Singapore-based Wilmar International, the world’s biggest palm oil producer, announced it has agreed to invest US$145 million in exchange for a major stake in India’s Shree Renuka Sugars. Global sugar consumption is expected to increase 2.5% to 181 million tons in 2014/15. This deal marks the third move within four years by Wilmar to expand its presence in the global sugar industry, and the first expansion into one of the world’s top two sugar producing countries. The investment will see Wilmar have an equal stake in Shree Renuka as the company’s founders and will help Shree Renuka pay down its $1.2 billion in debt – a result of its acquisition of two Brazilian firms, Vale do Ivai SA for $82 million in 2009 and Equipav SA for $329 million in 2010. The global sugar industry is set to see another surplus in 2014 estimated to reach 4 million tons, and Wilmar’s expansion into India’s sugar sector comes at a time when others are looking to exit, however Wilmar’s extensive global reach will provide access to additional export markets for Shree Renuka’s production.
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