Olam Sees 19 percent Growth in Food Staples
The relatively recession-resistant food category accounted for 77.6% of revenue and 83.2% of volumes. More importantly, this segment recorded strong NC growth of 32.1% and NC Per Ton growth of 12.2% over the previous period.
Feb 15 2012 --- Olam reported a 19 percent growth in its staple food commodity business. The segment expanded 19 percent in volume and 12 percent in revenue, driven by rice and grain.
Overall quarterly performance was damaged by weak cotton and timber demand; earnings were dragged down by industrial raw materials, which saw net contribution drop 29 percent in the quarter to S$35.1 million from a year earlier.
The relatively recession-resistant food category accounted for 77.6% of revenue and 83.2% of volumes. More importantly, this segment recorded strong NC growth of 32.1% and NC Per Ton growth of 12.2% over the previous period.
Olam’s Group Managing Director and CEO Sunny Verghese commented: “The food and food-related segments of our business continue to demonstrate robust growth across businesses, geographies and value chain activities. This strong performance has helped to offset the results achieved in our industrial raw material business which is more recession-sensitive, and therefore continues to face demand and margin pressures.”
The Edible Nuts, Spices & Beans segment continued on its strong growth trajectory in volume, NC and NC Per Ton in H1 FY2012. The period marked the commencement of commercial trials of the mechanical cashew processing factories in Ivory Coast and Nigeria, both of which are on track to meet the company’s targeted productivity improvements and cost savings while maintaining output and quality standards. The Almond crop in Australia is progressing well with a record crop expected this season. The company’s investment to build an Almond processing facility in Australia is tracking as per plan and the plant is expected to commence production in FY 2013.
The Confectionery & Beverage Ingredients segment registered strong growth during the period with the Cocoa business continuing to grow in volume. The company expects to meet its procurement targets despite forecast of a short crop this year. The Coffee business in the Central Andean region saw a turnaround during the period and is now expected to start contributing to earnings from this year onward. The soluble coffee factory in Vietnam has registered strong performance.
The Food Staples & Packaged Foods segment registered the highest volume growth across all segments, driven by market share gains in our Rice and Grains businesses in the African markets. This period saw the successful commissioning of our wheat mill in Ghana where trial production is currently underway. The Dairy and Sugar businesses continue to operate in markets more sensitive to difficult global economic conditions and the company expects performance to be below plan this year.
During H1 FY2012, Olam concluded the acquisition of Trusty Foods Ltd (TFL), a tomato paste canning facility, and United Biscuits Ltd (UBL) in Ghana. These companies are currently in the process of being integrated with Olam’s Packaged Foods business in West Africa. While UBL is expected to be a contributor to Olam’s FY2012 earnings, the TFL plant will require refurbishment and is expected to commence production in Q1 FY2013.
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Profile Directory On Food Ingredients First
Olam Cocoa
COMPANY DETAILS
Olam Cocoa
New Zealand House, 80 Haymarket
London
SW1Y 4TE
United Kingdom
New Zealand House, 80 Haymarket
London
SW1Y 4TE
United Kingdom
www.olamgroup.com
cocoa@olamnet.com
Tel: +44 (0) 20 7389 6464
Fax: +44 (0) 20 7389 6465ACTIVE CATEGORIES
bakery mixes and other bakery products; cocoa and cocoa products; fat replacers
