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Since our establishment in 1989, we have remained focused in a single commodity asset class- the agricultural complex. We have grown by taking advantage of adjacent opportunities in the ag complex and have evolved from a single product, single country company in 1989, to a multiproduct, multinational, integrated supply chain manager today. We have consistently exceeded the expectations of all our stakeholders by leveraging our resources, including people, knowledge, capabilities, skill sets, systems and physical assets, to create a competitive advantage which has helped us to grow profitably and to build leadership positions.
Our history and development can be categorised into the following distinct phases: -
The Formative Years: 1989 to 1992
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 not related to the Group.
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. This enabled us to develop our origination capabilities and expertise in the sourcing, processing and marketing of agricultural products. During this phase our business was a single-country, multiple-product operation.
Business Model Development: 1993 to 1995
By the start of 1993, we recognised patterns and similarities in the sourcing, storing, transporting and marketing of these agricultural products, in the skills and capabilities required to participate in these businesses and the tools and techniques required to manage the particular risks inherent across these product markets.
We saw an opportunity to transfer these skills and competencies across geographic boundaries into other developing countries and across product boundaries to other adjacent products. Between 1993 and 1995, the business grew from a single country operation into multiple origins, first within West Africa (including Benin, Togo, Ghana, Cote d'Ivoire, Burkina Faso, Senegal, Guinea Bissau, Cameroon and Gabon), and then to East Africa (Tanzania, Kenya, Uganda, Mozambique and Madagascar) and then India. Our move into multiple Origin Countries coincided with the deregulation of the agricultural commodity markets.
Global Expansion: 1996 to 2002
Olam International Limited was incorporated in Singapore on 4 July 1995 under the Company's Act as a public limited company. In 1996, at the invitation of the Singapore Trade Development Board (now International Enterprise Singapore), we relocated our entire operations from London to Singapore. Our strategic plan, developed in 1995, envisaged the expansion and replication of our successful sourcing operations that we had established in Africa into South East Asia and the Indian sub continent. As such, we believed that better focus could be provided to such an expansion out of Singapore. Furthermore, the Singapore Government awarded Olam the Approved International Trader ("AIT") status (now called the Global Trader Programme ("GTP")) under which we were granted a concessionary tax rate of 10 per cent., which was subsequently reduced, in 2004, to 5 per cent. On relocation to Singapore, the Group's agri-business was reorganised to be wholly owned by Olam International Ltd in Singapore.
During this phase, we applied our business model to capitalise on growth opportunities present in our various businesses. Singapore became the corporate headquarters and the key marketing and trading centre for all our operations. To further focus on providing quality customer service, marketing offices were opened in Poland, the Netherlands, France, UK, Italy and USA. We also successfully established sourcing and marketing operations in Indonesia, Vietnam, Thailand, China, Papua New Guinea, Middle East, Central Asia and Brazil.
Becoming a Publicly Listed Company 2002-2005
In 2002, Russell AIF Singapore Investments Limited (managed by AIF 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]
2005 marked a key inflection point in Olam’s history. After nearly a decade as a highly successful private company, Olam International Limited listed on the Main Board of the Singapore Exchange on 11th February 2005.The floatation was oversubscribed 15.16 times. The founders, The Kewalram Chanrai Group today have a 26.7% stake in the company. The Management Team of Olam has a significant shareholding in the company approximating 16.1% in the total issued share capital, which greatly aligns shareholder and management interests in creating value. Olam's free float owned by public shareholders accounts for approximately 57.1% of the total issued share capital.
Building a Global Leader 2005-
Olam today is a global leader in the supply chain management of agricultural products and food ingredients. We source our products from over 45 countries and market them to over 60 countries through a global talent pool of over 8000 with employees drawn from 50 nationalities. Olam’s growth strategy in the first 17 years was driven by a clear focus on our core business and a systematic and repeatable formula for adjacency expansion based on that core. In addition to organic growth, we are also targeting to grow through carefully selected acquisitions. We do not see acquisitions as a separate strategy in itself. We see M & A as an aid or tool to support each business’s overall strategy.
Our organic growth strategy was driven by a clear focus on our core business, namely, supply chain management of agricultural products and food ingredients, and a systematic and repeatable formula for adjacency expansion based on that core. We are pursuing 4 clear strategic pathways for growth. These are to: scale up volumes in existing businesses; provide value added services and customized solutions; enter attractive and related new product adjacencies and pursue cross product initiatives that cut across multiple businesses. Over this period, we consolidated our global leadership positions in most of the products and expanded into new products such as peanuts, beans, dairy products and packaged foods.
As Olam develops we are acquiring new strengths, organically by building synergies between our operations in the origins and the markets, and inorganically by investing in and acquiring new capabilities that complement and enhance our existing businesses.
We aim to be number one or two in each of our businesses globally and we have identified clearly defined growth strategies to achieve our goals.
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