28 January 2019 | News
Olam’s operations extend across the value chain, including buying from an extended network of 4.7 million farmers, managing orchards, plantations and farms, processing and ingredients innovation
Global food and agri-business Olam International has announced its 2019-2024 strategic plan that capitalises on key trends shaping the sector. Driven by consumers and advances in technology, these trends include increasing demand for healthier foods, traceable and sustainable sourcing, e-commerce and the rise of “purpose” brands.
Olam plans to invest US$3.5 billion (including maintenance capex) to strengthen businesses with high growth potential, while releasing US$1.6 billion by responsibly divesting certain businesses and assets lying outside the strategic priorities over the course of this plan.
According to company statement, “Olam has already established global leadership positions in multiple specialty agri-products and food ingredients, with defensible strategies for more mainstream bulk products. Olam’s operations extend across the value chain, including buying from an extended network of 4.7 million farmers, managing orchards, plantations and farms, processing and ingredients innovation. This new strategy builds on the current business model which has yielded strong results and growth across Olam’s diversified portfolio.”
Sunny Verghese, Co-Founder and Group CEO said, “With our focus on farm-gate origination, end-to-end traceability, sustainability, digital initiatives and innovations like AtSource1, Olam is already primed to start capturing growth from this fast-changing landscape. Now, following a comprehensive review, our strategy is fully focused on harnessing these health and ethical sourcing trends, as well as changing consumer preferences. Crucially, our strategy will allow us to play a leading role in re-imagining global food and agri-supply chains for the better – sourcing raw materials within the earth’s capacity to regenerate and transforming those materials to deliver food, feed and fibre for a growing population.”
Lim Ah Doo, Chairman of the Board added, “The Board fully endorses this strategic plan that builds on Olam’s existing capabilities and sets a strong foundation for future growth. In addition, the Company is in the process of appointing financial advisors to explore various options to maximise value for shareholders. This exercise is expected to be completed by Q4 2019.”
The strategy sets out four pathways for growth:
Olam has identified four enablers to execute these strategic pathways: