Bloomberg News

Former Coca-Cola Sugar Buyer Robbins Eyes Agriculture Assets

February 13, 2014

Emeterra, an agribusiness company founded by a former managing director of global sweeteners at Coca-Cola Co. (KO:US), is investing in agriculture processing assets through new projects and acquisitions.

The Singapore-based company started by Jacob Robbins, who left Coca-Cola last year, has been operating since Nov. 1 and is looking at processing assets, Robbins said in a Feb. 10 interview in Dubai. Potential projects probably will be in Southeast Asia, sub-Saharan Africa and Latin America, excluding Brazil for now, he said.

“Our first assets should come on stream within 18 to 24 months, to be in physical production, which is not only the time that it takes to build a facility, but also all the lead time to get clearances and approvals and everything else,” Robbins said. “We are looking at domestic assets in a number of countries right now, some green fields, some brown fields.”

Emeterra will focus on trading and supplying sweeteners including new sugar products and non-nutritive zero-calorie offerings other than stevia, a sugar substitute, Robbins said. The company will also trade dairy and juices other than orange. The world will need to produce 60 percent more food by 2050 to feed a growing population, the United Nations’ Food & Agriculture Organization estimates. Chinese imports of whole-milk powder surged 14-fold since 2008, data from the U.S. Department of Agriculture showed.

“Dairy is an amazing opportunity because of the intrinsic deficit for China and Asia Pacific,” Robbins said. “There’s such a huge gap between what’s being produced and what is needed and more importantly what will be needed.”

Sustainable Development

Emeterra will also invest in technologies to boost sustainable agricultural development as well as reduce costs, Robbins said. The company’s first venture will involve rapid multiplication of sugar-cane seedlings, which is the biggest cost in growing the crop after fertilizers, according to a study from the London-based International Sugar Organization. The ISO seed cane price index rose 95 percent from 2005 to 2010.

“If you look at the evolution of the whole sugar industry in the last 20, 30, 40 years, what can you call as really radical innovation?” Robbins said. “I think the time is here for radical innovations because today, with all the pressure that there is on prices, there’s only so much you can do for price realization, so you have to look at costs.”

Raw sugar futures traded in New York fell in the past three years as supplies outpaced demand. That was the longest slump in more than two decades. A fourth year of price declines would be the longest losing streak since at least 1965, exchange data on Bloomberg showed. Futures slid 1.4 percent this year.

Cut Costs

Sugar cane is traditionally planted by putting segments on the ground, which allows pests and diseases to be perpetuated, Robbins said. The rapid seedling multiplication process will cut costs for growers, interrupt the cycle of pests and diseases and require much less water, making businesses more sustainable.

“There’s more traction with the consumer when you have a sustainable product provided you can do it at cost parity or better cost,” Robbins said. “There’s no question in my mind that there’s the need for sustainable food, especially in emerging markets. That’s a given.”

Emeterra is also advising Olympus Capital Asia, an independent private equity firm investing in agribusiness, clean energy and financial services, according to Robbins.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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