Singapore’s Wilmar International announced the formation of Raizen and Wilmar Sugar Pte Ltd. (RAW), a new 50:50 joint venture launched in partnership between Raizen Energia S.A., Brazil’s top sugar and ethanol producer, and Wilmar Sugar Pte Ltd., a subsidiary of Wilmar International.
Once operational, RAW will be one of the top sugar exporters in Brazil, bringing together the country’s top sugar producer with the world’s top sugar trader to ship a total of 4.5 million tons per year to Wilmar’s global network of destination markets.
“Our project is a new step towards improving client service in the global sugar market, based on the complementary strengths of Raízen and Wilmar and their consolidated leadership position in the respective market segments in which each of the companies operate,” said Jean-Luc Bohbot, Group Head of Sugar at Wilmar International and CEO of the newly formed Raizen and Wilmar Sugar Pte Ltd.
The tie-up will also prove to be a major rival to Alvean – a Brazilian sugar joint venture between Cargill and Copersucar SA that shipped five million tons of sugar from the country last season according to Bloomberg.
RAW will be headquartered in Singapore and will have a team of between 10 and 15 employees taken from both parent companies. A wholly-owned Wilmar subsidiary located in Sao Paulo will be tasked with sourcing the sugar for the venture.
Wilmar entered the global sugar market with its 2010 acquisition of Australia’s Sucrogen Limited, one of the world’s largest sugar companies, now known as Wilmar Sugar, and PT Jawamanis Rafinasi – one of Indonesia’s top sugar refiners according to the company’s website. In the ensuing years, the group has extended its global reach in the space through the acquisition of Indonesia’s PT Duta Sugar International and Proserpine Mill, the fifth largest sugar mill in Australia. In 2013, Wilmar went on to acquire a 27.5 percent stake in Morocco’s Cosumar S.A. – the only sugar producer in the country and the third largest producer and second largest refiner in Africa. This stake was later raised to 29.5 percent in 2015. In 2014, Wilmar acquired a 27.72 percent stake in Shree Renuka Sugars Limited, the top producer in India, and created a 55:45 joint venture with Great Wall Food Stuff Industry Co. Ltd., the leading sugar company in Myanmar.
This latest joint venture, which has already secured all necessary regulatory approvals, will extend Wilmar’s presence in the sugar sector in South America, while also enabling Raizen to consolidate its position in Brazil.
“Our main incentive is the potential to further improve the return to our production assets by strengthening our presence in the international market,” said Leonardo Gadotti, Chairman of the Board of Directors of RAW and Executive Vice President of Logistics, Distribution & Trading of Raízen. ”This will be achieved through a strategic partnership in the trading segment with our partner Wilmar, a company with considerable expertise in the sector.”
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Lynda Kiernan
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