Olam Agri acquisition nearly doubles rubber processing capacity in Ivory Coast

Singapore – Olam Agri has completed its acquisition of Asia Africa Rubber Industry S.A., adding 176,000 metric tons of annual rubber processing capacity in Ivory Coast as the company moves to expand its natural rubber business and meet growing demand for traceable supplies.

The acquisition nearly doubles Olam Agri’s rubber processing capacity in the West African country and is expected to improve operational efficiency, supply reliability and access to international customers, the company said.

The deal also is expected to create efficiencies across Olam Agri’s logistics, supply chain, trading and marketing operations. ASAF’s existing customer relationships will give Olam Agri additional access to international rubber buyers.

Ivory Coast has become the world’s third-largest producer of natural rubber and a major exporter of technically specified rubber, or TSR, as cultivation and domestic processing have expanded, according to Olam Agri.

Olam Agri said the acquisition strengthens its position across the rubber value chain, which includes sourcing, processing, trading and marketing. The company operates processing facilities in Ivory Coast and maintains trading and marketing offices in Singapore, Shanghai, Bangkok, Jakarta and Ho Chi Minh City.

The company’s global rubber network supports trade flows of more than 750,000 metric tons annually, while its products include multiple grades of natural rubber designed for customers in industries such as tire manufacturing. Olam Agri says it serves the majority of the world’s top tire makers. (Olam Agri)

The acquisition also is intended to strengthen traceability and responsible sourcing. Olam Agri said greater control over rubber origination in Ivory Coast will allow it to extend plot-level traceability and help customers meet increasingly stringent due-diligence and deforestation-free supply-chain requirements.

Ashok Hegde, CEO of Fibre, Agri Industrials & Ag Services at Olam Agri, said the acquisition follows more than four-fold growth in the company’s rubber processing capacity in Ivory Coast over the past five years.

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

Vijeth Shetty, global head of Olam Agri’s rubber business, described ASAF as a strategic fit because its processing operations, sourcing network and customer relationships complement Olam Agri’s existing business.

The acquisition comes as demand increases for natural rubber that can be traced to its source and produced under responsible-sourcing standards. Olam Agri said the additional capacity will help it provide customers with greater supply consistency while expanding its presence in key export markets.

ASAF employees will join Olam Agri as part of the transaction, the company said. (Olam Agri)