Olam International

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Olam International
Type Public (SGX: O32)
Founded 1989
Headquarters Singapore
Key people Sunny Verghese, Group MD and CEO
Industry Supply Chain Management of agricultural commodities [1]
Revenue ▲ $4.36 billion SGD (2006) of Sales
Net income ▲ $87 million (2006)
Employees 7,500 (2007) [2]
Website www.olamonline.com

Olam International (SGX: o32) is a leading global integrated supply chain manager of agricultural products and food ingredients, sourcing 17 products with a direct presence in over 56 countries and supplying them to over 3,800 customers in more than 55 destination markets.

Olam has become one of the leading traders of agricultural commodities such as cocoa, coffee, cashew, sesame, rice and teak. Headquartered in Singapore, it went public in February, 2005 and ranks among the top 40 largest listed companies in Singapore in terms of market capitalization.

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[edit] Salient Features

  • 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 peanuts, cotton and tropical hardwoods==

[edit] Logistics

Olam International is currently sourcing its products globally (from over 40 producing countries) and marketing them globally (to over 3800 global customers in 55 end markets) through a global talent pool of 7500 employees drawn from 56 nationalities.

It is known for its ability to

  • cross source agricultural products that are seasonal in nature, all round the year giving us an advantaged cost position,
  • good quality field operating systems that help us control the integrity of stock, quality of the stock and supplier advances on a real time basis across distributed collection centers and,
  • good quality people who are willing to live and work in these remote areas and deliver the operational controls required for us to be successful.
  • work with African Governments in a public-private partnership to enable African countries to rise in the value chain by local processing of raw commodities.

[edit] 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 India 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.

The Guinea-Bissau government sought to please farmers before elections in 2006 by raising the price per kilogram of unprocessed cashews from the standard 250 CFA Franc to 350 CFA. But international traders refused to pay the higher price. Unable to sell their cashews, farmers could not buy rice, the country’s staple food. Eventually the price of cashews crashed with traders currently buying cashews for around 50 CFA a kilogram. Further, Olam and other international traders are also hobbled by a recent law that prohibits them from buying directly from the farmers. Many of the local businessmen they must go through are at the same time senior government officials. Olam shut down in the middle of last year’s season when the government decided that it had to pay an extra USD 2.4 million in taxes and confiscated 6,000kg of the cashews it had already bought.

[edit] Competitors

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[edit] External links