Jump to content

Olam International

From Wikipedia, the free encyclopedia

This is an old revision of this page, as edited by Lyg 2001 (talk | contribs) at 03:48, 5 April 2020 (removed uncited sources. Added new sources.). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

Olam International Limited
Company typePublic company
SGX: O32
IndustryAgri-business
FoundedNigeria (1989 (1989))
Headquarters
Singapore
,
Singapore
Key people
RevenueIncrease S$26,272.5 million (2017)[1]
Increase S$1,202.8 million (2016) [2]
Increase S$363.800 million (2016) [2]
Total assetsIncrease S$15,173.208 million (2016) [2]
Total equityIncrease S$5,634.304 million (2016)[2]
Number of employees
35,045 (2016)[2]
Websiteolamgroup.com

Olam International is a leading food and agri-business company in the world, operating from seed to shelf in 70 countries, supplying food and industrial raw materials to over 23,000 customers worldwide.[2] Olam is one of the world's largest suppliers of cocoa beans and products, coffee, cotton and rice.[3]

History

Established in 1989, Olam has evolved from a single-product, single-country geography, to a multi-product, multi-national, agri-business today, with 70,000 employees,[4] contract, seasonal and temporary workers from 70 different nationalities.

In 1989, the Kewalram Chanrai Group established Olam Nigeria Plc to set up a non-oil based export operation out of Nigeria to secure hard currency earnings to meet the foreign exchange requirements of the other Group Companies operating in Nigeria. The success of this operation resulted in Olam establishing an independent export operation and sourcing and exporting other agricultural products. The Group's agri-business was headquartered in London and operated under the name of Chanrai International Limited. The business began with the export of cashews from Nigeria and then expanded into exports of cotton, cocoa and sheanuts from Nigeria.[citation needed]

Move to Singapore

Between 1993 and 1995, the business grew from a single operation into multiple origins, first within West Africa (including Benin, Togo, Ghana, Côte d'Ivoire, Burkina Faso, Senegal, Guinea Bissau, Cameroon and Gabon), and then to East Africa (Tanzania, Kenya, Uganda, Mozambique and Madagascar) and then India. The move into multiple origin countries coincided with the deregulation of the agricultural commodity markets.[citation needed]

Olam International Limited was incorporated in Singapore on 4 July 1995 as a public limited company. In 1996, at the invitation of the Singapore Trade Development Board (now International Enterprise Singapore), Olam relocated their entire operations from London to Singapore. Furthermore, the Singapore Government awarded Olam the Approved International Trader status (now called the Global Trader Programme) under which Olam was granted a concessionary tax rate of 10%, which was subsequently reduced, in 2004, to 5%. On relocation to Singapore, the Group's agri-business was reorganised to be wholly owned by Olam International Limited in Singapore.[citation needed]

During this phase, Olam established sourcing and marketing operations in Indonesia, Vietnam, Thailand, China, Papua New Guinea, the Middle East, Central Asia and Brazil.[citation needed]

IPO

In 2002, Russell AIF Singapore Investments Limited (managed by OnAIF Capital limited), became the first external investor to take an equity stake in the company. In 2003, Temasek Holdings, through its wholly owned subsidiary, Seletar Investments, took a stake in Olam, followed by International Finance Corporation (IFC).

In 2005, Olam International Limited was listed on the Main Board of the Singapore Exchange on 11 February 2005. Temasek made a strategic investment in Olam in 2009.

As of December 2014, following a Voluntary General Offer[5] it holds close to 51.4% of Olam.[6] In 2015 Mitsubishi Corporate acquired a shareholding of 20% making them the second largest shareholder.

The Management Team of Olam has a significant shareholding in the company approximating 5.8%[7] in the total issued share capital. Olam's free float owned by public shareholders accounts for approximately 14.8% of the total issued share capital.[8]

Post IPO

Olam is active in the supply chain management of agricultural raw materials and food ingredients. With operations across more than 70 countries, Olam supplies 47 agri-products[4] and markets them to over 23,000 customers[4] with a global employee strength of 35,045, totalling 70,000 when contract and temporary workers are included.[2]

In 2010, Olam International discussed a possible merger with one of its main competitors, i.e. the Geneva-based Louis Dreyfus Commodities, the world's largest cotton and rice trading company. This idea was given-up early 2011, as the two parties could not find an agreement on the details of such a potential merger.

Olam announced in July 2013, that it would sell its cotton assets in Zimbabwe, with the preferred buyer being a private equity company.[9]

Restructuring

In January 2020, Olam International announced division of its portfolio of diverse products into two new operating businesses, Olam Food Ingredients (OFI) and Olam Global Agri (OGA). The decision followed from its business review last year, and a multi-year plan announced early in 2019 to invest US$3.5 billion into key growth areas, such as edible nuts, coffee and cocoa, while shedding other sectors.[10] In the statement released by the firm, Olam Food Ingredients (OFI), will consist of its cocoa, coffee, edible nuts, spices and dairy businesses, Olam Global Agri (OGA) will include grains and animal feed, edible oils, rice, cotton and commodity financial services.[11]

Community Involvement

Eradicating Child Labour

In 2020, Olam Cocoa, a subsidiary of Olam International, rolled out a new initiative in partnership with the Fair Labor Association (FLA) and local cocoa farming cooperatives to digitally register its nearly 7,000 farmer suppliers in Cameroon and their households.[12] This also include introducing rigorous tractability and reporting systems, educating local communities about child labor, as well as setting up dedicated child labor monitoring and remediation systems (CLMRS).[13] This is the first instance of professional application of such initiatives at such a scale in Cameroon. Forward, the company plans to expand its initiative to cover nearly 223,000 farmers in three countries across West Africa.[12]

Sustainable Rice Platform (SRP)

Olam International currently one of the founding members of the Sustainable Rice Platform (SRP)[14], a multi-stakeholder platform, co-convened by United Nations Environmental Programme (UNEP) and the International Rice Research Institute to promote resource efficiency and sustainable trade flows, production and consumption operations, and supply chains in the global rice sector.[15][16]

Allegations

Deforestation-linked palm oil, cocoa, and rubber

Between 2011 and 2015, Olam's palm oil trade volume grew by approximately twenty times—from 71,000 tons to 1.53 million tons.[17] Despite Olam's stated commitment to RSPO-certified palm oil, the company shunned transparency as it expanded its palm oil production.[18][19]

A report[20] released by the NGO Mighty Earth and Gabon-based NGO Brainforest on December 12, 2016 revealed that Olam was operating a secretive palm oil trading operation worldwide, particularly with its third party suppliers in Asia. Olam was accused of endangering the forest habitats of gorillas, chimpanzees and forest elephants due to widespread deforestation.[21] It was revealed that in Gabon Olam had cut 26,000 hectares (64,000 acres) of forest for palm oil.[22]

The photos and videos featured in the NGO report show Olam bulldozing Gabonese rainforests for rubber and to establish what they intended to build as Africa's largest palm oil plantation. The analysis found that in Gabon Olam cleared approximately 26,000 hectares of forest across its four palm oil concessions since 2012[23][24][25][26] and additional forests for rubber.

The two NGOs also documented Olam's cutting down an area the size of Washington DC in what had been an intact forest landscape in Northern Gabon, for rubber in Gabon.[27]

On December 16, 2016, shortly after the report was released, Mighty Earth submitted a formal complaint against Olam to the Forest Stewardship Council (FSC) for Olam's deforestation and for violating FSC policies.[28] In response to these allegations, on February 21, 2017, Olam suspended further land clearing of forests in Gabon for at least a year.[29] As a result, Mighty Earth suspended its campaign.[30][28][31][32][33]

On September 13, 2017 NGO Mighty Earth released a second report[34] documenting findings that Olam purchases cocoa grown illegally in national parks and other protected forests in the Ivory Coast.

The report accused Olam of endangering the forest habitats of chimpanzees, elephants and other wildlife populations by purchasing cocoa linked to deforestation.[35][36][37] As a result of cocoa production, 7 of the 23 Ivorian protected areas have been almost entirely converted to cocoa.[38] Olam was notified of the findings of Mighty Earth's investigation and did not deny that the company sourced its cocoa from protected areas in the Ivory Coast.

Muddy Waters allegations

In November 2012, Carson Block of Muddy Waters Research accused Olam of "deciding to take huge leverage and invest in illiquid positions",[39] questioning its accounting practices and accusing its board of an "abject failure of leadership".[40] Olam called the allegations "baseless rumour-mongering" and sued Block for libel,[41][42] but its shares nevertheless fell 21%.[39]

Forced evictions and land clearance in Laos

The company is involved in the production of coffee in Laos and the clearance of forests and villages to plant large plantations. Areas of land that were acquired by the company were previously inhabited and farmed by villagers who had paid their land taxes and were also farming coffee alongside other products.[43] Compensation was only partly paid, with many evicted landholders being paid only in rice. Many landholders are now facing challenges to grow enough food to survive. This development of large industrial plantations at the sacrifice of the small holding family unit is argued by some to be counterproductive to the development of Laos; as it reduces the overall agricultural productivity; and increases poverty amongst the families, while a few officials and the company benefit.[44]

Awards

See also

References

  1. ^ https://www.olamgroup.com/content/dam/olamgroup/files/uploads/2018/04/10Apr2018_OIL_2017AnnualReport.pdf
  2. ^ a b c d e f g http://olamgroup.com/investor-relations/annual-report-2016/
  3. ^ "Products & Services - Olam". Olam. Retrieved 28 June 2017.
  4. ^ a b c "About Olam". Olam. Retrieved 6 February 2019.
  5. ^ Voluntary Unconditional Cash Offer: Close of the Offer, Dealings Disclosure and Final Level of Acceptances for 23 May 2014
  6. ^ Shareholding Structure
  7. ^ "Shareholding Structure - Olam". Retrieved 14 July 2016.
  8. ^ "Shareholding Structure". Olam. Retrieved 6 February 2019.
  9. ^ Olam to Sell Zim Assets, Africa: AllAfrica.com, 2013
  10. ^ "Olam divides businesses into two units, eyes listings". CNA. Retrieved 5 April 2020.
  11. ^ hermes (21 January 2020). "Olam splits businesses into two units". The Straits Times. Retrieved 5 April 2020.
  12. ^ a b confectionerynews.com. "Olam Cocoa introduces new app to monitor child labour on farms in West African countries". confectionerynews.com. Retrieved 5 April 2020.
  13. ^ "Olam Cocoa continues work to eradicate child labor". www.candyindustry.com. Retrieved 5 April 2020.
  14. ^ Eco-Business. "The race against time to cut rice's carbon footprint". Eco-Business. Retrieved 5 April 2020. {{cite web}}: |last= has generic name (help)
  15. ^ "Sustainable Rice Platform (SRP)". www.sustainablerice.org. Retrieved 5 April 2020.
  16. ^ Environment, U. N. (28 September 2017). "Sustainable Rice Platform". UNEP - UN Environment Programme. Retrieved 5 April 2020.
  17. ^ "RSPO Progress Report 2015, Olam International" (PDF).
  18. ^ The Rainforest Foundation UK. Seeds of Destruction Report. February 2013.http://www.rainforestfoundationuk.org/media.ashx/seedsofdestructionfebruary2013.pdf
  19. ^ "Ag Commodities Giant Agrees to Stop Deforestation in Africa". Triple Pundit: People, Planet, Profit. 22 February 2017. Retrieved 28 June 2017.
  20. ^ "Palm Oil's Black Box" (PDF). December 2016.
  21. ^ "Subscribe to read". Financial Times. Retrieved 28 June 2017. {{cite web}}: Cite uses generic title (help)
  22. ^ "Palm oil giant defends its deforestation in Gabon, points to country's 'right to develop'". news.mongabay.com. Retrieved 29 June 2017.
  23. ^ Selby, Gaynor (12 December 2016). "Olam Linked to Palm Oil Related Deforestation in Scathing New Report". Food Ingredients First. Retrieved 6 June 2017.
  24. ^ Shah, Vaidehi (12 December 2016). "Green groups and Olam at loggerheads over deforestation". Eco Business. Retrieved 28 June 2017.
  25. ^ Fogarty, David (13 December 2016). "Olam denies charges of destroying Gabon forest". Straits Times. Retrieved 28 June 2017.
  26. ^ "Palm oil giant Olam accused over sourcing". BBC News. 12 December 2016. Retrieved 28 June 2017.
  27. ^ Mighty Earth and Brainforest Gabon. Submission to the FSC: Olam Rubber Gabon - Deforestation the past five years. 2016. http://www.mightyearth.org/wp-content/uploads/2016/07/Olam-Rubber-Gabon.pdf
  28. ^ a b "Olam and Mighty Earth agree to collaborate on Forest Conservation and Sustainable Agriculture in Highly Forested Countries - Olam". Olam. Retrieved 28 June 2017.
  29. ^ "Olam and Mighty Earth agree to collaborate on Forest Conservation and Sustainable Agriculture in Highly Forested Countries - Olam". Olam. Retrieved 29 June 2017.
  30. ^ Soh, Andrea. "Olam to pause land clearing in Gabon in truce with Mighty Earth". The Business Times. Retrieved 28 June 2017.
  31. ^ "BRIEF-Olam and Mighty Earth agree to collaborate". Reuters. 21 February 2017. Retrieved 28 June 2017.
  32. ^ "Olam to pause forest clearing in Gabon in truce with Mighty Earth". AsiaOne. Retrieved 28 June 2017.
  33. ^ hermesauto (22 February 2017). "Olam, US green group agree to collaborate on forest conservation and sustainable agriculture". The Straits Times. Retrieved 28 June 2017.
  34. ^ "Chocolate's Dark Secret". September 2017.
  35. ^ Covey, R. and McGraw, W. S. “Monkeys in a West African bushmeat market: implications for cercopithecid conservation in eastern Liberia.” Tropical Conservation Science. 7.1 (2014): 115-125.
  36. ^ Marchesi, P., Marchesi, N., Fruth, B., and Boesch, C. “Census and Distribution of Chimpanzees in Cote D’Ivoire.” PRIMATES. 36.4(1995): 591-607.
  37. ^ “Poaching contributes to forest elephant declines in Côte d’Ivoire, new numbers reveal.” WWF. 05 September 2011.
  38. ^ Bitty, A. E., Gonedele, S. B., Koffi Bene, J.C., Kouass, P.Q.I and McGraw, W. S. “Cocoa farming and primate extirpation inside The Ivory Coast’s protected areas.” Tropical Conservation Science. 8.1(2015): 95-113.
  39. ^ a b "Olam launches defence against Muddy Waters - FT.com". Retrieved 14 July 2016.
  40. ^ "Muddy Waters Reaction to Olam Frantic Response - Muddy Waters Research". Retrieved 14 July 2016.
  41. ^ "Olam Sues Short-Seller Muddy Waters". Reuters  – via HighBeam Research (subscription required) . 21 November 2012. Archived from the original on 24 September 2015. Retrieved 5 December 2012.
  42. ^ Jones, Sam. "Olam hits back at Block with libel suit". Retrieved 14 July 2016 – via Financial Times.
  43. ^ http://www.laolandissues.org/wp-content/uploads/2012/01/Case-Champasak-Coffee-in-Paksong-June-2012.pdf
  44. ^ How Asia Works, Studwell J, Longlist 2013
  45. ^ "The World's Biggest Public Companies". Forbes. 2019. Retrieved 15 July 2019.
Retrieved from "https://en.wikipedia.org/w/index.php?title=Olam_International&oldid=949196009"