Olam’s 2020 Annual Report: Driving sustainable growth and success stems from demerger
08 Apr 2021 --- Global food and agri-business Olam International Limited has published its 2020 Annual Report, outlining the company’s financial and non-financial performance for the year. Key highlights include how Olam made significant progress on its Reorganization Plan to unlock and maximize long-term sustainable value via carve-out, IPO and concurrent demerger of Olam Food Ingredients (OFI) and pursue similar strategic options for Olam Global Agri (OGA).
Olam has also successfully navigated the pandemic to emerge stronger, delivering robust operational financial performance in 2020.
Re-imagining global agriculture and food systems
“2020 was one of our strongest years on record as we delivered operational earnings growth of 36.0 percent to USS$677.8 million even as we contended with the COVID-19 pandemic. We also made significant progress on our transformational Reorganization Plan to unlock and illuminate the current value of our business and develop new strategic pathways that drive sustainable growth for the Group,” Sunny Verghese, Co-Founder and Group CEO of Olam.
“As a new standalone operating group, OGA is uniquely positioned to meet the growing demand for food staples and feed across high-growth emerging markets. In the past year, our Rice brand distribution business broke records, our integrated flour and pasta manufacturing business became Nigeria’s leading pasta provider, and we are meeting the need for more traceable, sustainable agricultural commodities through platforms and initiatives like AtSource and the Sustainable Rice Platform.”
A. Shekhar, CEO of OFI, adds how OFI’s first year as a separate operating group was solid as the company overcame the challenges posed by the pandemic in H1 and delivered resilient all-round performance in H2.
“We also continued to invest in attractive growth segments like our acquisition of a leading US-based chilli pepper business, as well as greenfield investments for manufacturing soluble coffee in Brazil and dairy ingredients in New Zealand.”
“OFI’s ‘on-trend’ value-added portfolio allows us to offer our customers more choices, including sustainably sourced and traceable Food & Beverage ingredients, as well as innovative end-use application solutions.”
Shekhar also notes how the company is reaching new customers by expanding capabilities in targeted end-use categories like Bakery, Confectionery, Beverages, Snacks and Culinary.
“We remain excited and optimistic about the future growth prospects for OFI as we progress towards the proposed carve-out and concurrent demerger and listing by H1 2022,” he adds.
Key highlights for Olam also include:
- 773,000 smallholders receiving sustainability support with over 60 customer and NGO partnerships for livelihoods alone; a further 2.6 million farmers in India are benefiting from AgriCentral, our farmer services platform in India.
- 33 percent reduction in GHG intensity for Olam processing emissions.
- Achieving significant milestone for Cocoa Compass with 100 percent traceability of directly sourced cocoa across global supply chain tracking 12 percent of world’s cocoa beans back to an individual farm or community.
- Committing over US$7 million of in-kind and financial support, benefiting over 11.5 million people across 33 countries amid COVID-19.
- Piloting an Integrated Impact Statement (IIS) case study in Vietnam to understand Human Capital Accounting (HCA).
- Leading LIBOR transition with a landmark loan and Singapore’s first Overnight Rate Average (SORA)-pegged club loan of S$200 million, setting the pace for the industry’s future syndicated SORA loans.
- Pioneering sustainable financing with the first sustainability linked fixed rate note issuance in Asia (ex-Japan).
- Responding to the Task Force on Climate-related Financial Disclosures (TCFD), initiating a Climate Change Scenario Analysis to better understand, assess and act on climate- related risks.
- Achieving inclusion in FTSE4Good Index Series, reflecting strong Environmental, Social and Governance (ESG) credentials, which will further catalyse responsible investments.
- Olam’s sustainability insights platform AtSource winning 2020 Reuters Events Responsible Supply Chain Award.
Edited by Gaynor Selby
