The Shea tree is found scattered in the West African savannah. It is not cultivated but found wild in these areas. It was discovered in the interiors of Mali in the 18th century and contributes significantly to the export earnings for Ghana, Cote d'Ivoire and Burkina Faso. In addition Nigeria, Benin and Togo are the other West African countries exporting sheanuts. The shea fruit, when it is ripe, falls off the tree and is then collected by members of a farmer's household and either boiled or roasted to extract the nut from the fruit.

The 'Sheanut' is crushed to extract sheabutter, which after further processing, is used as an ingredient in the manufacture of chocolate, as an equivalent for cocoa butter. It is also used in the manufacture of cosmetics and in parts of West Africa, as an edible oil.

The exportable crop in a year is a function of the demand for sheanuts and the returns its gives to the farmers in the growing countries. The export of sheanuts from West Africa varies from 80,000 to 120,000 MT but it is estimated that the harvestable crop could be as high as 180,000 MT.

Olam's role in the Sheanuts Business

Olam's experience in the procurement, drying and shipment of sheanuts spans a decade with its first shipment of 3,000 tonnes being made to Sweden in 1991; since then it has grown to become one of the largest shipper of sheanuts in the world.

Today, Olam is the only Sheanut supplier in the world to be physically present in all the Shea growing origins, from Nigeria to Benin, Togo, Ghana, Ivory Coast and Burkina Faso. In all these countries it has established a procurement network reaching to the very first link in the chain - the collectors.

The critical quality parameters in sheanuts are the oil content and Free Fatty Acids (FFA) percentage. The sheanut is very wet when it is picked and the drying process and consequent storage has to be managed efficiently to ensure that the Free Fatty Acid content remains as low as possible.

With its experience and available data, Olam has correlated the results obtained in its laboratories with those obtained in tests conducted at European laboratories which has enabled the company to demarcate growing areas in each country in terms of the quality of the sheanuts grown and processed. The ability to understand and manage the quality of sheanuts is Olam's competitive advantage which is shown by its capability to consistently deliver to its customer, a high quality product in large volumes.

In Ghana, which has the largest shea crop and Olam's has its largest sheanut operation the company was awarded the Ghana Export Promotion Council Award for Non Traditional Exports in recognition of its commitment to the growth and development of the sheanut industry.

Olam, by its presence in all the shea growing countries and its position in the industry is uniquely positioned to harness the significant growth anticipated in the sheanut and CBE industry.

Olam's future strategy

Till two years back , the use of Shea products as a Cocoa Butter Equivalent (CBE) was not allowed in most of the countries in the European Union. However, the ruling allowing chocolate manufacturers in all its member countries to use up to 5% CBE's in chocolates has boosted the use of Shea. Given the cost differential between cocoa butter and CBE, this ruling is leading to a significant increase in the demand for CBE's and therefore sheanuts.

Changes in the shea crushing industry with additional crushing capacity shifting from Europe to the West African source will provide Olam with an opportunity to increase its involvement in the processing of sheanuts.