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Sri Lanka’s Silvermill in Indonesia expansion with US$5mn ADB loan

ECONOMYNEXT – Manila-based Asian Development Bank said it will loan 5 million US dollars PTSASL and Sons Indonesia (PTSASL) of Sri Lanka’s Silvermill Group, to expand its coconut processing operations.

The loan will help Silvermill set up a modern processing plant for value-added coconut products for export, benefiting 9,500 smallholder coconut farmers, and creating over 1,200 jobs in the Central Province of the Sulawesi Island.

“As the second largest producer of coconuts in the world, Indonesia’s coconut industry has huge potential to become a high-performing, high value-adding sector of the economy,” ADB Agribusiness Investment Specialist Carine Donges said.

“Silvermill’s expansion to Indonesia will allow the group to tap into a much larger supply of coconut resource, while directly improving livelihoods of thousands of rural households in Central Sulawesi.”

Silvermill is one of Sri Lanka’s largest coconut processing and estate management firms, exporting finished products for both food and beverage and industrial applications. The Indonesian subsidiary was incorporated in 2017.

Sri Lanka faced a decline in coconut and its processed product manufacturing in 2017 due to the worst drought in 40 years which led to a rise in the prices of nuts. The South Asian economy is one of the world’s most vulnerable to climate risks.

“This facility will enable Silvermill to further our multi-sourcing strategy to mitigate climate risks to serve our clients better, while uplifting the coconut community and working towards the betterment of coconut farmers not only in Sri Lanka but also in Central Sulawesi,” Silvermill Group Chief Executive Suresh Silva said.

“We further believe that the synergies between Silvermill and ADB, and our mutual values, will help make a meaningful difference to empower and inspire the communities around us.”

At full operational capacity, the new processing plant will procure over 100 million coconuts annually.

It will provide a stable source of income to local coconut farmers at a premium compared to the traditional off take from manufacturers of copra—the dried kernel of the coconut.

The new plant is expected to produce over 9,400 metric tons per year of desiccated coconut—high-nutrition dried and shredded coconut kernel mainly used for cooking and baking—and has a capacity to produce over 2,500 metric tons of virgin coconut oil per year.

All produce at the plant in the South East Asian archipelago will be exported.

PTSASL is wholly owned by Silvermill, which has been providing high-value coconut-based products globally for almost 100 years since its establishment in 1920. It currently has over 60 products in its portfolio.

The group is also active in the power and energy sector.

Silvermill was famously involved in the development of the ‘Bounty Bar’ for the global chocolate giant Mars Inc. in the 1960s. (Colombo/Dec24/2019)