Olam International
Olam International is a major food and agri-business company, operating in 60 countries and supplying food and industrial raw materials to over 19,800 customers worldwide. Olam is among the world's largest suppliers of cocoa beans and products, coffee, cotton and rice.
History
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 until 1996, 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.Move to Singapore
Between 1993 and 1995, the business grew from a single operation into multiple origins, first within West Africa, and then to East Africa and India. The move into multiple origin countries coincided with the deregulation of the agricultural commodity markets.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, Olam relocated their entire operations from London to Singapore. Furthermore, the Singapore Government awarded Olam the Approved International Trader status 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.
IPO
In 2002, AIF Capital became the first external investor to take an equity stake in the company. In 2003, the state-owned Temasek Holdings, through its wholly owned subsidiary Seletar Investments, took a stake in Olam, followed by International Finance Corporation.In 2005, Olam International Limited was listed on the main board of the Singapore Exchange on 11 February 2005. Temasek made a further investment in Olam in 2009.
As of December 2014, following a Voluntary General Offer Temasek held close to 80% of Olam. By 2020 this had reduced to 53.4%. In 2015 Mitsubishi Corporation acquired a shareholding of 20% making them the second largest shareholder.
The management team of Olam has a shareholding in the company approximating 6.3% of the total issued share capital. Olam's free float owned by public shareholders accounts for approximately 15.9% of the total issued share capital in 2020.
Possible merger and divestment
In 2010, Olam International discussed a possible merger with one of its main competitors; Geneva-based Louis Dreyfus Commodities, the world's largest cotton and rice trading company. This idea was abandoned in early 2011.Olam announced in July 2013, that it would sell its cotton assets in Zimbabwe, with the preferred buyer being a private equity company.
In 2019, the company announced plans to sell its sugar, rubber, wood products and fertiliser units.
Restructuring
In January 2020, Olam International announced division of its portfolio of diverse products into two new operating businesses, Olam Food Ingredients and Olam Global Agri. The decision followed from its 2019 business review, 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. In the statement released by the firm, Olam Food Ingredients, will consist of its cocoa, coffee, edible nuts, spices and dairy businesses, Olam Global Agri will include grains and animal feed, edible oils, rice, cotton and commodity financial services.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 and local cocoa farming cooperatives to digitally register its nearly 7,000 farmer suppliers in Cameroon and their households. 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. 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.Sustainable Rice Platform (SRP)
Olam International currently one of the founding members of the Sustainable Rice Platform, a multi-stakeholder platform, co-convened by United Nations Environmental Programme 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.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. Despite Olam's stated commitment to RSPO-certified palm oil, the company shunned transparency as it expanded its palm oil production.A report 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. It was revealed that in Gabon, Olam had cut of forest for palm oil.
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 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.
On December 16, 2016, shortly after the report was released, Mighty Earth submitted a formal complaint against Olam to the Forest Stewardship Council for Olam's deforestation and for violating FSC policies.
In response to these allegations, on February 21, 2017, Olam suspended further land clearing of forests in Gabon for at least a year. As a result, Mighty Earth suspended its campaign.
On September 13, 2017 NGO Mighty Earth released a second report 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. As a result of cocoa production, 7 of the 23 Ivorian protected areas have been almost entirely converted to cocoa. 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.