Olam acquires BT Cocoa in a $90 million deal

To capitalise on surging cocoa powder consumption in Asia, Singapore stock market-listed agri-business Olam has acquired an 85% stake in YTS Holdings, the 100% owner of Indonesia’s largest cocoa processor PT Bumitangerang Mesindotama (BT Cocoa).

The $90 million deal will add 120,000 tonnes of cocoa bean processing capacity and 30,000 tonnes of cocoa mass pressing capacity.

The operation reflects growth in global chocolate consumption, which exceeded 6 million tonnes in 2018.

Indonesia is currently the world’s sixth largest cocoa producer, while Asia is set to become the second largest consumer in the world led by China, India, Japan and the Philippines.

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

Growth in snack food categories like sweet biscuits and cookies, which accounted for 40% of new product development in Asia in 2018, is driving this trend.

As part of its 2019-2024 strategic plan, Olam recently revealed its intention to sell off four business segments (sugar, rubber, wood products and fertiliser) to release $1.6 billion in cash for reinvestment.