Case Study Wilmar

981 Words4 Pages
As Asia’s leading agribusiness group, Wilmar operated through a vertically integrated business model, encompassing the entire value chain of agricultural commodity processing business. Through scale, integration and logistics advantages, it was able to extract margins at each step of its value chain, reaping operational synergies and cost efficiencies. Having significant manufacturing facilities and extensive distribution networks in high growth Asian markets, it placed Wilmar in a good stead to diversify into other agribusiness or products. Going forward, Wilmar should increase the status quo with respect to its product diversification level. Predominantly focused on palm oil industry, it should expand its business operations by diversifying into other businesses. A possible option is to expand into sugar business and acquire Sucrogen, the largest producer of raw sugar in Australia. Having a diversified market portfolio by…show more content…
The availability of Sucrogen as a strategic acquisition target enabled Wilmar to replicate its entire sugar industry value chain to boost the group's growth and profitability in the long term. Leveraging Sucrogen’s existing infrastructure and expertise, it will help Wilmar to jumpstart its strategy to expand into the low-cost sugar business. An entrance to sugar business enabled Wilmar to possibly enter the global biofuel industry. There was a global trend of replacing fossil fuels with biofuels, driving its long term demand growth, which made the sugar industry attractive. Riding with biofuel demand, it can leverage this growth potential by increasing its sugar production and ethanol sales. With an increased focus on sustainability, Wilmar can learn and adapt Sucrogen’s sustainable agribusiness practices to reduce the adverse environmental impacts from its
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