Olam has acquired Indonesia’s largest cocoa processor, to capitalise on surging cocoa powder consumption in Asia.
The Singapore-headquartered agri-business has paid $90 million for an 85% share of YTS Holdings, which is the 100% owner of PT Bumitangerang Mesindotama (BT Cocoa). The remaining 15% is held by the founding members of BT Cocoa, Piter Jasman and his family.
The deal will add 120,000 tonnes of cocoa bean processing capacity and 30,000 tonnes of cocoa mass pressing capacity.
Olam Cocoa has been working closely with BT Cocoa for nearly three years and has made “considerable financial and operational improvements”, including helping the firm achieve a 30% reduction in energy consumption.
Olam said the acquisition supports the worldwide positive growth trend of chocolate and cocoa ingredient consumption and the expectation that the need for cocoa processing will continue to grow, supported by additional investment in cocoa producing and consuming countries.
In 2018, global chocolate consumption was above 6 million tonnes and is expected to increase in the next five years.
BT Cocoa’s prominence as an existing supplier to leading chocolate and confectionery manufacturers in the region will present new market opportunities for Olam Cocoa’s ingredients portfolio, such as cocoa powders brand Huysman, which was launched in Asia in 2018.
Olam Cocoa has been operating in Indonesia since 1996 and is the country’s largest exporter of cocoa beans.
Gerard Manley, Olam Cocoa CEO, said: “We are excited to have the opportunity to rapidly expand our footprint in Asia and to develop this business with the founder and family of BT Cocoa.
“Our longstanding relationship will enable us to deliver world-class cocoa ingredients and services to our expanded customer base and look to strengthen these relationships in the future in one of the fastest growing regions in the world.”
Piter Jasman of BT Cocoa added: “The relationship with Olam Cocoa represents a powerful opportunity for BT Cocoa to significantly expand our market with enhancements to quality, safety and ethically responsible cocoa products. The past three years of collaboration has clearly demonstrated the potential for delivering better value.
“The combination of Olam Cocoa’s expertise as the leading global supplier and processor of sustainable cocoa, with BT Cocoa’s strong local network, will provide our customers with increasing benefits.”
Last month, Olam revealed plans to sell off four business segments in the next six years to release $1.6 billion in cash for reinvestment.
As part of its 2019-2024 strategic plan, the company aims to offload its sugar, rubber, wood products and fertiliser businesses as well as other assets that no longer fit with its priorities.
© FoodBev Media Ltd 2020