Acquisition doubles Olam Agri’s natural rubber processing capacity in Ivory Coast

Singapore – Olam Agri has completed the acquisition of Asia Africa Rubber Industry SA (ASAF), adding 176 kilotonnes per annum (ktpa) of natural rubber (NR) processing capacity in Cote d’Ivoire.

The acquisition “nearly double[s]” Olam Agri’s rubber processing capacity in the country, “significantly improving” its operational efficiency and supply reliability, said the group 17 Aug.

The deal, said the Singapore-headquartered group, is expected to unlock synergies across “global logistics, supply chain, trading and marketing network”, strengthening the supply of “traceable, responsibly sourced” rubber to key export markets.

The deal also increases access to international rubber customers through ASAF’s existing strategic customer partnerships.

According to Olam Agri, Cote d’Ivoire has become the world’s third-largest NR producer and exporter of technically specified rubber (TSR) in recent years.

The growth has been driven by a significant expansion in rubber cultivation and local processing capacity.

Olam Agri’s integrated rubber business spans trading, processing and marketing, operating “smart factories” in Cote d’Ivoire, with trading and marketing offices in Singapore, Shanghai, Bangkok, Jakarta and Ho Chi Minh City.

The group said it has an annual global trade flow of more than 750ktpa of “traceable, sustainable products,” including multiple grades of NR to “the majority of the top tire makers globally.”

The acquisition will also strengthen Olam Agri’s sustainable natural rubber business.

Additional processing capacity and greater control over rubber sourcing in Cote d’Ivoire will allow the company to extend “plot-level traceability and responsible-sourcing standards”.

This will support customers’ due-diligence and deforestation-free supply-chain requirements as regulatory and buyer expectations increase, Olam Agri said.

“Over the past five years, we have expanded processing capacity in Cote d’Ivoire more than four-fold through sustained investment across the value chain,” said Ashok Hegde, CEO – Fibre, Agri Industrials & Ag Services at Olam Agri.

The ASAF acquisition, he said, builds on that progress and reflects our “long-term commitment to investing in the country.”