Editorial: Indofood Brazil Move Worth Emulating
Increased trade and investment flows among emerging economies have been on the international agenda in recent years. With the rise of countries such as Brazil, India, China, Turkey and Indonesia, it is desirable that economic activity among these countries grows.
That hope is turning into reality. Indofood Sukses Makmur, the largest maker of instant noodles in the world, has just announced the planned acquisition of a 50 percent stake in a plantation company in Brazil.
The deal will further enhance Indofood’s reputation as a global company. The company already has factories in Africa and the Middle East and its planned expansion into South America is exciting.
In a filing to the Singapore Stock Exchange on Monday, Indofood Agri Resources (IndoAgri), Indofood’s plantation unit and cooking oil producer, said it was buying a 50 percent stake in Companhia Mineira de Acucar e Alcool Participacoes (CMAA), a producer of sugar and ethanol, for $71.7 million. IndoAgri said the acquisition will be financed by internal funds.
The acquisition will enable Indofood Group to expand its presence into the sugar and ethanol industry in Brazil, as well as strengthen the group’s diversified plantation business model. In essence, the company has added a whole new dimension to its operations.
Boston Consulting Group in a recent report named Indofood Group as one of the few Southeast Asian companies that are growing so quickly overseas that they are outpacing multinational companies from the United States and Europe.
More Indonesian companies should follow in Indofood’s footsteps. By expanding into new markets, they are helping the local economy grow even faster. Currently, only a handful of Indonesian companies have operations overseas and very few can be called global players. But going forward, that will change.