Louis Dreyfus Company (LDC), a major global agricultural commodity trader, has formed a joint venture (JV) with Instanta to build and operate a freeze-dried instant coffee plant in Vietnam, the world’s 2nd largest coffee producer and exporter after Brazil.
LDC has signed the JV agreement with Instanta to build the facility in Binh Duong province, which is part of Vietnam Southern Key Economic Region.
The joint venture (JV) is named ILD Coffee Vietnam with plant construction expected to commence in 1st half 2022. It will complement LDC strong existing Vietnamese footprint and global robusta green coffee business, enlarging its coffee product offering to customers while addressing growing instant coffee demand and premiumisation, said Julien Terrisse, LDC head of instant coffee.
Vietnam is 2nd only to Brazil in producing and exporting coffee, however it is the leader in supplying robusta coffee. Vietnam recorded on average US$2.25 billion annually from coffee export revenue.
Meanwhile, Instanta operates a coffee plant named Instanta Vietnam in the northern port city of Hai Phong. The Polish group runs 7 coffee factories in Poland, Russia, Turkey, Colombia and Vietnam.
LDC belongs to the ABCD quartet of companies which lead world agricultural commodity trading, with the other 3 being Archer Daniels Midland (ADM), Bunge, and Cargill.
This latest transaction represents another positive step in LDC strategy to pursue greater vertical integration and diversify revenue through value-added products.