in the process of expansion

The national sugar supply was sufficient for early 2017 after an additional 600,000 tons had been imported last year. However, later this year the deficit could reach 500,000 tons, he added.

Its estimated that after the state-owned company had been revitalized, national sugar production would reach up to 3.2 million tons by 2019, which would meet domestic consumption of 235,000 tons per month.

Mitr Phol is the world’ 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.

While Olam operating across the value chain in 70 countries, supplying various products across 18 platforms to 23,000 customers worldwide.

Written by Staff Writter, Email: theinsiderstories@gmail.com