NEW YORK May 16 Olam International Ltd
, one of the world's major cocoa traders, said on
Friday it plans to invest $61 million to build a
cocoa-processing plant in Indonesia, its first in Asia, where
chocolate demand is soaring.
The renewed push into cocoa comes just two months after
Singapore sovereign wealth fund Temasek agreed to take
over Olam, the Asia-based agribusiness group, revitalizing its
weak balance sheet after a tumultuous 18 months.
The plant, Olam's fifth cocoa facility, will have initial
annual grinding capacity of 60,000 tonnes, producing cocoa
butter, cake and high-quality powders from beans grown in
Indonesia and west Africa, the company said in a statement.
Olam is following other commodity giants, which have built
grinding operations in Indonesia, the world's third biggest
cocoa producer, after the government introduced a bean export
On Friday, Cargill, Olam's bigger rival,
commissioned a 70,000-tonne processing plant in Gresik,
Indonesia, with commercial production starting in the third
The wave of investments has raised concerns about a
shortfall in bean supplies in the country as grinding capacity
doubles in the production of butter and powder used in chocolate
cookies and treats.
Olam's move to grow organically also comes as a flurry of
deal-making transforms the niche softs market landscape. In
March, COFCO, China's state-backed trader, bought a major stake
in Noble Group Ltd's agriculture business.
Last month, Archer Daniels Midland Co ditched plans
to sell its large cocoa-processing business after long-running
negotiations to sell the operations collapsed.
Olam, which buys about 500,000 tonnes of cocoa annually,
also has a cocoa plant in Ivory Coast, the world's biggest cocoa
producer, with capacity expected to reach 75,000 tonnes.
It also has grinding capacity of 15,000 tonnes in a leased
facility in Nigeria. It processes cocoa butter and cocoa butter
equivalents in the United Kingdom, and cocoa powder in Spain.
(Reporting by Marcy Nicholson; Editing by Jeffrey Benkoe)