Mitr Phol Group led by Mr. Krisda Monthienvichienchai , Chief Executive Officer and President and Mr. Buntoeng Vongkusolkit , Chief Operating Officer, announced a strategic partnership with Olam International Limited led by Mr. Sunny George Verghese , Group Chief Executive Officer and Mr. Shekhar Anantharaman , Group Chief Operating Officer, in joint venture for investment in Olam’s sugar business in Indonesia.
Mitr Phol Group, the world’s fourth-largest and Asia’s largest sugar producer, has partnered with Olam International Ltd, a leading agribusiness operating in 70 countries, to invest in Olam’s sugar business in Indonesia.
Mitr Phol will invest US$100.0 million for a 50.0% stake in Olam’s wholly-owned subsidiary Far East Agri (Far East), which operates a sugar refinery in Indonesia, PT Dharmapala Usaha Sukses (PT DUS) in Cilacap, Central Java. Olam will retain the remaining 50.0% stake in Far East.
Krisda Monthienvichienchai, CEO & President of Mitr Phol, said: “We are excited to begin our Indonesian journey by partnering with an established player like Olam. 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.”
Joe Kenny, Managing Director and CEO for Sugar & Dairy, Olam International, explained the rationale for this partnership: “Our potential expansion into sugar milling will transform our overall participation in Indonesia’s sugar industry, which offers attractive investment and return opportunities due to its growing demand and persistent supply deficit. Mitr Phol is a natural partner given our shared vision and complementary strengths. Their strong sugar milling expertise coupled with our farm gate, sourcing and manufacturing capabilities will enable us to cater to the growing demand for sugar in Indonesia.”
Under the new agreement, Far East will explore the development of a green-field sugar milling facility in East Java. Upon completion in 2020, it is expected that the sugar mill will source 1.2 million metric tonnes of cane from farmers.
In addition to the joint venture, Mitr Phol will join Olam’s programme of extending Good Agricultural Practices to farmers across Indonesia, which have been in place since Olam entered the country in 1996.
Mitr Phol Group chief executive and president Krisda Monthienvichienchai shakes hands with Olam International chief executive Sunny George Verghese after signing a joint venture for investment with Olam’s sugar business in Indonesia.