SINGAPORE-based Olam International, a global, integrated supply chain manager and processor of agricultural products and food ingredients, is partnering with the Government of the Republic of Gabon to develop 28,000 ha of rubber plantations in Gabon in Phase 1. The total investment amount is estimated at US$183 million.
Olam will hold a 80% interest in the joint venture and the remaining 20% will be held by the Gabon government. Based on the progress in Phase I, the JV plans to develop an additional 22,000 ha in Phase II taking the total plantings to 50,000 ha making it one of the largest plantations in Africa.
Olam’s Senior Vice President and Head of Rubber, Ashish Govil said: “One of the key thrusts of our long term strategy is to selectively invest in upstream plantations in countries that enjoy a long term sustainable competitive advantage in the production of agricultural raw materials. The largest part of the profit pool in the rubber value chain (about 75%) is domiciled in upstream plantations. We believe Gabon is one of the most competitive locations for rubber plantations given the availability of land, suitable soil and agro-climatic conditions, superior yields and the long term support and fiscal incentives provided by RoG for pioneering projects of this nature and scale.”
Planting is expected to commence by FY2013 and be completed by FY2019. The plantation is expected to achieve an average yield between 2.0 and 2.2 tonnes/ha. The investment includes setting up a processing unit with a capacity to process 225 tonnes/day of rubber cup lumps. At full maturity, the project will generate annual volumes of approximately 62,000 tonnes of dry rubber. The rubber products will be exported to the tyre and general rubber goods industries worldwide.(PRA)
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