Mitr Phol invests $100m to acquire 50% stake in Far East Agri

Singapore-based agriculture business Olam International has formed a joint venture (JV) with Mitr Phol Sugar to capitalise on growth opportunities for sugar milling and refining in Indonesia.

As per the deal, Mitr Phol will invest $100m to acquire a 50% stake in Olam’s wholly owned subsidiary Far East Agri, which operates sugar refinery PT Dharmapala Usaha Sukses (PT DUS) in Cilacap, Indonesia.

The remaining 50% will be retained by Olam.

Olam International sugar and dairy managing director and CEO Joe Kenny said: “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 agreement, Far East will be engaged in the development of a green-field sugar milling facility in East Java.

Upon completion in 2020, the mill will have the capacity to source 1.2 million metric tonnes of cane from farmers.

Mitr Phol president and CEO Krisda Monthienvichienchai said: “We are excited to begin our Indonesian journey by partnering with an established player such as 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.”