Olam Agri Acquires Asia Africa Rubber Industry in Cote d’Ivoire

By Modupe Gbadeyanka

To serve rising global customer demand for responsibly sourced natural rubber, Olam Agri has acquired Asia Africa Rubber Industry SA (ASAF).

The acquisition is expected to unlock synergies across the company’s global logistics, supply chain, trading and marketing network, strengthening the supply of responsibly sourced rubber to key export markets. It also increases access to international rubber customers through ASAF’s existing strategic partnerships.

It was gathered that the takeover of ASAF helps Olam Agri to scale its rubber processing capabilities in Côte d’Ivoire, as the former adds about 176,000 metric tonnes (MT) to the latter’s annual rubber processing capacity in the country, giving the company greater scale in the country and geographic density that improves operational efficiency and supply reliability.

In addition, the acquisition advances Olam Agri’s commitment to sustainable, traceable natural rubber.

Additional processing capacity and greater oversight over origination in Côte d’Ivoire enable the organisation to extend plot-level traceability and responsible-sourcing standards. This will support its customers’ due-diligence and deforestation-free supply chain requirements as regulatory and buyer expectations continue to rise.

Global natural rubber consumption is driven by automotive and industrial applications, with annual demand of around 14–15 million MT.

Industry forecasts point to sustained long-term demand for technically specified natural rubber (TSR). Côte d’Ivoire has grown into the world’s third-largest producer of natural rubber and exporter of TSR, driven by a significant scale-up of rubber cultivation and local processing capacity.

“The acquisition of ASAF marks an important milestone for our rubber business. Over the past five years, we have expanded processing capacity in Côte d’Ivoire more than four-fold through sustained investment across the value chain.

“ASAF builds on that progress and reflects our long-term commitment to investing in the country.

“As demand for traceable and responsibly sourced natural rubber continues to climb, we are well-positioned to provide customers with the quality, consistency and service they require,” the chief executive of Fibre, Agri Industrials and Ag Services at Olam Agri, Ashok Hegde, stated.

Also commenting, the Global Head of Rubber at Olam Agri, Vijeth Shetty,  said, “ASAF is a strong strategic fit with our rubber operations in Côte d’Ivoire. Its processing operations, sourcing network and customer relationships complement our business, improving efficiency, deepening our capabilities across the value chain and broadening our reach in key markets.

“We are excited to welcome ASAF’s employees into Olam Agri and to build on the solid foundations they have established.”