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Olam Creates Ingredients and Agribusiness Groups
January 21, 2020
3 Min Read
Food and agribusiness firm Olam International is reorganizing its business portfolio with the creation of two operating groups, Olam Food Ingredients (OFI) and Olam Global Agri (OGA), in an effort to create long-term value and take advantage of growth opportunities, the company announced Monday.
“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 capitalize on key market trends, while continuing to leverage the benefits of the Olam Group,” the group’s co-founder and chief executive officer, Sunny Verghese, said in a statement. “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 maximize the value of our business.”
OFI includes the firm’s cocoa, coffee, edible nuts, spices, and dairy businesses. The newly formed unit supplies sustainable, natural, value-added food products and ingredients. Serving African and Asian countries, Olam’s OGA group encompasses its grains and animal feed, edible oils, rice, cotton, and commodity financial services businesses.
Olam’s Group Chief Operating Officer, A Shekhar, was named as OFI’s CEO. Verghese will remain in his role as Group CEO, but he is also slated to become CEO of OGA and Olam International.
“The board of directors, building in part on the recommendation from the two independent financial advisors, believes that the re-organization will enable each operating group to pursue its own vision, take advantage of new market opportunities, optimize resources, and attract new talent,” the chair of Olam’s board, Lim Ah Doo, said in the release. “The board has every confidence that this significant step forward will allow the company to strengthen and capitalize on its strong foundation to achieve higher growth and value creation, which we believe will be welcomed by our shareholders.”
In late 2019, Powder & Bulk Solids reported that Olam entered into an agreement with investment management firm Mesirow Financial to sell the real estate assets of its onion and garlic processing facility in Gilroy, CA. The company is also presently in the midst of conversations on selling or restructuring other assets and businesses it owns according to its strategic plan.
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