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JAKARTA Aug 7 Singapore's Wilmar International
Ltd is building two large wheat flour mills in
Indonesia, a company executive said, as the firm looks to tap
into rising demand for noodles, bread and convenience foods in
Asia's top wheat importer.
Wilmar's Indonesian unit, PT Wilmar Nabati Indonesia, is
building two wheat flour projects in Gresik in east Java with a
joint capacity of 1 million tonnes per year, Hendri Saksti, the
subsidiary's head of operations, said late on Monday.
Saksti, who declined to give the size of the investment by
the world's largest listed palm oil producer, said the new wheat
flour mills were expected to be in operation in the third
quarter next year.
An emerging middle class in the world's fourth most populous
nation is turning away from staple rice and towards fast foods
and convenience foods.
Domestic flour millers, whose number the Indonesian Wheat
Flour Producers Association (Aptindo) estimates to reach 21 by
the end of this year, have about 7.7 million tonnes of installed
milling wheat capacity, with the biggest mill being owned by
Bogasari Flour Mills in Jakarta at 3 million tonnes a year.
The same group owns Indonesia's second largest mill with a
capacity of 1.7 million tonnes, while the Interflour group owns
mills with a capacity of 750,000 tonnes.
"Indonesia's installed capacity is already quite high at 7.7
million tonnes," said one Sydney-based industry analyst. "I
think Wilmar's move to set up new mills is to do with
expectations of growth in consumption.
"It is about future growth which the industry is expecting."
Last week, the Indonesian Wheat Flour Producers Association
said wheat flour consumption in the country might increase 10
percent in 2012 to as much as 6.8 million tonnes.
The country imports all its wheat, both unprocessed grains
and flour which is largely used to make noodles, bread, cakes,
biscuits and convenience snacks.
Australia supplies around two-thirds of Indonesia's wheat
needs, and Canada and the United States provide the rest. About
60 percent of Indonesia's wheat flour imports come from Turkey.
Other listed firms that could gain from any rise in
Indonesian wheat consumption include Indofood Sukses Makmur
, Singapore's Wilmar International and
Malaysia's PPB Group.
(Reporting by Yayat Supriatna; Writing by Michael Taylor;
Editing by Clarence Fernandez)