Olam has announced a reorganisation of its structure into two operating groups focusing on food ingredients and global agri-business.
According to the company, the plan will enable it to explore options to maximise long-term value via potential carve-out and capital raising options, including IPO listings for both operating groups.
Olam Food Ingredients (OFI) offers value-added food products and ingredients and consists of Olam’s cocoa, coffee, edible nuts, spices and dairy businesses.
Meanwhile, Olam Global Agri (OGA) is a player in 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.
The move comes a year after Olam revealed plans to sell off four business segments and invest $3.5 million in 12 high-potential growth areas to strengthen and focus its portfolio.
In a statement, the company said Olam International, as the parent company of OFI and OGA, will play a “key role” in unlocking the full value of the Olam Group.
A Shekhar has now been appointed as CEO of OFI and will step down from his current role as group chief operating officer of Olam with immediate effect.
Sunny Verghese will hold charge as CEO of OGA and Olam International, in addition to continuing as group CEO.
“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,” said Verghese.
“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.”
Chairman of the board, Lim Ah Doo, added: “The board of directors, building in part on the recommendation from the two independent financial advisors, believes that the reorganisation will enable each operating group to pursue its own vision, take advantage of new market opportunities, optimise resources and attract new talent.
“The board has every confidence that this significant step forward will allow the company to strengthen and capitalise on its strong foundation to achieve higher growth and value creation, which we believe will be welcomed by our stakeholders.”
