Olam International

Olam International Limited

Type	Public company
Traded as	SGX: O32
Industry	Food processing
Founded	Singapore (July 1995 (1995-07))
Headquarters	Singapore
Key people	R. Jayachandran (Chairman) Sunny George Verghese (CEO)
Revenue	S$19,421.8 million (2014)[1]
Operating income	S$1,168.8 million (2014)[1]
Net income	S$641.272 million (2014)[1]
Total assets	S$16,306.593 million (2014)[1]
Total equity	S$4,222,328 million (2014)[1]
Number of employees	23,000 (2014)[1]
Website	olamgroup.com

Olam International Limited is a global integrated supply chain manager, processor and trader of soft commodities, supplying products across 16 platforms to 13,800 customers worldwide.

History

Since its establishment, the firm has evolved from a single-product, single-country company in 1989, to a multi-product, multi-national, integrated supply chain manager today.

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.

Move to Singapore

By the start of 1993, Olam recognised patterns and similarities in the skills and capabilities required to participate in agricultural production and distribution in many different product markets. Between 1993 and 1995, the business grew from a single operation into multiple origins, first within West Africa (including Benin, Togo, Ghana, Côte 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 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.

IPO

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 14.6% stake in the company while Temasek made a strategic investment in Olam in 2009. As of December 2014, following a Voluntary General Offer^[2] it holds close to 58.4% of Olam.^[3]

The Management Team of Olam has a significant shareholding in the company approximating 7.2%^[4] 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 19.8% of the total issued share capital.^[3]

Post IPO

Olam is active in the supply chain management of agricultural raw materials and food ingredients. With operations across more than 60 countries, Olam supplies 44 products and markets them to over 13,800 customers with a global employee strength of 23,000.^[5]

In 2010, Olam International discussed a possible merger with one of its main competitors, i.e. the Geneva based Louis Dreyfus Commodities, the world's largest cotton and rice trading company. This idea was given-up early 2011, as the two parties could not find an agreement on the details of such a potential merger.

Olam announced in July 2013 that it would sell its cotton assets in Zimbabwe, with the preferred buyer being a private equity company.^[6]

Muddy Waters allegations

In November 2012, Carson Block of Muddy Waters Research accused Olam of "deciding to take huge leverage and invest in illiquid positions",^[7] questioning its accounting practices and accusing its board of an "abject failure of leadership".^[8] Olam called the allegations "baseless rumour-mongering" and sued Block for libel,^[9][10] but its shares nevertheless fell 21%.^[7]

..

See also

• Commodity markets

References

External links

• Olam Corporate Website
• Olam's activities in Tanzania
• Olam's problems in Guinea-Bissau

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