LONDON: Global food and agri-business Olam International Limited has announced that it has acquired an 85 percent share of YTS Holdings Pte Limited, for a consideration of $90 million, which is 100 percent owner of PT. Bumitangerang Mesindotama (BT Cocoa).
The remaining 15 percent of shares are to be held by the founding members of BT Cocoa, Piter Jasman and family, a release said.
CEO of Olam Cocoa, Gerard A. Manley said: “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.”
The acquisition satisfies increasing customer demand for full integration within the cocoa supply chain by bringing together Olam Cocoa, a world leader in traceable cocoa bean sourcing and a leading processor of cocoa ingredients, and BT Cocoa, the largest cocoa processor in Indonesia.
Olam Cocoa offers breadth, depth and scalability from origin sourcing, trading, risk management, value chain processing and supply chain solutions, to sustainability, research and development, and cocoa ingredient innovation.
BT Cocoa supplies size and scale in Indonesian cocoa processing with a total installed cocoa bean grind and cocoa mass capacity of 150,000 metric tones and a facility equipped with the latest processing technology.
Olam Cocoa has been working closely with BT Cocoa for nearly three years through a Business Collaborative Agreement and has already made considerable financial and operational improvements, including helping BT Cocoa achieve a 30 percent reduction in energy consumption. This acquisition supports the worldwide positive growth trend of chocolate and cocoa ingredient consumption and the expectation that the need for cocoa processing will continue to grow, supported by additional investment in cocoa producing and consuming countries.
In 2018, global chocolate consumption was above 6.0 million metric tonnes and is expected to increase in the next five years. 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 in particular is increasing with a 5-year CAGR projection of 8.0 percent.
Growth in snack food categories like sweet biscuits and cookies, which accounted for 40 percent of new product development in Asia in 2018, is driving this trend. BT Cocoa’s prominence as an existing supplier to leading chocolate and confectionery manufacturers in the region presents 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.
With its world-leading team of R&D and product development and innovation experts, Olam Cocoa is well positioned to capitalise on these emerging trends to support the needs of regional consumers. Ensuring a strong and sustainable cocoa supply chain Olam Cocoa has been operating in Indonesia since 1996 and is the country’s largest exporter of cocoa beans, establishing the company’s first cocoa sustainability initiative there in 2004.
Since that time, $20 million in premiums have been paid to cocoa farmers and 5.0 million cocoa tree seedlings distributed.
Piter Jasman of BT Cocoa, said: “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.”
Yeong Chye of Olam Cocoa added: “With the acquisition of BT Cocoa we will be able to meet Asia’s increasing demand for cocoa ingredients with additional offerings that support the strong positioning of deZaan ingredients supplied from Singapore. We welcome the potential to further expand the BT Cocoa and Huysman brands in the Asian markets, allowing us to extend our breadth and competitiveness.”