Silvermill to Set Up Coconut Factory in Central Sulawesi

Indonesia is the world’s second largest producer of coconuts. Central Sulawesi is part of the BIMP-EAGA subregion, where coconut is one of the five priority agricultural commodities for supply and value chain development. 

Silvermill is one of Sri Lanka’s largest manufacturers and exporters of coconut-based products. Its subsidiary PT SASL and Sons Indonesia (PTSASL) has signed a $5 million financing facility with the Asian Development Bank (ADB) to fund the group’s expansion in Indonesia.

“Indonesia’s coconut industry has huge potential to become a high-performing, high value-adding sector of the economy,” said Carine Donges, agribusiness investment specialist at ADB, in a news release. “Silvermill’s expansion to Indonesia will allow the group to tap into a much larger supply of coconut resource, while directly improving livelihoods of thousands of rural households in Central Sulawesi.”

Enhancing the coconut value chain

The ensuing integrated coconut value chain is expected to benefit about 9,500 smallholder coconut farmers and create jobs for more than 1,200 people in Central Sulawesi, more than half of them for women.

At full operational capacity, the new processing plant will procure over 100 million coconuts annually. It will provide a stable source of income to local coconut farmers at a premium compared to the traditional offtake from manufacturers of copra—the dried kernel of the coconut. The new plant is expected to produce over 9,400 metric tons per year of desiccated coconut—high-nutrition dried and shredded coconut kernel mainly used for cooking and baking—and has a capacity to produce over 2,500 metric tons of virgin coconut oil per year.

PTSASL is a limited liability company established in Indonesia in 2017 to manufacture coconut-based products for export. It is wholly owned by Silvermill.

Silvermill’s Group CEO Suresh Silva said the processing plant supports the group’s multi-sourcing strategy to mitigate climate risks.