Golden Agri incorporates Brazilian sugar subsidiary

INTEGRATED palm oil producer Golden Agri-Resources on Tuesday said it has incorporated a fully-owned sugar subsidiary in Sao Paolo, Brazil, called Golden Agri-Resources Brasil Sociedade Limitada Unipessoal.

Golden Agri head of global vegetable oil and oilseeds Paul Hickman said in a bourse filing that by taking advantage of Golden Agri's extensive palm-based distribution capabilities, its entry into sugar merchandising provides a low-cost, asset-light, niche contribution to its business.

"We can continue to offer excellent service to our existing palm oil customer base, offer an aligned sugar service to those palm customers where it is a related ingredient and use our distribution capabilities efficiently to serve new and existing sugar-only customers," he said.

Mr Hickman added that establishing a presence in Brazil - one of the biggest sugar exporters in the world - is a logical extension of Golden Agri's current sugar activities.

The new subsidiary is backed by experienced professionals, with a business focus on containerised white sugar, Golden Agri said.

It added that its European sales team identified complementary merchandising opportunities in sugar, aligned with its existing palm oil distribution network and customer profile. This led it to acquire RCMA Group's sugar business in November 2019.

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RCMA is a commodity and supply chain management company focused on white sugar container trading.

Golden Agri previously made investments in sugar trading in Europe in 2018, it said at the time.

Shares of mainboard-listed Golden Agri closed flat at 14.2 Singapore cents on Monday.