JAKARTA, Indonesia--Cargill Inc. is seeking to enter the
Indonesian poultry sector and is investing in mills for its growing
palm oil business there, part of its plans to pour $1 billion into
Southeast Asia's largest economy in the coming years.
The Minnesota-based company is "in active discussions" to enter
the poultry sector in Indonesia, which will include building a new
facility and likely partnering, Alan Willits, Cargill chairman for
Asia-Pacific, said in an interview.
"We'll most likely partner with someone that is an integrated
poultry producer, and we'll do the value-added piece, the same
thing we do in Thailand and China," Mr. Willits said on the
sidelines of a World Economic Forum event in Jakarta.
He said Minnesota-based Cargill, one of the world's largest
privately held companies, is also building mills to follow
investments it made earlier this year in palm oil. He declined to
specify the amount of that earlier investment, but said it was
"very significant" and part of efforts to reach "critical mass" in
the Indonesian palm oil sector, the world's largest.
Last year, Cargill announced plans to invest $1 billion in
Indonesia in various sectors over the next three to four years. In
the four years before that, the company invested $700 million,
including $120 million in a cocoa processing plant, its first in
Asia, to meet growing demand across the region.
The company is now looking to grow its sweetener and starch
business, Mr. Willits said, and is currently building a $70 million
factory in West Java that will produce sweeteners for infant
formula for domestic and regional sales.
He also said the company is "very interested" in entering
aquaculture in Asia, something it has yet to do anywhere else.
"We'll most likely buy a global company that" could have a presence
in Indonesia, he said.
Mr. Willits said Indonesia remains a good long-term bet despite
weaker economic growth, with five million people joining the
consuming class every year and raising demand for meats and safer
food.
He said the investment climate appears to be improving under new
President Joko Widodo, with the current government "saying all the
right things."
Still, new rules to limit foreign ownership plantations to
minority stakes, currently under legislative discussion, "would
dramatically change our appetite for investing in plantations."
He also said the company could consider investing hundreds of
millions in building a large-scale corn-processing facility, but
would likely need assurances that importing some amount of corn to
feed it wouldn't conflict with the new government's food
self-sufficiency goals.
Write to Ben Otto at ben.otto@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires