Olam to establish new cocoa processing facility in Indonesia

Olam International, a Singapore-based processor of agricultural products and food ingredients, has announced plans to invest around $61m to establish a new cocoa processing facility in Indonesia.

The new project will enable the company to utilise the strength of its Indonesian cocoa sourcing network, while participating in the growth of Asian cocoa consumption.

The new facility will produce cocoa butter, cocoa cake and high-quality cocoa powders, with an initial capacity of 60,000t.

The plant will primarily grind Indonesian beans sourced through Olam’s traceable cocoa network, 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.

Olam’s traceable cocoa network covers 32,000 farmers who form the core of its sustainable supply chain in Indonesia.

The plant is expected to begin operations in early 2016.

Olam noted that the investment is in line with company’s cocoa strategy of integrating its global cocoa bean supply chain capabilities with processing capacities in selected regions.

The integration will enable the company to address the growing outsourcing trend by confectioners as well rising global consumption demand for sustainable high-quality cocoa products, according to Olam.

Olam International cocoa global head and managing director Gerry Manley said that Olam’s decision to establish a processing facility in Indonesia is based on the company’s long-term investment in sourcing cocoa in the country and perfectly meets the requirements of Olam Cocoa’s strategy.

"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," Manley said.

Olam International finance and business development executive director A.Shekhar said the cocoa business is one of the platforms that the company has identified to invest and grow.

"We have made a series of investments in the processing and the ingredients business in Africa and Europe, leveraging upon our strong origination presence. The expansion of our cocoa processing footprint into Asia with a state-of-the-art facility is a strategic and timely move," Shekhar added.

Headquartered in Singapore, Olam operates in 65 countries, supplying various products across 16 platforms to over 13,600 customers worldwide.