Cocoa companies invest in Indonesia
May 19, 2014
by Eric Schroeder
SINGAPORE — Indonesia is becoming a hotbed for cocoa processors, as Olam and Cargill last week unveiled plans to build new facilities in the country. The announcements come about eight months after Barry Callebaut inaugurated a $33 million, 30,000-tonne-capacity joint cocoa processing facility in Makassar, Indonesia. Indonesia is the world’s third largest cocoa bean producer behind Ivory Coast and Ghana in West Africa.
Singapore-based Olam International Ltd. will invest $61 million to build a new cocoa processing plant in Indonesia, a move the company said will leverage the strength of its Indonesian cocoa sourcing network and allow the company to participate in the growth of Asian cocoa consumption.
The facility initially will have capacity of 60,000 tonnes, and will produce cocoa butter, cocoa cake and cocoa powders. The plant primarily will grind Indonesian beans sourced through Olam’s traceable cocoa network, which includes the 32,000 farmers who form the core of its sustainable supply chain in the country, as well as from its plantation on Seram Island. Cocoa beans also will be supplied from Olam’s farm-gate networks in Africa.
“Olam’s decision to make a strategic move to establish a processing facility in Indonesia is based upon our long-term investment in sourcing cocoa in the country and perfectly meets the requirements of Olam Cocoa’s strategy,” said Gerry Manley, managing director and global head for cocoa. “We strongly believe that we are entering a phase of exceptional growth in Asian demand, which will redefine the consumption trends for cocoa and the requirements for high-quality products by our customers. The ability for the Indonesian facility to be a hub for Asia underlines our belief in the strength of the Indonesian economy and attractiveness for investment.”
The cocoa processing plant is expected to begin operations in early 2016. Olam already operates four other cocoa facilities, in the Ivory Coast, Nigeria, Spain and the United Kingdom.
Olam’s announcement came a day after Cargill announced it will begin cocoa processing tests at a new plant in Gresik, in the East-Java region of Indonesia, by the end of May. Cargill is investing $100 million in the facility, which will process approximately 70,000 tonnes of cocoa beans into cocoa powder, cocoa butter and cocoa liquor for customers in Indonesia and other Asian countries.
The Gresik facility will be Cargill’s first cocoa processing plant in Asia. The cocoa beans to be processed at the plant will be supplied primarily from Sulawesi, where cocoa farming is the principal income for hundreds of thousands of families and where Cargill has been sourcing cocoa since 1995. With the plant opening, Cargill will create approximately 200 new jobs in Indonesia, as well as additional positions in its existing R.&D. application center in Kuala Lumpur.
“The commissioning of our new facility brings us one step closer to the realization of our plans to go live,” said Jos de Loor, president of Cargill Cocoa & Chocolate. “We are excited that this also signals that we are closer to meeting the demands and needs of our customers in this region and in Indonesia. As a leading global processor of cocoa, Cargill is committed to providing our customers with high quality cocoa, grown in a sustainable way. Cargill has seen a significant growth in demand for cocoa products across Asia. We plan to continue investment in the region to support the growth of the region and source local crops to produce high-quality cocoa products to meet the needs of customers across the Asia region.”
In another development in Indonesia, Cargill has launched its second Indonesian Cargill Cocoa Promise program in Soppeng, South Sulawesi. The Cargill Cocoa Promise is the company’s global commitment to the development of a sustainable cocoa supply chain and to making a difference in three key areas: improving the lives of cocoa farmers, supporting cocoa farming communities, and investing in the future of cocoa farming.