Olam acquires Indonesia’s largest cocoa processor BT Cocoa for US$90m

INDONESIA – Agribusiness giant, Olam International has bought 85% stake in YTS Holdings Pte Limited, the parent company of Indonesia’s largest cocoa processor, BT Cocoa for a consideration of US$90 million.

According to Olam, the deal will enable it to capitalize on the growing Asian market, which is poised to become the largest global consumer of cocoa powder.

Olam will acquire an additional 120,000 metric tonnes of cocoa bean processing capacity and 30,000 metric tonnes of cocoa mass pressing capacity to serve increasing demand for cocoa products in Asia.

BT Cocoa (PT. Bumitangerang Mesindotama) complements Olam Cocoa’s activities in traceable cocoa sourcing and processing and grants Olam a strong footprint in Asia, where consumption of cocoa powder is on the rise.

The company supplies size and scale in Indonesian cocoa processing with a total installed cocoa bean grind and cocoa mass capacity of 150,000 metric tonnes.

“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,” said CEO of Olam Cocoa, Gerard A. Manley.

Strong strategic fit and addressing global demand

According to Olam, the acquisition addresses the increasing customer demand for full integration within the cocoa supply chain while deriving significant synergies in sustainable cocoa ingredients.

Olam Cocoa is a market leader in sustainable cocoa supply offering origin sourcing, trading, risk management, value chain processing, research, development and innovation in the entire value chain.

BT Cocoa’s prominence in cocoa supply opens new market opportunities for Olam Cocoa’s ingredients portfolio, such as value cocoa powders brand Huysman, which was launched in Asia in 2018, and to complement premium cocoa brand deZaan.

The deal builds on a three-year collaborative agreement between BT Cocoa and Olam, which has helped BT Cocoa achieve a 30% reduction in energy consumption.

“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 3 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,” said Piter Jasman of BT Cocoa.

Olam says the acquisition will help address the growing trend in global cocoa consumption, estimated above 6 million metric tonnes in 2018.

Indonesia is currently the world’s 6th largest cocoa producing country and Asia is set to become the second largest consumer of cocoa ingredients in the world led by China, India, Japan and the Philippines.

Asian demand for cocoa powder is increasing with a 5-year CAGR projection of 8%.

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