Olam International restructures into two business units

Global food and agri-business Olam International has confirmed plans to re-organise its business portfolio to create two new distinct operating groups for the company.

This will include Olam Food Ingredients (OFI), offering sustainable, natural, value-added food products and ingredients so that consumers can enjoy the healthy and indulgent products they love. It consists of Olam’s industry-leading businesses of Cocoa, Coffee, Edible Nuts, Spices and Dairy. OFI has built a unique global value chain presence including its own farms, farm-gate origination and manufacturing facilities.

OFI partners with customers, leveraging its complementary and differentiated portfolio of “on-trend” food products, to co-create solutions that anticipate and meet changing consumer preferences as demand increases for healthier food that is traceable and sustainable.

Secondly, Olam Global Agri (OGA) is a leading player in high-growth Asian and African countries supplying food, feed and fibre to meet rising demand and a shift to protein-based diets.

OGA has built proprietary operating capabilities including significant strengths in global origination, processing, trading, logistics, distribution, farming and risk management, and a key understanding of the market via on-the-ground presence in emerging regions over the past 30 years.

The plan will enable the company to explore options to maximise its long-term value via potential carve-out and capital raising options, including IPO listing for OFI and OGA.

Olam International (OIL), as the parent company of OFI and OGA, will play a key role in unlocking the full value of the Olam Group by providing stewardship to the new operating groups and accelerating growth.

As a steward, Olam will ensure the continuity of the “Olam Way”, including its unique entrepreneurial culture, implement cross-cutting initiatives such as AtSource, and drive key enablers such as Sustainability, Operational Excellence and Digital Transformation. It will also offer shared services to OFI and OGA to optimise synergies.

As an accelerator, Olam will nurture gestating businesses to full potential, including Packaged Foods, Infrastructure & Logistics and Olam Palm Gabon, as well as incubate new engines for future growth. In addition, it will manage the responsible divestment of non-core assets and businesses identified in the Strategic Plan and redeploy capital for further growth.

Mr. A Shekhar has been appointed as the CEO of OFI and will therefore step down from his current role as Group Chief Operating Officer of Olam with immediate effect. Mr. Sunny Verghese will hold charge as CEO of OGA and Olam International, in addition to continuing as Group CEO.

Explaining the rationale, Co-Founder and Group CEO, Sunny Verghese (pictured), said: “Over the past 30 years, Olam has built a valuable portfolio of businesses that have achieved leadership positions. By simplifying our businesses across two distinct and coherent groups, each with a clear vision for profitable growth, it sharpens our focus and provides opportunities to capitalise on key market trends, while continuing to leverage the benefits of the Olam Group.

“We believe this will enable us to explore potential carve outs and IPOs in a sequential manner and attract additional investors who are aligned with the vision of these two new groups in order to maximise the value of our business.”

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