Olam IPO: Everything you need to know about Olam
Oliver Brett September 15, 2021 9:27 AM
Olam partners with independent farmers across the world to help them bring natural and sustainable food ingredients to market. It has announced its intention to list its core operating group Olam Food Ingredients (OFI) via an initial public offering (IPO). Read on to discover why Olam wants to go public.
When will Olam go public?
Olam International Limited wants shares in OFI to be freely changing hands by the end of June 2022. It intends to seek a primary listing on the London Stock Exchange in the first half of the year. It will concurrently seek a listing in Singapore, where Olam International currently trades.
OFI was created in early 2020 following a re-organisation of the overarching Olam business to maximise the company’s long-term value. As part of that restructuring, a long-term plan to spin off OFI as a publicly traded entity was hatched.
How much is Olam worth?
Olam International itself is worth about $4.5 billion as of mid-September 2021. The London listing for OFI could raise about $2.8 billion, Reuters reported in August.
But in predicting how much OFI itself could be worth, it is revealing to read CEO and co-founder Sunny Verghese’s comments in an interview with Reuters.
In that, he said he expected OFI’s float “to be a substantial IPO… amongst the larger IPOs done on the LSE in the recent past. He also voiced his ambitions to see OFI named among the FTSE-100 index of blue-chip companies traded in the UK.
That would require a valuation in excess of £4 billion pounds ($5.54) which would also enable OFI obtain a premium listing. However, it would also need to have a free float of at least 25% and meet a tougher set of corporate governance requirements.
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What does Olam do?
OFI offers sustainable, natural, value-added food and beverage ingredients. Specialising in cocoa, coffee, nuts, spices and dairy, it has operations across America, Africa, Europe and Asia, with a network of 15,000 employees.
It sources these ingredients directly and indirectly from more than 2.5 million farmers and has created what it calls a “unique global value chain presence” which extends to running some of its own and manufacturing facilities.
It is also one of the world’s biggest agricultural commodity traders.
How does Olam make money?
Olam makes money by selling the food it sources or grows at profit to a range of clients. These customers number in the thousands, including business large and small - everything from big-brand multi-national organisations to small family-run businesses.
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What is Olam’s business strategy?
Olam wants to boost its valuation while stepping up growth and acquisitions. It made a decision in 2020 to focus on its two core businesses of OFI and Olam Global Agri (OGA) after the sale of sugar, rubber and other portfolios.
The OGA wing of the enterprise comprises grains, edible oils, rice and cotton – and could itself be listed as early as the fourth quarter of 2022.
OFI and OGA's competitors include privately-held Louis Dreyfus, Swiss-listed Barry Callebaut (BARN.S) and Archer-Daniels-Midland (ADM.N), some of whom have revamped their businesses amid stiff competition.
Winning OFI's listing would be a major boost for the LSE, which is trying to attract more global companies following Britain's exit from the European Union. [URL to
Is Olam profitable?
In August 2021, Olam reported it had more than doubled its first-half operational profit, excluding exceptional items, to a record $324.6 million.
These numbers came on the back of positive 2020 figures, showing it had weathered the coronavirus pandemic with great efficiency.
During the year, annual revenues across the company were up 8.6%, totalling $35.8 billion, including $12.5 for its food division.
Board of Directors of OlamThe following individuals are named on the Olam Board of Directors:
- Lim Ah Doo, Chairman and Non-Executive and Independent Director
- Sunny George Verghese, Co-Founder and Group CEO
- Nihal Vijaya Devadas Kaviratne, Independent Non-Executive Director
- Yap Chee Keong, Independent Non-Executive Director
- Marie Elaine Teo, Independent Non-Executive Director
- Shekhar, Executive Director and Group Chief Operating Officer, OFI
- Kazuo Ito, Non-Executive Director
- Dr Joerg Wolle, Independent Non-Executive Director
- Dr Ajai Puri, Independent Non-Executive Director
- Nagi Hamiyeh, Non-Executive Director
- Norio Saigusa, Non-Executive Director
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