Exotic and aromatic, mild or pungent, spices are the world's oldest traded commodity, dating back at least two millennia. Once valued as highly as gold, spices have dramatically influenced the course of history over time. Known to have provoked wars, spices have built and destroyed empires, as countries vied to win control over their production. Spices still play an important role both in national economies and daily life in many countries and are till today a key ingredient in every kitchen cupboard.

The global market for imported spices is large and valued at just under USD 2.3 billion. Annual imports are growing at an average of 8.5% a year. Unlike other commodities however, the term 'spices' refers to a basket of products rather than a single item. This basket comprises 4 segments i.e. tropical aromatics, herbs, spice seeds and dehydrates.

Pepper is the largest traded spice worldwide. Other spices sold in large volumes are ginger, cassia, paprika and capsicum. Some spices like cloves, vanilla, nutmegs and mace, though not large in volume account for a significant share of the value pie.

Main producing countries are India, Indonesia, Vietnam, China in Asia, Madagascar, Zanzibar, Uganda, Nigeria in Africa, Spain and Hungary in Europe and Grenada, Mexico, Guatemala and Brazil in the American continent. While spices are consumed all over the world USA is the single largest import market for spices followed closely by Germany and other parts of West Europe and the Mediterranean / Middle East belt.

Olam's role in the Spices Business

Olam's entry into the spices business has been the result of the company's strategy of growth and expansion through 'adjacencies'. Olam's direct presence in the key producing countries led to our initial participation in the cloves trade flow from Madagascar to Singapore / Indonesia. From that small beginning - coupled with rapid and substantive investments in origination, processing and distribution infrastructure - Olam has since emerged as a leading player in the global trade of pepper, cloves and ginger and also supplies a host of other condiments and spice seeds.

The key to achievement of this unique position in the industry has been the company's ability to leverage 3 key strengths , namely

Olam's physical presence in major producing countries like India, Vietnam, Indonesia, Nigeria and Brazil, giving it the ability procure and manage quality and logistics, right from the source.

The second capability is the primary processing infrastructure at origin for various tropical aromatic spices enabling greater control and homogeneity of product quality.

Last but no the least is , Olam's network of marketing offices in key destinations - Rotterdam, Marseilles, New York, Singapore, Moscow, Durban, Dubai, and India - which have extended the company's marketing reach to service its customers across a vast cross section of markets. It also enables us offer customized delivery and payment terms, including the stocking of material and and delivery to customer's factory gate.

Today, Olam is able to offer the following basket of products within the Spices Portfolio:

Black and White Pepper:
Olam is a leading pepper supplier and the only company having physical origin presence as well as versatile captive processing plants for pepper in 3 major pepper producing/exporting countries; viz. Vietnam, Indonesia and Brazil. Olam's Vietnam pepper processing facility is located in Bien-Hua near Ho Chi Minh City and can process upto 12,000 Mt steam-washed, sterilized ASTA grade pepper per annum. In Indonesia, Olam's pepper processing facility is located in Lampung, Sumatra and has a capability of processing over 6000 Mt of ASTA grade pepper per season. In Brazil, Olam's pepper processing facility is located in Castanhal, Para and has a capability of processing over 5000 Mt of ASTA grade pepper per season. Olam also carries out in house processing of Vietnamese white pepper and can tailor make material to buyer requirements. In addition, Olam also offers Muntok and Chinese white pepper procured through its origin offices in Lampung and Shanghai. Thus we are able to meet the varying needs of our discerning buyers, including the retail and industrial spice and seasoning manufacturers as well as the oleoresin industry.

Cloves
As is the case with pepper, Olam is probably the only global cloves supplier having physical origin presence for procurement in 3 major producing/exporting origins; namely Madagascar, Indonesia and Zanzibar. This is an important strength as it enables the company to offer cloves all year round and also participate in multiple trade flows where markets prefer material from specific origins.

Other Spices:
In addition to pepper and cloves, Olam offices in Indonesia, Vietnam, Middle East, China and Nigeria uses its widespread network to procure, process and distribute a host of other spices - to a consistent and reliable standard. The Olam Spice basket includes

• Ginger
• Gambier
• Arecanut
• Long pepper
• Cassia
• Nutmegs
• Mace
• Cumin
• Star Anise
• Turmeric

Olam Future Strategy
Olam's is looking at various initiatives to expand the product basket, as well as improving the service package to its customers worldwide. These include:

• Integrating up the value chain through enhanced specialized processing at origin e.g. steam / ETO sterilization, grinding of spices at origin etc.
• Strengthening customer base in USA, Europe, Middle east through network of representative offices in different countries
• Increasing the basket of spice offerings to the buyer through expansion of product range into seed spices and dehydrates procured mainly through Olam's offices in China and Dubai
• Product customization, Enhanced Food Safety and Hygiene standards, and providing material with complete traceability, and potentially with specialized fair trade practice and organic certification.
• Provide customized risk solutions
• Source of reliable and proprietary market information