According to a statement, Bunge Agribusiness will form a joint venture with PT Bumiraya Investindo (BRI), the palm plantation subsidiary of PT Tiga Pilar Sejahtera Food Tbk (TPS Food).
Under the terms of the agreement with TPS Food, Bunge would acquire a 35% minority stake in BRI.
Susan Burns, a spokesperson for Bunge, told FoodNavigator-Asia that pending shareholder and regulatory approvals, the company expects to close the transaction by the end of the year.
Burns however declined to disclose the financial terms of the deal, adding that the investment is a long-term one for the company.
According to Burns, Bunge uses palm oil in some of its end products and it is widely used within the company’s customer base.
“Because palm is so complementary to our existing oilseeds business, we can leverage our core capabilities and experience effectively in the value chain. We already trade palm oil and this investment is a first step in building an upstream presence,” Burns said.
BRI owns land banks in Sumatra and Kalimantan and operates four plantations in Kalimantan. It is also constructing a crude palm oil mill in Kalimantan, according to the statement.
Bunge Asia, the Asia-Pacific operating arm of Bunge Ltd, supplies agricultural commodities and products such as protein meals, vegetable oils, grains and sugar to customers in the livestock and food industries.
Bunge also buys, sells, stores and transports oilseeds and grains to serve customers worldwide as well as processing oilseeds to make protein meal for animal feed and edible oil products for commercial customers and consumers.