Indonesia : High-Value Coconut Processing Project

Nonsovereign Project | 53313-001

PTSASL is wholly owned by the Silvermill Group one of Sri Lanka's largest manufacturers and exporters of coconut-based products since its establishment in 1920. Silvermill Group currently operates in 4 sectors Food Ingredients, Beverages & Liquids, Power & Energy and Industrial Solutions and caters to customers in all continents with over 60 products made to the highest quality standards.

PTSASL was set up in September 2017 in an effort to (i) expand and diversify the Group's coconut sourcing (different geographical/climatic zone) and (ii) benefit from lower cost-base for raw materials and boost the Group competitiveness for its flagship products (virgin coconut oil, desiccated coconut products and coconut water). PTSASL key asset consists of a manufacturing plant located near Luwuk, Sulawesi.

Project Details

  • Project Officer
    Donges, Carine Sophie
    Private Sector Operations Department
    Request for information
  • Approval Date
    20 December 2019
  • Country/Economy
    Indonesia
  • Sector
    • Agriculture, natural resources and rural development
Project Name High-Value Coconut Processing Project
Project Number 53313-001
Borrower / Company PT SASL and Sons Indonesia
Silvermill Investment Holdings (Private) Ltd
Country / Economy Indonesia
Location Luwuk
Type or Modality of Assistance
3887 Loan Ordinary capital resources USD 5.00 million Approved
Operational Priorities OP1: Addressing remaining poverty and reducing inequalities
OP2: Accelerating progress in gender equality
OP5: Promoting rural development and food security
OP7: Fostering regional cooperation and integration
Sector / Subsector

Agriculture, natural resources and rural development / Agro-industry, marketing, and trade
Gender Effective gender mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Office of the Director General, PSOD
Responsible ADB Officer Donges, Carine Sophie
Project Sponsor(s) Silvermill Investment Holdings (Private) Ltd
Description

PTSASL is wholly owned by the Silvermill Group one of Sri Lanka's largest manufacturers and exporters of coconut-based products since its establishment in 1920. Silvermill Group currently operates in 4 sectors Food Ingredients, Beverages & Liquids, Power & Energy and Industrial Solutions and caters to customers in all continents with over 60 products made to the highest quality standards.

PTSASL was set up in September 2017 in an effort to (i) expand and diversify the Group's coconut sourcing (different geographical/climatic zone) and (ii) benefit from lower cost-base for raw materials and boost the Group competitiveness for its flagship products (virgin coconut oil, desiccated coconut products and coconut water). PTSASL key asset consists of a manufacturing plant located near Luwuk, Sulawesi.
Objectives and Scope

The project will support Silvermill in financing its coconut processing plant and sourcing in Indonesia. Expanding in Indonesia (the second largest coconut producer in the world) will allow Silvermill to significantly scale up its operations by tapping into a much larger coconut

supply while also enabling the group to diversify its coconut supply risk away from Sri Lanka.

The project will support smallholder farmers in the remote rural area of Central Sulawesi. It will also contribute to developing a coconut agroindustry that meets international standards. The project will boost export by producing higher grades of coconut products for export mostly in the United States and in Europe.
Linkage to Country/Regional Strategy The project is consistent with Strategy 2030's Operational Plan for Priority 2 by accelerating progress in gender equality, and Operational Plan for Priority 5 to promote rural development and food security. The project is aligned with ADB's country partnership strategy for Indonesia, 2016 to 2019 to achieve higher, more inclusive, and environmentally sustainable growth.
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project is categorized as B for environment since the nature of the project is likely to have limited, site specific and no irreversible environmental impacts. PTSASL will (i) develop and implement an environmental and social management system (ESMS), (ii) abide by applicable national laws and regulations, and (iii) comply with the ADB Safeguard Policy Statement (2009).
Involuntary Resettlement In compliance with ADB's Safeguard Policy Statement (SPS, 2009), the project is classified as category C for involuntary resettlement. The land for the processing plant was obtained from a private owner through a willing buyer-willing seller arrangement. The land was historically used as a coconut plantation without any residential households. No land legacy issue was identified, and there is no need for additional land acquisition. Thus, the project will not entail any involuntary resettlement impact.
Indigenous Peoples In compliance with ADB's Safeguard Policy Statement (SPS, 2009), the project is classified as category C for Indigenous Peoples. No indigenous communities were identified in the project area. The land for the processing plant site is not communal land and was purchased from a private owner. Thus, the project will not entail any impact on indigenous peoples.
Stakeholder Communication, Participation, and Consultation PTSASL will develop a gender inclusive Stakeholder Engagement Plan commensurate with the nature and scale of the operations at the project site. The plan will include a communication plan with women and men in the community and suppliers, details on employee and contractor engagement, and grievance redress mechanisms.
Timetable for assistance design, processing and implementation
Concept Clearance 18 Oct 2019
Credit Committee Meeting 16 Dec 2019
Approval 20 Dec 2019
Last PDS Update 21 Apr 2021

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Title Document Type Document Date
High-Value Coconut Processing Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Dec 2019
High-Value Coconut Processing Project: FAST Report Faster Approach to Small Nonsovereign Transactions Dec 2019

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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