Olam International to invest US$61 million in new cocoa processing facility in Indonesia

Posted by AFN Staff Writers on 26th May 2014
Olam International will invest US$61 in cocoa processing facility in Indonesia

International agribusiness Olam International Limited (Olam), has announced that it will be investing US$61 million to establish a new cocoa processing facility in Indonesia.

Olam, which is based in Singapore and has businesses that operate across the value chain in 65 countries, said the project will enable it to “leverage the strength of its Indonesian cocoa sourcing network and participate in the growth of Asian cocoa consumption”.

With an initial capacity of 60,000 metric tonnes, the facility will produce cocoa butter, cocoa cake and high quality cocoa powders. The plant will primarily grind Indonesian beans sourced through Olam’s traceable cocoa network. The Olam network includes the 32,000 farmers who form the core of its sustainable supply chain in the country, as well as from its plantation on Seram Island acquired in 2013. In addition, beans will be supplied from Olam’s farm-gate networks in Africa.

The Company said its investment was in line with its Cocoa strategy of integrating its global cocoa bean supply chain capabilities with processing capacities in selected origins to “address the growing outsourcing trend by confectioners” and the “rising global consumption demand for sustainable high quality cocoa products”, particularly in Asia. Olam said Indonesia was one of the major origins for cocoa beans as well as a growing market for cocoa products.

“Olam’s decision to make a strategic move to establish a processing facility in Indonesia is based upon our long term investment in sourcing cocoa in the country and perfectly meets the requirements of Olam Cocoa’s strategy,” said Gerry Manley, Olam’s Managing Director and Global Head for Cocoa.

“We strongly believe that we are entering a phase of exceptional growth in Asian demand, which will redefine the consumption trends for cocoa and the requirements for high quality products by our customers,” Mr Manley said. “The ability for the Indonesian facility to be a hub for Asia underlines our belief in the strength of the Indonesian economy and attractiveness for investment,” he said.

Olam said its Cocoa business was one of the platforms it had identified to invest and grow. The Company said it had already made a series of investments in the processing and the ingredients business in Africa and Europe.

The cocoa processing plant is expected to commence operations in early 2016.