Olam and Mitr Phol to open sugar mill

GLOBAL agribusiness firm Olam International Limited, and Mitr Phol Sugar Corporation, the world's fourth largest and Asia's largest sugar producer are in talks to explore a new greenfield sugarcane milling facility in Indonesia. Should the project push through, it has the potential to source up to 1.2 million metric tonnes of cane from local farmers upon its completion in 2020.

This exploration of a new sugar mill forms part of a broader strategic partnership between Mitr Phol and Olam to boost sugar production in Indonesia. The tie-up sees Mitr Phol investing in a 50.0% stake in Olam's wholly-owned subsidiary Far East Agri, which operates PT Dharmapala Usaha Sukses -- a sugar refinery in Cilacap, Central Java.

The new mill hopes to improve operating efficiencies between companies while enhancing livelihoods by ensuring farmers have sustainable incomes. Sourcing activities will be matched with initiatives to help growers improve yields via upskilling support and the introduction of cutting-edge initiatives such as ModernFarm and DTF Cocoa. In addition to the joint venture, Mitr Phol will join Olam's programme of extending Good Agricultural Practices to farmers across Indonesia, which has been in place since Olam entered the country in 1996.

Joe Kenny, Managing Director and CEO for Sugar & Dairy, Olam International, explained the rationale for the partnership: "This partnership brings together two responsible, leading sugar players with long-term ties in Indonesia. We are fully committed to support the government's goal for self-reliance in sugar production and will deliver quality, safe products to customers and create value for all stakeholders; in particular, we would focus on continuing to improve the livelihood of farmers we source from by introducing cutting-edge technology, and working with them to improve yields and practices to ensure they generate sustainable incomes."

Krisda Monthienvichienchai, CEO of Mitr Phol Sugar Corporation, also highlighted Mitr Phol's commitment to Indonesia: "We are excited to begin our journey in the country by partnering with an established player in Olam. Our shared belief in Indonesia's potential and in creating long-term value will underpin our growth strategy here. We look forward to playing a meaningful role in helping Indonesia become self-sufficient in sugar production by working closely with Olam, the authorities, farmers and all stakeholders."