Trader Mitsui expanding sugar business in growing Southeast Asian market
SINGAPORE, NNA - Major Japanese trading house Mitsui & Co. is expanding its sugar business in Southeast Asia to capitalize on a “period of growth in sugar consumption” in the region, where demand for sweet foods and drinks is increasing in many countries.
The company will target demand mainly in Thailand and Singapore where it has production and marketing subsidiaries, aiming to raise revenue from its sugar business in the region by up to 1.6 times over the next three years to 55 billion yen ($509 million).
In Thailand, the Japanese group has been mainly engaged in production of raw and refined sugar for professional use and is now shifting its focus to refined sugar with higher added value and quality. Mitsui and its affiliate Mitsui Sugar Co. have stakes in three local sugar producers with a combined annual output of 800,000 tons of raw and refined sugar, the fifth largest in Thailand.
In Singapore, the group will expand its retail sales by drawing on its acquisition of the leading local sugar processing and marketing company, SIS ’88 Pte. Ltd. last September. It will strengthen sales in neighboring countries as well as introduce functional sweeteners into markets that are increasingly health-conscious.
According to independent research by the trading house, the world’s sugar market is projected to expand by an average 2 percent every year between 2015 and 2025. By region, the growth in Asia is the largest at 2.8 percent and it had the largest market share of more than 40 percent in 2017. In Southeast Asia alone, the growth rate stands at 3 to 4 percent.
On the other hand, sugar consumption in Japan is declining by an average 1 percent every year amid a shrinking population and a shift away from sweets among consumers, prompting the Mitsui group to actively invest in its sugar business abroad to secure new sources of revenue, with the focus on the Southeast Asian market.
The Mitsui group aims to expand sales in its sugar business in Southeast Asia from the current 35 billion yen to a maximum 55 billion yen in three years – from 20 billion yen to 25 to 30 billion yen in Thailand and from 15 billion yen to 20 to 25 billion yen in Singapore – and hopes to “become a top-three sugar business in Asia,” according to Hirotaka Takeishi, an official in charge of the sugar business at Mitsui.