The embryo of the Wilmar Group was Wilmar International Ltd which was established in 1991. It is 83% controlled by Wilmar Holdings Ltd, which is jointly owned by Martua Sitorus and Kuok Khoon Hong. Kuok Khoon Hong is a nephew of Rober Kuook, a Malaysian tycoon and Martua Sitorus alias Thio Seng Hap, is a businessman from Indonesia of Chinese origin. According to Forbes Asia, Martua Sitorus is among Indonesia's 14 richest men with assets valued at Rp 27.5 trillion in 2010.
Martua Sitorus began his business career as a palm oil trader in Indonesia and Singapore. His business thrived and in 1991 he already had 7,100 hectares of oil palm plantations North Sumatra. In the same year his company built two palm oil processing factories.
Wilmar International Limited is the largest agribusiness company in Asia listed on the Singapore Stock Exchange. Wilmar International Holdings Ltd, which is based on the Virgin Islands, Britain, also has a stake in Archer Daniels Midland Company, which is listed on the New York Stock Exchange. In addition, it controls China National Cereals, Oils & Foodstuffs Corp, a leading company processing farm products in China.
Recently Wilmar International Ltd launched back door listing on the Singapore Stock Exchange through a US$ 1.29 billion reverse take over with Ezyhealth Asia Pacific. The corporate action involved sales of business in medical equipment of Ezyhealth to CEO, Sin Keng Choo, valued at US$ 5 million.
Wilmar Group which is based in Singapore operates in oil palm plantation business, CPO processing, CPO export and import, vegetable oil, palm kernel and specialty fat, bio-diesel, property business, etc.
In India, Wilmar International has five CPO processing factories and
owns half of Gujarat Adani. Wilmar Ltd sells cooking oil to 20 million households in India.
Most of Wilmar's oil plantations are Indonesia totaling 350,000 hectares located in Sumatra and Kalimantan and 200,000 hectares of the plantations have been cultivated. It has factories with a total processing capacity of 240,000 tons fresh fruit bunches per day and with a capacity utilization of 80%. The largest plants are found in Dumai and Pelintung with a total capacity of 9,000 tons per day.
Wilmar Group plans to expand its oil palm plantations to 500,000 hectares--1 million hectares with an investment of US$ 500 million in the next several years.
So far Wilmar Group has more than 300 factories producing CPO in Indonesia, China and India and distribution units in 50 countries to support the marketing of its palm oil production. Wilmar also produces and distribute fertilizer and has a fleet of ships. It has a force of more than 88,000 multinational staff. Currently it has 48 subsidiaries, and has a 40% share of the country's CPO production.
In addition to the Wilmar Group, Martua Sitorus also has another company group, Karya Prajona Nelayan (KPN) Group, established in 1978. KPN. Has a number of subsidiary PT Bukit Kapur Reksa in Dumai; PT Multi Nabati Asahan in Tanjung Balai Asahan; and PT Sinar Alam Permai in Palembang, which produce palm kernel.
KPN is a major player in the country's CPO industry. It has CPO terminal built with an investment of Rp 15 billion in Sabak, Jambi. KPN has units operating in oil palm plantation, cooking oil, expedition and fertilizer businesses.
Palm Oil Industry
Palm oil industry has become the core business of Wilmar Group. The company group has 36 subsidiaries operating in the oil palm plantation, and palm oil processing industry including PT Agrindo Indah Persada, PT Musi Banyuasin Indah, PT Agro Masang Perkasa, and PT Selatan Jaya Permai. Its oil palm plantations are located in South Sumatra, North Sumatra, West Kalimantan, Riau, and West Sumatra. Wilmar has become a member of the RSPO since September 2005 and has secured the certificates for all palm oil business operations.
Its business in palm kernel is carried out by four subsidiaries PT Bukit Kapur Reksa, PT Karya Prajona Nelayan, PT Sinar Alam Permai, and PT Mekar Bumi Andalas. Its business locations are in Riau, Kuala Tanjung (North Sumatra), Palembang, and Padang. The production capacity of the four factories is 800,000 tons per year and to be expanded to 1.5 million tons in the coming years. With that capacity, Wilmar is the largest producer of palm kernel in Indonesia.
Wilmar Group has CPO processing factories with a production capacity of 3.3 million tons per year. Wilmar also buys CPO from other companies including PT. Astra Agro Lestari, PT. Ivo Mas Tunggal, and PP London Sumatera Indonesia Tbk.
PT Karya Putrakreasi Nusantara is a vegetable company based in Medan. Its production is used by food, detergent and cosmetic manufacturers as feedstock.
PT. Kencana Sawit Indonesia (PT. KSI) has oil palm plantations in three locations totaling 10,216 hectares, of which 7,728 hectares in West Sumatra have been cultivated. It also has plasma farms totaling 650 hectares supplying their fresh fruit bunches (FFB) to feed its processing factories to produce CPO.
PT Kerry Sawit Indonesia (PT. KSI) has 3 oil palm plantations totaling 18,994 hectares, of which 15,557 hectares have been cultivated. It has an annual production capacity of 250,000 tons of CPO/year.
According to plan, Wilmar Group will build 5-6 units of factories producing CPO derivatives with a total investment of US$ 900 million. The project is to be implemented in 2013. The group has decided to change its downstream investment plans in Malaysia and China in favor of Indonesia. The change followed the government regulation on development of downstream palm oil industry. The factories are to be built in Riau, where the feedstock in CPO is available in larger volume.
The government has also pledged to improve the condition of infrastructure in Riau including roads and port facilities in Riau. The government also plans to modernize the infrastructure including the port of Sei Mangke in North Sumatra, where a new cluster of downstream palm oil industry will be built.
Cooking oil industry
PT. Multimas Nabati Asahan (PT. MNA) is a producer of CPO, palm kernel and CPO-based cooking oil. It started operation in 1996 with a CPO production capacity of 1,500 metric tons a day. Its factory is located in Kuala Tanjung, Asahan, North Sumatra. PT. MNA produces cooking oil known in the market with the brands of Sania and Fortune.
In 2009, the business competition watchdog Komisi Pengawas Persaingan Usaha (KPPU) punished 18 cooking oil producers including PT MNA with a total fine of Rp 299 billion for forming a cartel to control cooking oil prices with affine ranging from Rp 1 billion to Rp 25 billion each. The KPPU said the cartel had caused a loss of Rp 1.5 trillion in 2008.
PT MNA and a number of other companies PT Sinar Alam Permai, PT Wilmar Nabati Indonesia, and PT Agrindo Indah Persada appealed the verdict to a higher court.
Wilmar Group through PT Cahaya Kalbar Tbk is also a producer of cooking oil basic material and cacao. In 2008 it invested Rp 33.8 billion in palm oil transport. The investment was used to acquire a 26% stake or in shipping company PT Pelayaran Tirtatjipta Mulya Persada. The acquisition is aimed at facilitating its exports and inter-island shipments. Cahaya Kalbar exports 40% of its production.
In 2004, the Wilmar Group began business sin the fertilizer industry producing natrium phosphate and kalium (NPK) fertilizer. In 2005, it's built a bio-diesel factory. The company group also has business unit operating in chemical oils. It has a number of tankers with a carrying capacity of from 10,000 to 20,000 tons. It plans to buy tankers with a carrying capacity of 30,00 tons.
The Wilmar Group plans to move its bio-diesel factory from China and India to Gresik, East Java, where the facility is fairly good. The government, however, asked the conglomerate to invest in downstream palm oil industry outside Java. The company group pledged to comply with the government's request in Riau on condition, the government provide adequate infrastructure, especially road and port facilities.
In 2007, the Wilmar Group had three bio-diesel factories in Riau, each with a total production of 350,000 tons per year.
Altogether the Wilmar Group has 48 companies in Indonesia. One of the companies is PT Multimas Nabati Asahan, which produces cooking oil known with the brand of Sania. In its financial report, the group had assets valued at US$ 15.5 billion in 2007 with income of US$ 16.46 billion and net profit of US$ 675 million.
In June 2010, Wilmar established a joint venture with Elevance Renewable Sciences Inc to build bio refinery with a capacity of 360,000 tons per year. The bio refinery is to be built in Surabaya, East Java. The company will use the technology of Biorefinery Proprietary Elevance to produce chemicals, bio-fuiels and oleo-chemicals with high commercial value . The products will be sued to produce surfactant, anti-microbe, lube oil and renewable bio-fuels.
Double refined sugar industry
In mid 2011, Wilmar International Limited acquired a producer of double refined sugar, PT Duta Sugar International (PT. DSI) at a price of US$ 105 million. The company plans to expand the production capacity of PT. DSI by 30% from 800,000 tons per year at present.
PT. DSI already has customers and Wilmar plans to expand its market. In the future the Wilmar Group plans to invest in sugar plantations.
The Wilmar Group through its subsidiary PT. Wilmat International Plantation will build sugar factory in Merauke, where it has secured a concession of 200,000 hectares for sugar plantations. The investment in the plantation and sugar factory is estimated to reach US$ 2 billion. The company, however, has yet to build infrastructure as required by the government for all investors in Papua.
Toward the end of 2010, Wilmar started feasibility study hiring experts form Australia on the investment plan. The study is expected to be completed in 2 years.
Other investors like Medco, Rajawali Nusantara Indonesia (RNI) and Sinarmas have also indicated interest in building sugar plantations and factories in Merauke.
In 2010, the Wilmar Group through its subsidiary PT. Wilmar Nabati Indonesia acquired sugar producing company PT Jawamanis Rafinasi at a price of US$ 50 million with factory located in Ciwandan, Banten.
PT Jawamanis Rafinasi is a producer of double refined sugar and is a member of the Association of Indonesian Double Refined Sugar Companies (AGRI). The company has a refining capacity of 1,000 tons per day or 400,000 tons per year.
The Wilmar Group has also acquired Windsor Brook Trading, a sugar trading company based in Singapore to support its marketing drives.
In July 2010, the Wilmar Group acquired Australia Sucrogen, the world's fifth largest sugar factory from Australia's CSR at a price of US$ 1.5 billion. The acquisition is the largest that year in the world's sugar sector.
In early 2011, Wilmar International Limited expanded business to property sector in China where it acquired 6 plots of land in Yingkou, in the province of Liaoning at a price of US$ 204.4 million. In the new venture, the Wilmar Group teamed up with the consortium of Kerry properties Ltd and Shangri-La Ltd with share splits of 35%, 40% and 25% respectively .
According to plan, the 20 hectare lands will be used for property projects building residential houses, commercial buildings, hotels and office buildings with a total investment of US$ 386 million including fund needed for management after the completion of the project. Wilmar secured a 70-year land use rights for residential buildings, 40-year land use rights for other property and commercial buildings.
The Wilmar Group operates around 20 refineries in China in addition to ones in Indonesia and Malaysia. The company also has land reserve of 500,000 hectares for plantations, mostly in Indonesia and Malaysia. By the second quarter of 2008, 215,000 hectares of its plantation land were already cultivated and 137,7,000 hectares were already producing. It sells its production in 50 countries mainly in Indonesia, Malaysia, China, India and Europe.
Based on its financial report, Wilmar had total assets valued at US$ 15.5 billion in 2007 with income at US$ 16.46 billion and net profit of US$ 675 million.
Wilmar International Ltd is listed on the Singapore Stock Exchange and it is the largest publicly traded company in that country by capitalization. In the second quarter of /2008, its income totaled US$ 7.8 billion with net profit of US$ 332 million. Its core businesses are trading, oil palm processing industry , cooking oil manufacturing and plantation..
In the first half of 2011, Wilmar International Ltd reported an increase of 24% on-year in comprehensive profit to US$ 1.19 billion. In the first nine months of this year its income rose 55.9% to US$ 33.19 billion from US$ 21.28 billion in the same period last year. Its gross profit was US$ 3.06 billion or an increase of 55.8% from US$ 1.96 billion. The financial performance, however was still below expectation especially in net profit that rose to US$ 321 million from US$ 259,5 million.
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|Title Annotation:||COMPANY PROFILE|
|Publication:||Indonesian Commercial Newsletter|
|Date:||Jul 1, 2011|
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