August 26, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

It was in January 2020 that Olam International and its subsidiaries announced a re-organization of the business to create two distinct operating groups: Olam Food Ingredients (OFI), and Olam Global Agri (OGA).

The plan was launched following a thorough review and evaluation, and a determination that such a move would maximize Olam’s long-term shareholder value. And as consumer tastes and preferences shift, the move would also serve to streamline the business, making it more nimble, and able to keep pace with market trends, in-turn, making it more attractive to new capital investors. 

“One of the reasons that we are doing this exercise of reorganizing is to make sure that we can focus and simplify a fairly diverse complex portfolio,” Sunny Verghese, co-founder and CEO of Olam, told Reuters. 

As an extension of this plan, Olam has announced its intentions to seek a primary listing on the premium segment of the London Stock Exchange for OFI in H1 2022, with a goal of raising approximately $2.8 billion.

The Singapore-based company also announced that OFI will then pursue a second listing on the Singapore exchange.

“The decision to pursue a stock market listing is a major milestone for OFI and we are looking forward to presenting this exciting opportunity to investors globally through a proposed primary listing in London and a concurrent secondary listing in Singapore,” said A. Shekhar, CEO, OFI.

“The primary listing on the LSE will give us access to London’s large and diverse investor base, with its deep and liquid capital markets, and enable us to benefit from its strong understanding of and research coverage across the food and beverage sector,” continued Shekhar. “The concurrent listing in Singapore will also enable us to retain our strong local shareholder base and further tap into growing investor appetite in Asia.”

OFI works with some of the world’s best-known food and beverage brands, manufacturers, retailers, and food service outlets, establishing for itself market-leading positions across a range of on-trend natural, innovative, sustainable, and plant-based product lines.

Along this course, the business has laid down deep roots in the countries from where it sources its raw materials for its coffee, cocoa, diary, nuts, and spice. Today, OFI has operations in 48 countries across America, Africa, Europe, and Asia, sourcing directly and indirectly from about 2.6 million farmers. These supply lines incorporate a focus on sustainability and traceability into OFI’s unique, globally scaled business model that includes more than 100 manufacturing plants.

The benefits of the reorganization are reflected in OFI’s result for 2020 – generating annual revenue of $9.1 billion and EBIT of $6 billion. Olam’s 2021 interim results announced on August 13 demonstrate a continuing of the businesses’ strength and resilience during H1 when the company posted that its first-half operational profits more than doubled to a record-breaking $321.5 million. 

Shekhar commented, “The results reported today show that OFI is a strong business uniquely positioned to take advantage of long-term consumer trends within the food and beverage industry. Our integrated global network, servicing large, attractive and growing end-use categories within an expanding on-trend ingredients portfolio, makes us a compelling investment for anyone looking to tap into growing global demand for food that is healthier, traceable and sustainable.”

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.