Olam International is to re-organise its business portfolio to create two new operating groups that it believes will be well-placed for growth, in line with key consumer trends and market opportunities.
The first of the two groups will be Olam Food Ingredients (OFI), which will specialise in value-added food products and ingredients. It consists of Olam’s cocoa, coffee, edible nuts, spices and dairy segments.
The second operating group, Olam Global Agri (OGA), aims to be a leading player in high-growth Asian and African countries, supplying food, feed and fibre to meet rising demand and a shift to protein-based diets.
This group includes the differentiated businesses of grains and animal feed, edible oils, rice, cotton and commodity financial services. OGA has built proprietary operating capabilities including significant strengths in global origination, processing, trading, logistics, distribution, farming and risk management.
The company said the plan will enable it to explore options to maximise Olam’s long-term value over and above the options laid out in its strategic plan. These options include potential carve-outs and capital raising options, including an IPO listing for OFI and OGA.
A Shekhar has been appointed as the CEO of OFI and will step down from his current role as Group Chief Operating Officer of Olam.
Sunny Verghese will be CEO of OGA and Olam International, in addition to continuing as Group CEO.
Mr 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.”