to invest 45 mln usd in Vietnam coffee facility
October 9, 2007
Singapore -- Agricultural commodities supplier Olam
International said Tuesday it is investing 45 million US
dollars in a greenfield soluble coffee manufacturing
facility in Vietnam.
Olam, which is the world's largest supplier of Robusta
green coffee, said the facility will produce and supply
bulk spray-dried coffee powder, freeze-dried coffee
granules and coffee extracts to the unbranded and private
coffee label segment.
The company will build the facility in two phases. It aims
to have production capacity of 3,700 metric tonnes per
annum by the first quarter of 2009, and then expand
capacity to 6,500 metric tonnes by 2011.
"Our expansion into soluble coffee manufacturing is a
one-step adjacency move into a higher value-added activity
in the coffee supply chain, where there is a sharing of
customers, costs and channels," Olam's managing director
for coffee, Vivek Verma, said in a statement.
The company said the overall soluble coffee market has
been growing at 4 percent per annum over the last five
years and the size of the market is now worth 3.65 billion
Olam expects the investment to be earnings accretive from
"EBITDA margins and net profit .... (from 2013 onwards)
are expected to be around 29 percent and 5-6 million US
dollars, respectively," it said.
(1 US dollar = 1.47 Singapore dollars)