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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 seeds. 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 1.5 million metric tons of raw cashew seeds are produced in 19 countries, major producers being India, Brazil, Vietnam, Cote d'Ivoire, Tanzania, Guinea Bissau, Benin, Nigeria, Mozambique and Indonesia.
Olam's Cashew Business
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, viz
- Sourcing and marketing the raw seed
- Processing of the raw seed to extract the blanched kernels
- Marketing and distribution of the kernels to end users (roasters & salters and bakery / confectionery industry) in all the major consuming markets
Olam has a diversified sourcing operation in all major cashew growing areas in Brazil, West and East Africa, India, Vietnam and Indonesia - spanning 15 countries. 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 25% of the global trade flow.
The second segment in the value chain is the processing operation for extracting the kernels from the cashew seed, 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 centers.
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, Ivory Coast and Nigeria - a logical step since the raw cashew nuts were being exported to India/Vietnam from these countries. Olam operates large-scale centralized 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, providing direct & indirect employment to over 30,000 people (almost 95% of these are women), generating employment mainly in rural areas where employment opportunities are not available otherwise. Many of our facilities are HACCP-certified by internationally renowned companies like SGS and BVQI, with systems in place to offer full traceability to our customers. Olam's factories in 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.
The final link in the chain is the marketing and distribution operation. Olam's participation in all parts of the value chain and its global spread in Cashew enables 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, New York, 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.
Olam's future strategy
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. Olam also plans to offer customized risk solutions to our cashew customers in the future. |
