Olam International
Encyclopedia
Olam International Limited is a leading global integrated supply chain manager and processor of agricultural products and food ingredients, sourcing 20 products with a direct presence in 65 countries and supplying them to over 11,000 customers.
With direct sourcing and processing in most major producing countries for various products, Olam has built a global leadership position in many businesses, including cocoa, coffee, cashew, sesame, rice, cotton and wood products.
Headquartered in Singapore and listed on the SGX-ST in 2005, Olam currently ranks among the top 40 largest listed companies in Singapore in terms of market capitalisation and is a component stock in the Straits Times Index (STI), MSCI Singapore Free, S&P Agribusiness Index and the DAXglobal Agribusiness Index.
Since its establishment in 1989, Olam has remained in a single commodity asset class – the agricultural complex. Olam have grown by taking advantage of adjacent opportunities in the agricultural complex and has evolved from a single-product, single-country company in 1989, to a multi-product, multi-national, integrated supply chain manager today.
The history and development can be categorised into the following distinct phases:
The Formative Years: 1989 to 1992
In 1989, the Kewalram Chanrai Group established Olam Nigeria Plc to set up a non-oil based export operation out of Nigeria to secure hard currency earnings to meet the foreign exchange requirements of the other Group Companies operating in Nigeria. The success of this operation resulted in Olam establishing an independent export operation and sourcing and exporting other agricultural products not related to the Group.
The Group's agribusiness was headquartered in London and operated under the name of Chanrai International Limited. The business began with the export of cashews from Nigeria and then expanded into exports of cotton, cocoa and sheanuts from Nigeria. This enabled Olam to develop its origination capabilities and expertise in the sourcing, processing and marketing of agricultural products. During this phase its business was a single-country, multiple-product operation.
Business Model Development: 1993 to 1995
By the start of 1993, Olam recognised patterns and similarities in the sourcing, storing, transporting and marketing of these agricultural products, in the skills and capabilities required to participate in these businesses and the tools and techniques required to manage the particular risks inherent across these product markets.
Olam saw it as the opportunity to transfer these skills and competencies across geographic boundaries into other developing countries and across product boundaries to other adjacent products. Between 1993 and 1995, the business grew from a single-country operation into multiple origins, first within West Africa (including Benin, Togo, Ghana, Cote d'Ivoire, Burkina Faso, Senegal, Guinea Bissau, Cameroon and Gabon), and then to East Africa (Tanzania, Kenya, Uganda, Mozambique and Madagascar) and then India. The move into multiple origin countries coincided with the deregulation of the agricultural commodity markets.
Olam International Limited was incorporated in Singapore on 4 July 1995 under the Company's Act as a public limited company. In 1996, at the invitation of the Singapore Trade Development Board (now International Enterprise Singapore), Olam relocated their entire operations from London to Singapore. Furthermore, the Singapore Government awarded Olam the Approved International Trader status (now called the Global Trader Programme) under which Olam was granted a concessionary tax rate of 10%, which was subsequently reduced, in 2004, to 5%. On relocation to Singapore, the Group's agri-business was reorganised to be wholly owned by Olam International Limited in Singapore.
During this phase, Olam established sourcing and marketing operations in Indonesia, Vietnam, Thailand, China, Papua New Guinea, Middle East, Central Asia and Brazil.
Rapid Expansion, Private Equity and IPO: 2002 to 2005
In 2002, Russell AIF Singapore Investments Limited (managed by AIF Capital limited), became the first external investor to take an equity stake in the company. In 2003, Temasek Holdings, through its wholly owned subsidiary, Seletar Investments, took a stake in Olam, followed by International Finance Corporation (IFC).
2005 marked a key point in Olam’s history. After nearly a decade as a highly successful private company, Olam International Limited was listed on the Main Board of the Singapore Exchange on 11 February 2005. The Kewalram Chanrai Group today has a 23% stake in the company while Temasek made a strategic investment in Olam in 2009 and now holds close to 14% of Olam. The Management Team of Olam has a significant shareholding in the company approximating 11% in the total issued share capital, which greatly aligns shareholder and management interests in creating value. Olam's free float owned by public shareholders accounts for approximately 53% of the total issued share capital.
Concurrently, Olam continued to expand its global footprint in the Middle East, North and South America, Eastern Europe and Russia.
Building a Global Leader: 2006 to Present
Olam today is active in the supply chain management of agricultural products and food ingredients. With operations across more than 60 countries, Olam source 20 products from over 45 origin countries and market them to over 11,000 customers with a global employee strength of more than 17,000 employees.
There are approximately 1.5 million farmers involved in over 110 Initiatives spanning 30 countries around the world with the aim being to
link small-scale farmers to the global supply chain - improving economic prosperity and social welfare.
2011 Corporate Responsibility and Sustainability Report
or Vietnam
for raw processing. Olam too was initially exporting cashew from Nigeria
to India. From Nigeria, it went into other key producing countries in West Africa like Cote d'Ivoire
, Burkina Faso
, Mali
, Guinea Bissau and East Africa
, including Tanzania
, Mozambique
, Kenya
and Madagascar
, and finally expanded into Vietnam and Indonesia
. It then expanded down the processing value chain by processing raw cashew nuts that it sourced from these origins into blanched kernels, first in India, then Vietnam and then Brazil.
It is now scaling the cashew processing in the raw nut origins and have built a scalable model for this in Tanzania, Mozambique, Cote d’Ivoire and Nigeria. For instance, in Tanzania, with the help of the Government and funded by USAID, Olam along with Technoserve
, is participating in activities to improve productivity of small farmers and increase yields and incomes in rural areas.
With direct sourcing and processing in most major producing countries for various products, Olam has built a global leadership position in many businesses, including cocoa, coffee, cashew, sesame, rice, cotton and wood products.
Headquartered in Singapore and listed on the SGX-ST in 2005, Olam currently ranks among the top 40 largest listed companies in Singapore in terms of market capitalisation and is a component stock in the Straits Times Index (STI), MSCI Singapore Free, S&P Agribusiness Index and the DAXglobal Agribusiness Index.
Salient Features
- Global leader in 8 out of the 14 product platforms in its portfolio
- World’s largest supplier of cashew, robusta coffee and sesame
- Amongst the top 3 suppliers in cocoa, rice and spices
- Amongst the top 5 suppliers in peanutsPeanutsPeanuts is a syndicated daily and Sunday American comic strip written and illustrated by Charles M. Schulz, which ran from October 2, 1950, to February 13, 2000, continuing in reruns afterward...
, cotton and tropical hardwoods
Heritage
Since its establishment in 1989, Olam has remained in a single commodity asset class – the agricultural complex. Olam have grown by taking advantage of adjacent opportunities in the agricultural complex and has evolved from a single-product, single-country company in 1989, to a multi-product, multi-national, integrated supply chain manager today.
The history and development can be categorised into the following distinct phases:
The Formative Years: 1989 to 1992
In 1989, the Kewalram Chanrai Group established Olam Nigeria Plc to set up a non-oil based export operation out of Nigeria to secure hard currency earnings to meet the foreign exchange requirements of the other Group Companies operating in Nigeria. The success of this operation resulted in Olam establishing an independent export operation and sourcing and exporting other agricultural products not related to the Group.
The Group's agribusiness was headquartered in London and operated under the name of Chanrai International Limited. The business began with the export of cashews from Nigeria and then expanded into exports of cotton, cocoa and sheanuts from Nigeria. This enabled Olam to develop its origination capabilities and expertise in the sourcing, processing and marketing of agricultural products. During this phase its business was a single-country, multiple-product operation.
Business Model Development: 1993 to 1995
By the start of 1993, Olam recognised patterns and similarities in the sourcing, storing, transporting and marketing of these agricultural products, in the skills and capabilities required to participate in these businesses and the tools and techniques required to manage the particular risks inherent across these product markets.
Olam saw it as the opportunity to transfer these skills and competencies across geographic boundaries into other developing countries and across product boundaries to other adjacent products. Between 1993 and 1995, the business grew from a single-country operation into multiple origins, first within West Africa (including Benin, Togo, Ghana, Cote d'Ivoire, Burkina Faso, Senegal, Guinea Bissau, Cameroon and Gabon), and then to East Africa (Tanzania, Kenya, Uganda, Mozambique and Madagascar) and then India. The move into multiple origin countries coincided with the deregulation of the agricultural commodity markets.
Olam International Limited was incorporated in Singapore on 4 July 1995 under the Company's Act as a public limited company. In 1996, at the invitation of the Singapore Trade Development Board (now International Enterprise Singapore), Olam relocated their entire operations from London to Singapore. Furthermore, the Singapore Government awarded Olam the Approved International Trader status (now called the Global Trader Programme) under which Olam was granted a concessionary tax rate of 10%, which was subsequently reduced, in 2004, to 5%. On relocation to Singapore, the Group's agri-business was reorganised to be wholly owned by Olam International Limited in Singapore.
During this phase, Olam established sourcing and marketing operations in Indonesia, Vietnam, Thailand, China, Papua New Guinea, Middle East, Central Asia and Brazil.
Rapid Expansion, Private Equity and IPO: 2002 to 2005
In 2002, Russell AIF Singapore Investments Limited (managed by AIF Capital limited), became the first external investor to take an equity stake in the company. In 2003, Temasek Holdings, through its wholly owned subsidiary, Seletar Investments, took a stake in Olam, followed by International Finance Corporation (IFC).
2005 marked a key point in Olam’s history. After nearly a decade as a highly successful private company, Olam International Limited was listed on the Main Board of the Singapore Exchange on 11 February 2005. The Kewalram Chanrai Group today has a 23% stake in the company while Temasek made a strategic investment in Olam in 2009 and now holds close to 14% of Olam. The Management Team of Olam has a significant shareholding in the company approximating 11% in the total issued share capital, which greatly aligns shareholder and management interests in creating value. Olam's free float owned by public shareholders accounts for approximately 53% of the total issued share capital.
Concurrently, Olam continued to expand its global footprint in the Middle East, North and South America, Eastern Europe and Russia.
Building a Global Leader: 2006 to Present
Olam today is active in the supply chain management of agricultural products and food ingredients. With operations across more than 60 countries, Olam source 20 products from over 45 origin countries and market them to over 11,000 customers with a global employee strength of more than 17,000 employees.
Unlocking Mutual Value - Corporate Responsibility and Sustainability
In 2011 Olam launched the Olam Livelihood Charter with the goal of ‘unlocking mutual value’ in the communities in which it operates.There are approximately 1.5 million farmers involved in over 110 Initiatives spanning 30 countries around the world with the aim being to
link small-scale farmers to the global supply chain - improving economic prosperity and social welfare.
2011 Corporate Responsibility and Sustainability Report
Activities in African countries
Though an estimated one-third of world's raw cashew nuts are being produced in Africa, 80% of this is being exported to IndiaIndia
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
or Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
for raw processing. Olam too was initially exporting cashew from Nigeria
Nigeria
Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
to India. From Nigeria, it went into other key producing countries in West Africa like Cote d'Ivoire
Côte d'Ivoire
The Republic of Côte d'Ivoire or Ivory Coast is a country in West Africa. It has an area of , and borders the countries Liberia, Guinea, Mali, Burkina Faso and Ghana; its southern boundary is along the Gulf of Guinea. The country's population was 15,366,672 in 1998 and was estimated to be...
, Burkina Faso
Burkina Faso
Burkina Faso – also known by its short-form name Burkina – is a landlocked country in west Africa. It is surrounded by six countries: Mali to the north, Niger to the east, Benin to the southeast, Togo and Ghana to the south, and Côte d'Ivoire to the southwest.Its size is with an estimated...
, Mali
Mali
Mali , officially the Republic of Mali , is a landlocked country in Western Africa. Mali borders Algeria on the north, Niger on the east, Burkina Faso and the Côte d'Ivoire on the south, Guinea on the south-west, and Senegal and Mauritania on the west. Its size is just over 1,240,000 km² with...
, Guinea Bissau and East Africa
East Africa
East Africa or Eastern Africa is the easterly region of the African continent, variably defined by geography or geopolitics. In the UN scheme of geographic regions, 19 territories constitute Eastern Africa:...
, including Tanzania
Tanzania
The United Republic of Tanzania is a country in East Africa bordered by Kenya and Uganda to the north, Rwanda, Burundi, and the Democratic Republic of the Congo to the west, and Zambia, Malawi, and Mozambique to the south. The country's eastern borders lie on the Indian Ocean.Tanzania is a state...
, Mozambique
Mozambique
Mozambique, officially the Republic of Mozambique , is a country in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west and Swaziland and South Africa to the southwest...
, Kenya
Kenya
Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...
and Madagascar
Madagascar
The Republic of Madagascar is an island country located in the Indian Ocean off the southeastern coast of Africa...
, and finally expanded into Vietnam and Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
. It then expanded down the processing value chain by processing raw cashew nuts that it sourced from these origins into blanched kernels, first in India, then Vietnam and then Brazil.
It is now scaling the cashew processing in the raw nut origins and have built a scalable model for this in Tanzania, Mozambique, Cote d’Ivoire and Nigeria. For instance, in Tanzania, with the help of the Government and funded by USAID, Olam along with Technoserve
TechnoServe
TechnoServe is a non-governmental organisation based in Washington, DC which helps entrepreneurial men and women in poor areas of the developing world to build businesses that create income, opportunity and economic growth for their families, their communities and their...
, is participating in activities to improve productivity of small farmers and increase yields and incomes in rural areas.
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