Sector News

Cargill Seeking Poultry Play, Building Palm Oil Mills In Indonesia

April 21, 2015
Food & Drink
Cargill Inc. is seeking to enter the Indonesian poultry sector and is investing in mills for its growing palm oil business there, part of its plans to pour $1 billion into Southeast Asia’s largest economy in the coming years.
 
The Minnesota-based company is “in active discussions” to enter the poultry sector in Indonesia, which will include building a new facility and likely partnering, Alan Willits, Cargill chairman for Asia-Pacific, said in an interview.
 
“We’ll most likely partner with someone that is an integrated poultry producer, and we’ll do the value-added piece, the same thing we do in Thailand and China,” Mr. Willits said on the sidelines of a World Economic Forum event in Jakarta.
 
He said Minnesota-based Cargill, one of the world’s largest privately held companies, is also building mills to follow investments it made earlier this year in palm oil. He declined to specify the amount of that earlier investment, but said it was “very significant” and part of efforts to reach “critical mass” in the Indonesian palm oil sector, the world’s largest.
 
Last year, Cargill announced plans to invest $1 billion in Indonesia in various sectors over the next three to four years. In the four years before that, the company invested $700 million, including $120 million in a cocoa processing plant, its first in Asia, to meet growing demand across the region.
 
The company is now looking to grow its sweetener and starch business, Mr. Willits said, and is currently building a $70 million factory in West Java that will produce sweeteners for infant formula for domestic and regional sales.
 
He also said the company is “very interested” in entering aquaculture in Asia, something it has yet to do anywhere else. “We’ll most likely buy a global company that” could have a presence in Indonesia, he said.
 
Mr. Willits said Indonesia remains a good long-term bet despite weaker economic growth, with five million people joining the consuming class every year and raising demand for meats and safer food.
 
He said the investment climate appears to be improving under new President Joko Widodo, with the current government “saying all the right things.”
 
Still, new rules to limit foreign ownership plantations to minority stakes, currently under legislative discussion, “would dramatically change our appetite for investing in plantations.”
 
He also said the company could consider investing hundreds of millions in building a large-scale corn-processing facility, but would likely need assurances that importing some amount of corn to feed it wouldn’t conflict with the new government’s food self-sufficiency goals.
 
By Ben Otto 
 

comments closed

Related News

November 27, 2022

Cargill to appoint Brian Sikes as president and CEO

Food & Drink

Cargill will appoint Brian Sikes as its president and chief executive officer on 1 January 2023. The soon-to-be CEO, currently holding the chief operating officer title, has worked at Cargill for 31 years. Dave MacLennan, who has served as Cargill’s CEO since 2013, will assume the role of executive chair of the company’s board of directors.

November 27, 2022

Wellness, self-expression drive the latest trends in colors and flavors

Food & Drink

Comforting colors, feel-good flavors, and unique food and beverage experiences will resonate most with consumers in the new year, according to ADM’s latest Flavor and Color Outlook. ADM anticipates that 2023 will be the year of self-expression, and the company identified four trends that are sure to stand out.

November 27, 2022

Nespresso unveils home-compostable coffee capsules in partnership with Huhtamaki

Food & Drink

Nestlé’s Nespresso brand will pilot home-compostable coffee capsules on the Nespresso Original system in France and Switzerland from spring 2023 before further launches in several other European countries within a year. The paper-based capsules are touted as a breakthrough in packaging technology after three years of R&D.