CASHEW

The Cashew tree (Anacardium Occidentale) is a tropical evergreen native to the Americas but is now widely cultivated in Asia and Africa. Cashew in its natural form is a soft, white, meaty kernel contained within the hard shells of kidney shaped, raw cashew nuts. Cashew is consumed all over the world as a snack or used as a food ingredient.

The international trade in cashew is still young compared to other commodities; it started only some 75 years ago and trade in this product is relatively unsophisticated. Each year over 1.8 million metric tonnes of raw cashew seeds are produced in 19 countries, with major producers being India, Brazil, Vietnam, Cote d'Ivoire, Tanzania, Guinea Bissau, Benin, Nigeria, Mozambique and Indonesia.

Olam is the only fully integrated player in the supply chain with presence in 15 producing countries, processing and packaging facilities in seven countries and marketing offices in all the key destination markets.

Olam's position in the cashew industry is reflected by its unique participation; it is the only company to have significant interests in each segment of the product value chain, through:

1. Sourcing and marketing the raw nut;
2. Processing of the raw seed to extract the blanched kernels and value-added processing; and
3. Marketing and distribution of the kernels to end users (roasters and salters and bakery/confectionery industry) in all the major consuming markets

Sourcing

Olam has a diversified sourcing operation spanning 15 countries, including all major cashew growing areas in Brazil, West and East Africa, India and Vietnam. The success of this operation is built on Olam's superior origination and logistics capability, excellent relationships with the farmers and other local suppliers, as well as an in-depth product knowledge. Olam is currently the world's largest supplier of raw cashew nuts with a market share of approximately 20% of the global trade flow.

Processing

The second segment in the value chain is the processing operation for extracting the kernels from the cashew nut, which is a complex and management intensive operation. The processing industry is dominated by India, Brazil and Vietnam. Almost 55% of global processing volumes are handled in India while Brazil and Vietnam account for about 18% and 22 % respectively. These three countries account for nearly 90 % of world's processing and Olam has a significant presence in all these processing centres.

The knowledge on cashew processing that Olam built over the years in established cashew processing origins like India, Brazil and Vietnam has been successfully transferred to the African raw cashew producing countries like Tanzania, Mozambique, Cote d’Ivoire and Nigeria – a logical step towards higher cost efficiency as the raw cashew nuts would otherwise have to be exported to India and Vietnam for processing, resulting in significant dead weight carried.

Olam operates large-scale centralised factories, where the kernel output is graded according to stringent international standards. Olam runs and manages 30 cashew processing and packing facilities across seven processing origins in Asia, Africa and South America, providing direct and indirect employment to over 30,000 people (almost 95% of them are women), generating employment mainly in rural areas where employment opportunities are not available otherwise.

Many of our facilities are HACCP and BRC certified by internationally renowned companies like SGS and BVQI, with systems in place to offer full traceability to our customers. Olam's factories in Vietnam, Tanzania and Brazil are also certified for Organic Cashews, with traceability established all the way to the individual farms.

A strict measurement and monitoring system allows Olam to manage these process intensive operations, by maintaining a firm control on costs while at the same time maintaining high standards of quality. This in turn, enables Olam to deliver high quality kernels to meet the requirements of its customers worldwide.

Due to increased appetite from the confectionery and snack foods majors for premium products, we have introduced value-added processing by offering customised cashew ingredients from our Vietnam factory and roast-ready cashews from our new US facility. These customers typical need high quality, reliable suppliers to whom they can outsource production of roast-ready, foreign-material free food ingredients, and we are well positioned to take advantage of this trend, given our global sourcing presence and our ability to process and offer differentiated qualities.

Leveraging the capabilities of our subsidiary, Universal Blanchers, we will be able to provide customers with 100% foreign-material free, clean cashews which they can add directly to their roasting and salting lines. In an effort to standardise quality control procedures globally, SGS Geneva has been appointed to certify and monitor all our cashew factories around the world for compliance with BRC and HACCP guidelines.

Marketing and Distribution

Olam's participation in all parts of the value chain and its global spread in Cashew enable it to service its customers reliably with a variety of good quality kernels, from all the cashew origins, throughout the year. Through its marketing offices in Singapore, Rotterdam, Atlanta (USA), Moscow, Dubai and Durban, all the major cashew users have a timely access to Olam's proprietary information from all parts of the physical supply value chain.

Apart from the capability to offer the complete spread of all Cashew grades from all origins, through its own factories - Olam also provides tailor-made solutions like guaranteed 100% foreign material free kernels, non-standard ingredient size grades and packaging in bulk bags etc to all its valued customers.

Olam's vertical integration and geographical spread, coupled with its innovative model of buying, processing and distributing kernels, has enabled it to build a unique competitive position in the industry, making it the largest Cashew supplier in the world today.

Expansion Plans

Olam will continue to consolidate its position by having a more direct presence in other raw cashew growing origins through our cashew processing initiatives across these diverse origins, which is unique to the industry and more importantly fits well into our long tradition of knitting sustainability and community development into our business operations. We also plan to offer customised risk solutions to our cashew customers in the future.

Download our product brochure here.