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Indofood goes ahead with palm oil expansion despite Citigroup’s withdrawal
PT Indofood Sukses Makmur will go ahead with a plan to expand its palm oil business despite Citigroup’s recent decision to stop its financing facilities for the company.
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According to data from the Association of Palm Oil Producers (GAPKI), Indonesia’s palm oil exports increased to 32 million tons in 2018 from 31 million tons in 2017. (Shutterstock/File)
PT Indofood Sukses Makmur will go ahead with a plan to expand its palm oil business despite Citigroup’s recent decision to stop its financing facilities for the company.
Indofood director Thomas Tjhie said Citgroup’s move would not affect his company’s palm oil expansion agenda. “We have no problem with the cancelation,” he told the press in Jakarta on Wednesday, adding that the company had used a small part of Citigroup’s credit facility.
Thomas said a number of foreign and domestic banks would continue to provide funds for Indofood subsidiary PT Salim Ivomas despite the withdrawal of Citigroup.
According to Indofood’s June 2019 financial statement, Indofood has received loans from Japanese lender MUFG Bank, Dutch lender Rabobank as well as private lenders Bank Tabungan Pensiunan Negara (BTPN), Bank Central Asia (BCA) and state-owned Bank Mandiri.
Citigroup announced in June that it was canceling its credit facility worth US$140 million for Indofood after PT Salim Ivomas Pratama (SIMP) withdrew from the international palm oil certification scheme, the Roundtable on Sustainable Palm Oil (RSPO), in January last year.
The withdrawal came after SIMP disagreed with the certification organization’s investigation of its subsidiary, publicly listed palm oil producer PT PP London Sumatra (Lonsum), over alleged labor rights violations on its plantations. The RSPO suspended the firm’s sustainability certificate.
