JAKARTA (TheInsiderStories) – Olam International Ltd., (SGX: O32) has secured loans US$176 million expand its Indonesia cocoa processing facility managed by Far East Agri Pte., Ltd., Vietnam, Papua New Guinea, and Uganda, said the company today (04/29). The two-tranches loan from the International Finance Corporation (IFC) and Japan International Cooperation Agency (JICA).
Tomasz Telma, IFC senior director and Said Junichi Yamada, JICA senior vice-president said, “We expect sustainable cacao business in Indonesia will be expanded through this loan facility, which we believe will provide stability to smallholder farmers.”
Last March, Olam has closed the sales of 50 percent stake in Far East Agri to its partner partner Mitr Phol Sugar Corp., for $82.5 million. The transaction has completed end of March.
In 2017, the Thailand firm invested $100 million to take up a 50 percent stake in the Indonesian unit. Then, the two companies entered a sales agreement with an initial total consideration up to $85 million. With the completion of the sale, Far East Agri will cease to be an associated company of the Singapore-based firm.
Far East Agri 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 of the company.
Under the new agreement, the planters 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.
Indonesia is predicted to continue importing sugar 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’ sugarcane farms were still in the process of expansion
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. Last year the deficit was estimating could reach 500,000 tons.
Olam operating across the value chain in 70 countries, supplying various products across 18 platforms to 23,000 customers worldwide. The group had previously said that the sale is in line with its six-year strategic plan announced in 2019 with a focus on businesses with sustainable growth potential, and divesting or restructuring de-prioritized assets and businesses.
Written by Staff Writter, Email: firstname.lastname@example.org