SINGAPORE – Global food and agri-business comapany, Olam International has re-organised its diverse business portfolio into two new operating groups; Olam Food Ingredients and Olam Global Agri.
Olam’s operations will now focus on food ingredients and global agri-business as part of the company’s strategy to reposition the business for further growth in line with key consumer trends and market opportunities.
The Olam Food Ingredients (OFI) unit will consist of Olam’s businesses of cocoa, coffee, edible nuts, spices and dairy and will offer value-added food products and ingredients.
Olam claims that the food ingredients business has built a unique global value chain presence including its own farms, farm-gate origination and manufacturing facilities to help the business meet changing consumer preferences.
The company has appointed its Chief Operating Officer, Mr. A Shekhar as the CEO of OFI and will therefore step down from his current role with effect January 20, 2020.
The Olam Global Agri (OGA) will include the differentiated businesses of grains and animal feed, edible oils, rice, cotton and commodity financial services.
The division will continue to biuld on Olam’s strengths in high-growth Asian and African countries supplying food, feed and fibre to meet rising demand and a shift to protein-based diets.
OGA will be led by Sunny Verghese as CEO in addition to continuing as CEO of Olam International.
Olam says that this “bold plan” will enable the it to explore options to maximise the company’s long-term value over and above the Strategic Plan via potential carve-out and capital raising options, including IPO listing for OFI and OGA.
Olam International, 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.
Explaining the rationale, Co-Founder and Group CEO, Sunny Verghese 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.”
Chairman of the Board, Lim Ah Doo added: “The Board of Directors, building in part on the recommendation from the two independent financial advisors, believes that the re-organisation will enable each operating group to pursue its own vision, take advantage of new market opportunities, optimise resources and attract new talent.
“The Board has every confidence that this significant step forward will allow the Company to strengthen and capitalise on its strong foundation to achieve higher growth and value creation, which we believe will be welcomed by our stakeholders.”
As the re-organisation progresses, the company said that it will provide periodic updates on the process and related developments, including changes in operational and financial reporting in line with the new structure.